Guggenheim Partners Nearing Deal to Buy Dick Clark Productions (Exclusive)
The diversified financial services firm has entered exclusive negotiations to acquire the storied producer of the Golden Globe Awards.
Guggenheim Partners has entered final negotiations to acquire Dick Clark Productions for an amount that exceeds its hefty asking price, multiple sources tell The Hollywood Reporter.
The deal for the storied production company behind the Golden Globe Awards, the American Music Awards and other TV programming is expected to close in the next week or two, according to sources familiar with the negotiations. After entertaining several offers, DCP owner Red Zone Capital is now negotiating exclusively with Guggenheim.
Two sources close to the negotiation tell THR that Guggenheim will pay about 10 percent more than DCP's owner initially was asking. Reuters reported Aug. 10 that Red Zone was seeking $350 million for the company, which would peg the winning bid at about $385 million, though the exact number could not be confirmed.
Reps for Guggenheim and DCP declined comment.
DCP, launched by the late Dick Clark in 1957, had drawn interest from as many as 17 entities, with the final bidders said to include CBS, CORE Media Group (the American Idol owner formerly known as CKx, with backing from Apollo Global Management), and Thomas H. Lee Partners, a private-equity firm based in Boston that partnered on a bid with Ryan Seacrest Productions and Bain Capital. The company was put on the market by Red Zone, which is controlled by Washington Redskins owner Daniel Snyder and run by CEO Mark Shapiro, about two months ago, after DCP was successful in the first round of a high-profile legal case that allowed it to retain the right to produce the Globes.
Guggenheim, a diversified financial services company based in Chicago and New York, is the primary financier behind the $2.15 billion purchase of the Los Angeles Dodgers that was announced earlier this year. The company manages more than $160 billion in assets and is a co-owner of Prometheus Global Media, owner of The Hollywood Reporter.
DCP produces a number of shows besides the high-rated Globes, which is broadcast on NBC, and the AMAs, which air on ABC. The company is behind the Miss Universe Pageant, Fox's So You Think You Can Dance, TV movies and specials including ABC's high-rated annual show, Dick Clark’s New Year's Rockin’ Eve With Ryan Seacrest. DCP also owns a hefty library of old TV shows, including game shows and the Bloopers franchise.
DCP's stewardship of the Globes was put in doubt by a lawsuit filed by the Hollywood Foreign Press Association accusing DCP of improperly negotiating a TV rights extension with NBC without telling the HFPA. But a Los Angeles judge ruled earlier this year that DCP's contract with the HFPA allowed it to continue with the show as long as NBC airs it. That ruling, which is being appealed by the HFPA, means that DCP will remain the show's producer for at least for the next year or two. If the appeal ultimately is unsuccessful, DCP has a deal to produce the show for NBC at least through 2018.
The sale is being handled by The Raine Group, a merchant bank founded in 2009 by Joseph Ravitch and Jeffrey Sine in partnership with the talent agency WME. A spokesperson for Raine on Wednesday declined comment on a possible deal.
Six Flags Entertainment, which Snyder and associates controlled at one time, is a minority investor in DCP (with a stake believed to be 40 percent of equity). The LA Times reported that Six Flags has pressured Red Zone to sell it to monetize the value of the investment. Red Zone bought DCP in 2007 for about $175 million from another investment group, which had acquired it from Clark a few years earlier. Clark had no interest in the company when he died in April.
Ryan Seacrest’s company was said to have been an early bidder for DCP with THL and Bain Capital but withdrew from the process. Other early bidders reportedly included Colony Capital, an investment firm that is an owner of Miramax Films.