Sillerman's trip from SFX to CKX
EmptyNEW YORK -- Like the properties and personalities it represents, CKX Inc. might too become a household name.
The company, led by chairman and CEO Robert F.X. Sillerman, sees considerable growth on the horizon. Shares of CKX have risen 10.6% this year, meaning the company's market capitalization stood at $1.2 billion as of Thursday night -- higher than that of, say, film studio Lionsgate.
Dialogue: CKX chief Sillerman
However, with no Wall Street analysts covering the stock right now, investors are on their own when it comes to predicting where the shares will go next. Last year, the stock dropped 9.8%. Sillerman, though, expects that analysts will pick up coverage this year and is confident about CKX's future.
"We are immensely proud of our operating results," he said, predicting that year-end 2006 financials will confirm, "as each of our quarters has confirmed, (that) we are growing this company quite significantly."
The industry legend, who grew up in the Bronx, was chairman and CEO of former radio station group SFX Broadcasting in the 1990s. After its sale, he built up live entertainment firm SFX Entertainment, which he sold to Clear Channel Communications in 2000 for $4.4 billion. (The firm is now part of recent Clear Channel spinoff Live Nation.)
CKX has come a long way, too. Called Sports Entertainment Enterprises Inc. in the late '80s, it operated a franchise retail golf equipment business and golf training facility, which it ended up selling. On Feb. 7, 2005, an investor group led by Sillerman acquired control of the company and simultaneously bought 85% of the entity that controls the name and likeness of Elvis Presley and related assets.
The firm then changed its name to CKX. According to the company's Web site, the "C" and "K" stand for "Content is King." The "X" stands for the "F.X." in Sillerman's name (he won't say what that stands for).
For the first nine months of 2006, CKX reported revenue of $177.8 million, up 72.3% from the year-ago period, and profit of $19.8 million, compared with $747,000 in the 2005 period. Operating expenses rose 48.2% to $144.9 million.
The company's 19 Entertainment division, with "American Idol," is its biggest revenue contributor, bringing in $134.9 million for the first three quarters of 2006. "Idol" led the charge with $66.9 million from TV production, sponsorship, merchandise and touring. Other "Idol" shows around the world had revenue of $5.3 million, and "So You Think You Can Dance" and other TV productions generated $34.8 million. The rest of 19 Entertainment revenue comes from recorded music and other business.
Mirroring the icons in which the firm has a stake, CKX's board is full of big names. Among its members are Simon Fuller, creator of "American Idol," manager of David Beckham and 19 Entertainment's CEO; actress Priscilla Presley; radio personality Bruce "Cousin Brucie" Morrow, who partnered with Sillerman in acquiring two radio stations in Upstate New York in the late '70s; former Warner Bros. executive Edward Bleier; and Jack Langer, former managing director and global co-head of the media group at Lehman Bros.
While CKX has been busy acquiring stakes in some of the biggest entertainment franchises around, the company expects more deals to come. "There are a few things that we are pretty intrigued by and that we are in active conversations (for)," Sillerman said.