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Buyer CKX/EPE Revealed

May 07, 2010 | Other

It's been kept completely secret -- until now. But I've learned that savvy media investor and entertainment programmer Allen Shapiro is the wizard behind the curtain of this One Equity Partners deal-in-the-making to purchase CKX. Sources tell me that the many weeks of day and night meetings to hammer out a deal have reached a crucial stage. But Shapiro's name hasn't yet been linked, and neither The New York Times nor Wall Street Journal even mentioned him in recent stories about the advanced deal talks. My info is that he's been involved for a long time. Of course, the last time Shapiro partnered with One Equity Partners, the global private equity investment arm of JPMorgan Chase, it was for their purchase of 49% of Lionsgate's TV Guide Channel and TVGuide.com.

The secrecy surrounding Shapiro's involvement in CKX may have to do with that TV Guide deal. He was initially buying TV Guide until Lionsgate swooped in at the last minute. Ultimately, Shapiro got a sizeable chunk of it almost a year ago. "But the fact is it's in no one's interest not to keep this new transaction secret," a source tells me.

As to why Shapiro is interested in CKX, my sources say it's primarily because of the company's high-profile American Idol and Elvis Presley and most of Muhammad Ali assets. Despite some beliefs that American Idol may suffer after judge Simon Cowell exits, and especially when his hit UK show X Factor starts competing in the U.S. market, I hear that Shapiro is convinced that Idol will continue strong through at least the 5 years left on its U.S. contract. "His opinion is that Idol is here to stay. It has 20 million viewers. Even its viewership goes down to 10 million viewers, it's still a huge hit," an insider tells me. Plus, Shapiro is becoming a heavy in the U.S. television syndication market through his recent TV Guide Channel deals for Ugly Betty, Curb Your Enthusiasm, and Weeds. Surely, American Idol will find its way there was well. (My information is that TV Guide Channel's 51% owner Lionsgate is not involved at all in the Shapiro-One Equity partners-CKX planned deal.)
Shapiro is always on the prowl for well-known brands that are poorly managed, and then getting in and out of deals once he's taken the undervalued assets and made them worth more. For instance, he facilitated the leveraged buyout of dick clark productions (dcp) and became CEO in 2004 before selling it in 2007. While at dcp, Shapiro served as Executive Producer of So You Think You Can Dance, The Golden Globes, American Music Awards, Academy of Country Music Awards, and New Years Rockin’ Eve. As president of Mosaic Media Group, he expanded Mosaic from an entertainment service business into an asset management company by investing in and controlling strategic media assets.

He arranged Mosaic’s acquisition of Hamstein Music (ZZ Top) and the Daksel & Seldak (Aerosmith) catalog to form Mosaic Music Publishing which he then sold in 2005. Prior to joining Mosaic, Shapiro served as President / CEO of The IndieProd Company, where he arranged the sale of the Company to Carolco Pictures.

As for the deal for CKX, it's already been reported recently that CKX chairman/CEO Robert F.X. Sillerman values the company at $558M, or roughly $6 a share. The share price climbed sharply after the WSJ broke the news of the negtoations with One Equity partners back in March. But that's way down from 2007's valuation of $1.3B.

Source:Elvis Information Network
Brian Quinn wrote on May 07, 2010
Interesting news. Also: Press Release, dated May 7, 2010, issued by CKX, Inc. NEW YORK, May 7, 2010 – CKx, Inc. (NASDAQ: CKXE) announced today that Robert F.X. Sillerman has resigned as Chairman and Chief Executive Officer of the Company and from the Company’s board, effective immediately. Mr. Sillerman cited as the reason for his resignation a desire to pursue other interests, including the possible acquisition of CKx as well as a desire to allow the Board to evaluate its strategic options should he pursue such an acquisition. Mr. Sillerman founded the Company and has served as its Chairman and Chief Executive Officer of the Company since its inception in 2005. Mr. Sillerman will continue as a consultant to the Company. Mr. Sillerman is also the Company’s largest shareholder. The board of directors of the company announced that director Edward Bleier was appointed as chairman of the board and that Michael G. Ferrel, a former director and president of the company, will serve as acting chief executive officer. “The board would like to thank Bob for his many contributions to CKx and for his leadership over the past five years and his unparalleled commitment to the company,” said CKx chairman Edward Bleier. “Bob has a long track record of building several successful enterprises and providing billions of dollars in return to investors. We’re thrilled that Bob will continue to assist CKx as a consultant.” Michael G. Ferrel, acting chief executive officer of CKx stated, “CKx has an excellent set of core assets that continue to be terrific performers for the company. I look forward to working with the board and management team to drive growth and to capitalize on the many opportunities ahead.” The company also stated that it presently intends to release its first quarter earnings on Monday, May 10, and plans to host an investor call following the release. Edward Bleier has served on the CKx board of directors since 2005. Mr. Bleier is a director of RealNetworks, Inc., a leading Internet creator of digital media services and software. For 34 years, until his retirement as Senior Advisor in December 2003, Mr. Bleier was an executive of Warner Bros., Inc. From 1986 through 2000, he was President of the division responsible for broadcast and cable networks, pay-television and video-on-demand. He also previously served on Warner Communications’ strategy committee, as President of Warner Bros. Animation, and overseeing the broadcast of certain sports properties. In May 2005, Mr. Bleier was appointed to the Board of Directors of Blockbuster, Inc. Mr. Bleier is currently a trustee of The Charles A. Dana Foundation, a member of the Advisory Board of Drakontas, Inc. and a member of the Council on Foreign Relations. Michael G. Ferrel served as President, director and Member of the Office of the Chairman of CKX from May 2005 through November 2008. From August 2000 through May 2005, Mr. Ferrel served as President and Chief Executive Officer of FXM, Inc., a private investment firm. Mr. Ferrel served as President, Chief Executive Officer, Member of the Office of the Chairman and a director of SFX Entertainment, the largest owner and operator of venues for live entertainment in the United States (now a subsidiary of Live Nation) from December 1997 through August 2000.