King loses kingdom to CKX
HOLLYWOOD — Elvis has left his own building.
Robert Sillerman, who created the SFX live music and radio empires, has acquired a majority interest in the assets comprising the Elvis Presley Estate, paying $100 million for 85% of the company.
Acquisition is the first for Sillerman’s new media and entertainment company, CKX, his first foray into entertainment since selling SFX.
CKX will conduct all business activities concerning EPE, Graceland and its tour operations and the Heartbreak Hotel across the street from Graceland. Deal includes all trademark rights to the name, likeness and image of Presley and all EPE-owned intellectual property, including photographs, archival documents and the King’s music publishing catalog.
Transaction is structured so that the title to Graceland and its 13.6 acre grounds in Memphis, along with most of Presley’s personal effects, remain with Lisa Marie Presley.
“We want to be partners with mainstream entertainment (entities),” Sillerman told Daily Variety, “and there’s no better place to start than with the King. We are interested in all aspects of entertainment, partnering with people to take away some risk and develop a new economic paradigm. The best way is to start at the top.”
No staffing or personnel changes are anticipated within the Presley Estate organization. Priscilla Presley remains as an executive consultant, Jack Soden continues as CEO and Gary Hovey remains exec VP and head of the Los Angeles office. All of EPE’s management team and staff will remain in place and Graceland tour operations will continue with business as usual.
“For the past few years, I’ve been looking for someone to join forces with to expand the many facets of EPE, to take it to new levels internationally and to make it an even greater force in the entertainment industry,” Lisa Marie Presley said in a statement. “It’s the ideal partnership in that I retain Graceland and my father’s personal effects, yet joining forces with Bob Sillerman will give us the opportunity to grow even further the intellectual and entertainment properties.”
The agreement will pay Lisa Marie $53 million in cash and absolve her of $25 million in debts owed by the estate. She is also to get shares in the new company expected to be worth more than $20 million.
Deal is contingent on a three-year audit of the combined operations of the Presley entities. The Elvis businesses had total revenue of $37.9 million for the nine months ended Sept. 30 and $44.9 million in 2003.
Next year will see the celebration of the 70th anniversary of the singer’s birth and the Broadway opening of the Elvis tuner “All Shook Up.”
Simultaneously, Sillerman expects to acquire approximately 94% of Sports Entertainment Enterprises, an inactive publicly traded company, through which the business of CKX will be conducted. The transaction is subject to certain closing conditions, and should it be completed, Sillerman plans to seek shareholder approval to change the name of SPEA to CKX. He also plans to trade the company’s stock publicly.
CKX expects to partner with content creators and then with studios, producers and labels. Although Sillerman said music would be a smaller part of the business, he used a recording artist as an example.
A music model
“The proper methodology (for a recording artist) should be the selling of music, not just records. We reduce risk for record companies (by funding projects) that allow the artist to negotiate better deals. I believe creators will be the most receptive to this idea, but anytime you suggest change there is resistance. We need to make the model work.”
Sillerman was the founder, a major shareholder and executive chairman of SFX Entertainment from its inception in 1997 until its sale to Clear Channel Communications in August 2000. SFX Entertainment was the largest presenter, promoter and producer of live events in the world. Previously, Sillerman ran SFX Broadcasting from its inception in 1992 through its sale in 1998 to an affiliate of buyout firm Hicks, Muse, Tate & Furst.
The Elvis Presley Estate, created in 1980, includes worldwide licensing of Elvis-related products and ventures, including music, film, video, television and stage productions.