JPMorgan Chase Usher in Buyout of American Idol
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Buyout negotiations confirmed for CKX entertainment company.
Entertainment company CKX Inc confirmed rumours of a potential buyout yesterday as the company looks to cash in on its successful American Idol franchise before diminishing returns render it worthless.
CKX bought 19 Entertainment from American Idol creator Simon Fuller in March 2005 in a deal worth $209.4 million (£138.7 million). 19 Entertainment continues to be the most lucrative arm of CKX off the back of shows such as American Idol and So You Think You Can Dance.
Shares in CKX have rocketed in the last few days on the NASDAQ after rumours began of a possible buyout from One Equity Partners, the private investment fund of JPMorgan Chase. Shares jumped from $5.4 per share to $6.2 in the space of a few hours yesterday amid the buzz of a takeover bid, giving the company a market capitalisation of $576 million (£381 million) at its peak share price.
It seems in CKX’s benefit to strike whilst the iron is hot. Now in its ninth season, American Idol is still drawing in audiences like no other show in US television, but CKX must be worried about the future of the show. Numbers are decreasing steadily since Idol’s peak a few seasons ago, and the rock at the centre of its success, Simon Cowell confirmed that this would be his last season on American Idol before he pursues new ventures.
The show only just handled the exit of judge Paula Abdul, but Cowell’s leaving could easily destroy American Idol, despite protestations from Fox chairman Peter Rice that: “Our expectation is that American Idol will run for many, many, many, many, many more seasons,” quoted The New York Times.
If CKX can get even a half decent deal from One Equity Partners, they should grab the money and run for the hills.
