Ryan Seacrest’s $45 Million Salary Sends 'American Idol' Costs Soaring
But the company, which bought "Idol" producer 19 Entertainment in 2005, reports a 20% drop in revenue.
American Idol and So You Think You Can Dance are bringing in the cash for CKX. Elvis Presley and Muhammad Ali? Not so much.
CKX reported Monday that its revenue in the first quarter dropped 20% to $53 million, but operating income rose to $9 million compared with a $3 million loss a year ago.
The reversal of fortune on the operating-income line is credited to 19 Entertainment, the business CKX bought from Simon Fuller for $200 million in 2005.
19 Entertainment went through a restructuring, shedding unprofitable businesses, and a partnership with Sony Music Entertainment came to an end.
As a result, 19 Entertainment took in 20% less revenue to $43 million in the quarter, but its operating income soared 385% to $14 million.
American Idol as a standalone business posted operating income of $13.6 million – same as CKX overall – though that represents a 17 percent fall for the hit TV show.
The lower operating income is presumably due to host Ryan Seacrest’s rising salary, as costs for the show jumped 17 percent, mirroring the decline in operating income.
According to a regulatory filing Monday, CKX is on the hook for $30 million of Seacrest’s $45 million compensation package that runs three seasons and expires in December 2012.
19 Entertainment’s American Idol show is in its 10th season, and the eighth season of So You Think You Can Dance begins May 26.
CKX also owns rights to the names, images and likenesses of Ali and Presley as well as to the operations of Graceland.
The Presley business showed a 22% drop in revenue to $10 million and an operating loss of $400,000 compared with a loss of $1.2 million last year. CKX blamed the falling revenue on the closing of the Elvis in Concert series in Europe.
The Ali business showed unchanged revenue of $900,000 and operating income that dropped 34% to $300,000.