In a deal that marries “Idol” with Elvis, Robert Sillerman acquired the company behind “American Idol,” joining it with Elvis Presley Enterprises, which he acquired late last year.
Sillerman, who sold SFX Entertainment to Clear Channel for $4.4 billion in 2000, will pay about $200 million in cash and stock in his holding company CKX for 19 Entertainment, which created the “American Idol” franchise.
Reality TV impresario and “Idol” creator Simon Fuller will become a director of the company and will play a “key role” in its overall direction.
Fuller’s 19 Entertainment owns the “Pop Idol” format, which generates $1 billion in annual sales in 21 countries from sponsorships, merchandising, telephone voting, music sales and advertising.
“For me, ‘Idol’ pays for the acquisition,” Sillerman told Daily Variety. “The upside is the relationship with Simon; his vision of what’s happening in the world of entertainment is why this deal came about.”
Sillerman bought a controlling 85% stake in the Elvis empire for $100 million in December, separating Graceland and the King’s recordings from the Presley family. The deal was Sillerman’s first major venture since his failed bid to acquire the Firm in 2000, shortly after the sale of SFX to Clear Channel.
“American Idol,” in its third season, is Fox Broadcasting’s most popular — and profitable — show.
New distrib model
Sillerman’s vision for the company is to take entertainment properties — such as film, TV and music — and apply new business models that he believes will be more lucrative to the artists than the traditional studio or label system.
Sillerman said the company will “help creators of the best possible content distribute that content on a platform that gives them a fair economic split,” adding, “they’re not getting that now.”
“Idol,” he said, “suffers from old distribution economics; as successful as it is, the vast majority of revenue goes to Fox.”
Fuller, who created and managed the Spice Girls, has proven himself adept at creating vast entertainment properties out of artists. His company manages former “Idol” participants Kelly Clarkson, Ruben Studdard, Clay Aiken and Fantasia. Fuller has an exclusive deal to manage soccer star David Beckham and wife and former Spice Girl, Victoria Beckham.
As for the Elvist estate, which includes warehouses of Elvis artifacts and memorabilia, Sillerman is planning Graceland-themed destinations for Europe and Las Vegas.
Shares in CKX, which operates under the name Sports Entertainment Enterprises, rose 58% closing at $26.73 on the Nasdaq.