'American Idol' renewal talks continue
CKX CFO: Fox walking would be 'economic suicide'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.
Seacrest last summer struck a three-year network TV rights deal with CKX, under which CKX pays him about $15 million a year, while Fox is expected to pay CKX $5 million for his services.
Under a renewal deal, CKX could have "more significant upside opportunity" here, Benson said Tuesday without providing details.
The "Idol" producer, meanwhile, also "continues to work on a replacement strategy for Simon Cowell," the CFO told analysts.
CKX announced Friday that former chairman and CEO Robert Sillerman has resigned as he has expressed interest in a bid to take the company private. As the largest shareholder, Sillerman owns 21% of the company.
Talks with Sillerman could start in. the coming days. CKX has in recent weeks held sales talks with an unnamed suitor and continues those, according to Benson. That suitor is believed to be JP Morgan Chase private equity arm One Equity Partners, which is also understood to have talked to Sillerman about a joint bid.
Benson also said Tuesday that a restructuring of 19 Entertainment to cut costs and focus it on its marquee shows is expected to be completed by mid-year with annual savings of $15 million starting to kick in with the third quarter.
Commenting on this season's "Idol" ratings, he said the show has retained most of its audience aged 18-49, while adding more programming hours. And he lauded a bigger gap among viewers 18-34 between "Idol" and the no. 2-rated show in the demo.