NEW YORK — CKX Inc. expects to successfully conclude long-running talks with Fox about a renewal of “American Idol” in the coming months, CKX CFO Thomas Benson said Tuesday
“We would all be stunned if Fox walked away, ” he said on CKX’s quarterly earnings conference call when asked about that possible scenario. “That would be an economic suicide.”
He added that talks with other networks could and would only start if the Fox negotiations failed for some reason.
But Benson said several times that he expects CKX, which owns “Idol” producer 19 Entertainment, to reach a multi-year Fox deal, even though he declined from predicting when exactly an agreement would be finalized given that previous forecasts proved wrong.
Agreements on key deal terms with Fox were reached late last year, but the pending departure of Simon Cowell and the pay structure for host Ryan Seacrest seem to have been issues holding up a final deal.
Benson said Tuesday that CKX is looking for similar economics in an “Idol” renewal.
Ryan Seacrest’s 3 year network TV rights deal with CKX, has CKX paying him about $15 million a year, while Fox is expected to pay CKx $5 million. Under a renewal deal, CKX could have “more significant upside opportunity.” No more detail on that point from CKX. Also, the company “continues to work on a replacement strategy for Simon Cowell.”
Former CEO and chairman, Robert Sillerman, who resigned on Friday is interested in taking the company private. He’s the largest shareholder, owning 21% of the company.
Talks with Sillerman could start soon. CKX recently held talks with an unnamed interested party rumored to be JP Morgan Chase private equity arm One Equity Partners. Apparently, they’ve talked to Sillerman about a joint bid.
In the meantime, CKx has reported that first quarter 2010 revenue declined $14.9 million, or 18.3%, to $66.6 million as compared to the prior year period.
Hm. I wonder why Ryan’s deal is holding up the negotiations? It’ll be interesting to see how the deal finally pans out.