The chief executive of the parent company of "American Idol," the top-rated show on television, resigned on Friday and said he was weighing a bid for the entertainment and licensing firm.
Robert F.X. Sillerman's departure could trigger a bidding war for CKX Inc., which said last month that it was considering a sale of the company. Veteran media investor Allen Shapiro, who is also chairman of TV Guide Network, is working on a potential bid with JPMorgan Chase & Co.'s private-equity arm, One Equity Partners, according to people close to the situation.
CKX said Michael Ferrel, a former president of the firm, will serve as acting CEO, and Ed Bleier, a former Warner Bros. executive and CKX board member, will become chairman of the board. Sillerman owns 20% of CKX, which he founded in 2005, and is the company's largest shareholder.
It's been a roller-coaster year for CKX. In January, "American Idol" creator Simon Fuller resigned as chief executive of 19 Entertainment to start his own production company after bumping up against Sillerman. Fuller, who sold 19 Entertainment to Sillerman for $200 million in 2005, signed a lucrative consulting agreement with CKX.
Besides 19 Entertainment, which produces "American Idol" and "So You Think You Can Dance" for Fox, CKX has a management business and counts soccer star David Beckham and musicians Carrie Underwood and Adam Lambert as clients. The New York-based company also has a majority stake in Elvis Presley's Graceland mansion and an 80% interest in licensing rights to the name and image of Muhammad Ali.
It remains to be seen if other potential bidders for CKX emerge beyond Shapiro and Sillerman. Although News Corp. would be a logical candidate because CKX produces two of the biggest hits on News Corp.'s Fox network, people close to the media conglomerate said it has no interest.
Dan Snyder, the owner of Dick Clark Productions and the Washington Redskins, and who has expressed interest in the live entertainment business, also took a quick look at CKX and passed, a knowledgeable person said
In 2009, CKX had net income of $22.8 million on revenue of $328 million. The bulk of revenue for the company is generated by 19 Entertainment.
One of the challenges for a buyer is determining the value of CKX because so much of the company is wrapped up in brands and the performance of a single aging TV show. Although "American Idol" is still strong, its ratings have been in a steady decline over the last few years. This is also the last season that Simon Cowell will be the main judge because he is starting his own show, "The X-Factor."
Another issue for any buyer is untangling the web of partnerships that CKX has with its "American Idol" partners Freemantle Media and Fox.