It's just weeks away -- a potentially big change for the television show that transfixes America. But how many people would watch it if the show's superstar decided to take a hike? That's not just a troubling question for viewers of the show but for investors in the stock of the company that licenses it around the world. What show am I talking about? American Idol. Which star is thinking of leaving? Wait for it -- Simon Cowell. And what stock could take a beating if he leaves? CKX Inc (NASDAQ: CKXE).
Simon Cowell is thinking of leaving American Idol. According to MSNBC, Simon said "I'll make a decision about (whether to stay with the show) next year." Why would Simon leave? He claims it's not personality conflicts but the workload and his belief that the show could keep those demands going "for another 10 years." But if Simon leaves, would the show be as popular? Could the producers find someone else to be the harsh voice of reality?
That's an important question for investors in CKX. Way back in June 2007, CKX accepted a bid to go private in a $1.3 billion LBO led by its founder Robert Sillerman. But on November 4. 2008, that deal fell apart due to tightening credit conditions. This put Sillerman's 19X, which was leading the buyout, on the hook for a $37.5 million termination fee, which it said it would pay for with about 3.3 million shares of CKX common stock then valued at $11.08 per share and $500,000 in cash. The company said it will pay the fee in full within 30 days of the deal's termination date.
Since CKX was trading at $4.39, it's not clear to me why 19X said it had shares worth $11.08. And if Simon Cowell leaves the show, those shares will be worth a lot less.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
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Reader Comments (Page 1 of 2)
12-20-2008 @ 11:52AM
Pinky said...
I think it will be a huge mistake if Simon leaves. The show will not be the same. Simon is the show and his input is the deciding factor of who stays and who goes. He usually is correct.
12-20-2008 @ 12:06PM
watdafuk said...
Hope it goes in the toilet just like the careers of most of the winners.Crap is sickening already and it has not even started yet.
12-20-2008 @ 1:09PM
Don Orban said...
Wow, who cares? This show can go down the drain without a clog.. I personally will not miss an episode.
12-20-2008 @ 1:27PM
donald said...
pinky said it all: Simon is the show!! if he goes; the show goes !
12-20-2008 @ 3:01PM
Dave said...
I agree with Dan Orban, the show can go down the drain and I won't miss it at all. If Simon and the rest of his crew go away we might have some quality programming to watch instead of some jerk with an attitude problem and some drunken broad who is a few years over the hill giving their opinions on the quality of some lousy singers ability to entertain the world.
12-20-2008 @ 3:03PM
L said...
hahahha, f** AI. I was on the show and made it to Hollywood. Then got cut when it was down to 90 back in 2005. Then this year, I tried out again and the producers were evil to me n said some harsh things. so for all I care AI can go to hell. The show will eventually die and I would be damn happy if Simon left for good.
12-20-2008 @ 3:13PM
Bill said...
The show needs Simon. He has actually been too nice the last couple of seasons. I only watch the first few shows when all the IDIOTS are on.He is helping these IDIOTS when he tells them how CRAPPY they are. Someone should have told them along time ago. It's for their own good. I can't believe how some of them think they are good.
12-20-2008 @ 3:21PM
Alry said...
Simon is the reason I won't watch the show. I can't stand him. He is a corn ball.
12-20-2008 @ 3:58PM
Gerald Kauffman said...
Don't care if it survives or not. it's a dumb show!
12-20-2008 @ 3:58PM
Grammy said...
Simon makes the show. I won't watch without Simon and I've watched every season. Paula or Randy could leave. I think AI does need to get rid of some of the idiots that they let on in the beginning. There is enough real talent out there to make it a even better competition.
12-20-2008 @ 4:36PM
Kim said...
I wouldn't watch it anymore if Simon left. Paula can take a hike, though!
12-20-2008 @ 6:43PM
Devon Gooden said...
American idol is Simon. He is the only one who knows music and good singing. Without him what is there to watch?
12-20-2008 @ 6:56PM
david said...
I do not watch or will ever watch .
12-20-2008 @ 7:45PM
VINNY said...
I FOR ONE CANNOT STAND THAT LIMEY ALL HE DOES IS DEGRADE PEOPLE AND COMES OFF LIKE A VERY ARROGANT AND IGNORANT FOOL WHO THINKS HE IS BETTER THEN ALL !!!
12-20-2008 @ 8:56PM
Jeremy said...
They should have taken that show off the air after Carrie Underwood won. after that season, nobody who has won has made it big
12-20-2008 @ 9:08PM
Steve said...
Its amazing to see all those AI "rejects" who now want the show to fail. Of course .... they FLOCKED by the 100,000's to audition. Soon as it becomes evident they have ZERO talent (and Simon is usually the one to point this out) they hate the show. Simon is Right most of the time (95%) but the show would survive without him.
12-20-2008 @ 10:41PM
Barnsinger said...
Without Simon, there is no American Idol. A plane can't fly without an engine, and Idol can't fly without Simon. I hope he really isn't thinking about leaving.
12-20-2008 @ 11:25PM
jocelyne stichberry said...
I LIKE SIMON , HE IS THE JUDGE THAT CAN BE HONEST , DIRECT AND RIGHT.
KEEP SIMON , THROW PAULA ABDUL .
12-21-2008 @ 12:36AM
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12-21-2008 @ 1:25AM
SHANE said...
The show is beyond tired. All the faux best friends after 1 week and hugging and crying when someone gets voted off is disgusting. I hope it will just go away like most of the "winners" of the show seem to do.