A magic number
19 Entertainment's worldwide success is a whole song-and-dance routineIf media moguls had to be screened by the judges of Fox's "American Idol," Simon Fuller wouldn't make it past the first stage.
"Too dull. He's essentially nothing better than a karaoke performer," Simon Cowell would intone.
"He's a little pitchy," Randy Jackson would offer.
Paula Abdul would just giggle.
Indeed, Fuller, the 46-year-old CEO of 19 Entertainment and the man behind the "Idol" franchise (which is known as "Pop Idol" in other parts of the world), doesn't fit the central casting description of the job. He's never ballooned around the world. He doesn't have a discernible political agenda.
In truth, Fuller, who is as central to the 150-person 19 as Donald Trump is to the Trump Organization, is known more for his accomplishments than his personality. "I want to be judged by what I do rather than what I say," Fuller explains. "I was a music manager, and it's always been all about the artist. It's in my genes not to say much."
That ethic has served 19 well. Think of any major British act that's crossed over in the past couple of decades, and it's likely Fuller and his 21-year-old firm is behind it, including the Spice Girls.
Fuller conceived of "Idol" in 1998 as a mechanism to find new artists, expose them and then promote them, all on television. The franchise has reaped untold millions. Fuller himself says he doesn't know its true value. "It's probably impossible to gauge it," he says, rattling off all the ways in which "Idol's" ratings help Fox promote shows like "House," and how sponsors Coca-Cola, Ford and Cingular (now AT&T) all benefit from "Idol." "You can really go on and on," Fuller says.
The value of 19 is a little easier to gauge. CKX, the entertainment firm owned by billionaire Robert Sillerman, bought 19 in March 2005 for about $190 million. From that time until Sept. 30, 2006, the last time CKX reported financial results, 19 has taken in about $205.5 million. The unit makes most of its money from "Idol's" TV production (from licensing fees) as well as foreign syndication, sponsorship, merchandise and touring. But 19's latest venture, "So You Think You Can Dance," also on Fox, has proved to be a hit, and 19 derives additional income from albums from "Idol" graduates such as Kelly Clarkson and Ruben Studdard.
Although 19 has an exclusive joint venture with Brit soccer phenom David Beckham and also has launched fashion lines with Claudia Schiffer and Victoria Beckham, those who are bearish on the unit's prospects say it is too dependent on "Idol," which, for all its ratings and pop-culture glory, might be just a fad. Indeed, in late February, the stock price for CKX, which also holds 85% of the rights to the name, image and likeness of Elvis Presley and 80% of such rights for Muhammad Ali, was down about 50% from its high in mid-2005.
Mark Argento, an equity research analyst with Craig-Hallum Capital in Minneapolis, says the falloff in stock price probably had nothing to do with 19 and was more an issue of a lack of visibility among Wall Street analysts. "It's an eclectic business model," Argento says of CKX. "You really have to sit down and explain it, and management hasn't spent a lot of time talking to the Street."
Argento says it's likely that "Idol's" ratings will eventually fall off, but if Fox is selling $500 million in advertising every season against "Idol," such degradation wouldn't really hurt. "If it's only at 70%, it's still $400 million, which is still huge."
Fuller sees any ratings fluctuations as irrelevant: "I would like to think now that it's at the status of the Super Bowl or the Oscars, where ratings vary from year to year depending on who's nominated or who's playing, but it's always a big event."
And Fuller's not content to let 19 be known as a one-trick pony. The company has several projects in the works, including an American translation of the British comedy series "Little Britain" on HBO and a sitcom starring Victoria Beckham on NBC. Plus, there's "Dance." While 19 U.S. president Iain Pirie acknowledges that though a show about dancing is not going to spawn any recording contracts, "Dance" tours have been very lucrative so far.
Time will tell if Fuller ever tops "Idol," but those who know him well have a cultish faith in his judgment. To them, Fuller is still at heart the A&R man with the golden ear that he was in the early 1980s for Chrysalis Records. (19 is named after the 1986 hit song by one of Fuller's discoveries, Paul Hardcastle.)
After all, Fuller did create the entertainment industry's equivalent of Google -- a search engine for talent.
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