Music industry titan Irving Azoff has decided to back Allen Shapiro's fight to buy "American Idol" franchise owner CKX Inc. Azoff, while not putting up any money immediately, is ready to pony up as much as $200 million for a minority stake in the company -- between 25 percent and 33 percent -- should the Shapiro-fronted bid prevail, sources said.
Shapiro's bid is backed by JPMorgan Chase's private-equity arm, One Equity Partners. The group has bid $550 million to $560 million. It is battling a group headed by Simon Fuller, who helped expand the "American Idol" franchise in its early years and later sold his company, 19 Entertainment, to CKX in 2005 for $300 million.
Fuller, who created the Spice Girls and is still an advisor to CKX, has made a $600 million bid, according to reports. Both Fuller and Shapiro are in the hunt for the publicly listed company, which is valued at around $460 million. In addition to Idol, CKX owns rights to Elvis Presley and Muhammad Ali.
Azoff wants a "deal for exploiting the management of the [American Idol] acts and the tour," said a source familiar with the situation. The 62-year-old executive chairman of Live Nation, which is promoting the Glee tour, feels he could be valuable in helping to market future Idol tours, the source said. A representative for Azoff had no comment. Shapiro and Greg O'Hara, who runs One Equity Partners, have been in New York this week for meetings with CKX to outline their offer, which would involve Shapiro moving in as CEO of CKX, sources said.
Shapiro also runs the TV Guide channel and helped facilitate a leveraged buyout of Dick Clark Productions.
Fuller is in partnership with former Barclays Capital executive Roger Jenkins. One wrinkle in the proceedings is former CKX CEO Robert Sillerman -- who exited the company unexpectedly a few weeks ago. Some say Shapiro had a hand in forcing out Sillerman -- who had been working with One Equity Partners in its bid.
Sillerman, 60, described as a "wounded bear," has a 20 percent stake in CKX. He was replaced by CEO Michael Ferrel. Both bidders would also have to convince other CKX shareholders, including Presley family members, of the benefits of their bid. A spokesman for CKX had no comment.
Another source close to proceedings said he would bet on a Shapiro win. "They don't have all the sturm and drang that the others have," said this financial executive. The strength of the bids imply that the Fox hit "American Idol" still has plenty of life left even as the latest finale ratings were down compared to previous years, and key judge Simon Cowell is leaving. Cowell's departure has prompted a torrent of speculation about who might replace him. Bret Michaels, the rock singer and the winner of "Celebrity Apprentice 3," is among names that have surfaced in the press.
Idol remains the top-rated show on TV helping Fox to win its sixth-straight season in the key advertiser demo of 18-49 year olds. This year's finale was watched by 24.2 million viewers.