vivaelvis
05-09-2010, 11:03 AM
There seems to be alot of misconceptions, confusion, and assuming going on in the world of Elvis concerning the latest news on Robert FX Sillerman's resignation as CEO from CKX. Here's the reasons behind his decision. Back in 2005 when Sillerman took over as CEO of CKX he began to build on that small company by adding investments of interests such as EPE, Graceland operations, the Mohammed Ali estate, the hit tv show American idol, and then music division 19 Entertainment. He assumed that adding those entertainment investments would benefit the comapny's longevity and the value would bring outside interests in selling it to take it private. Unfortunately the stock never reached as high as they thought and even with Elvis, Ali and Idol it wasn't attractive enough as they had previously envisioned to sell it and because of that no interest came a calling. Then came the perfect economical storm, if you're a fortune 500 investor as Sillerman is. Once banks shut it's doors on those companies it forced a dominos effect that wiped out business after business on wall street and forced some into forclosure. The banks not loaning money is what killed the dream Elvis resort in Las Vegas. Delayed the grand plans for Graceland, and caused a royal style resort in the Carribeans to come to a hault during construstion in which Sillerman lost $180 million of his own money out of his own pocket and won't get it back. Now that resort, hotel and golf course lies unfinished and may never be.
One of Sillerman's biggest investments was 'American Idol'. But in the past 3 seasons it's ratings and populairty has slowly decreased despite topping all tv ratings for the nights it runs. But If 'Idol' doesn't start finding real talent soon like they have from Season 1 through 5 then they won't survive till their contract with Fox runs out in 2015. This past week saw idol's rating drop due to lack of interest in the final remaining contestants. The biggest week was Elvis Week with over 39 million votes registered. From what's been said, it appears that Robert Sillerman sees this and wants to part ways with 'Idol' and possibly '19 Entertainment' to save CKX from falling under the $4.00 a share mark that would cause default. His plan has been adn still is to take the company private. Quite possibly now as just an estate company only. He already has Elvis and Ali and has gone on record to say that he would like to add The Beatles, Marilyn Monroe, James Dean and a few other dead celebrities that have longevity and can be marketed. But the owner of Dean and Monroe and have said, not interested. The Beatles catalog is in the hands of the Jackson estate and McCartney is trying like crazy to get it back.
If Sillerman is able to buy and take over CKX it'll only benefit what he plans to do with Graceland. Him stepping down only makes that option more possible. He had to do that in order to make a bid for CKX. 'One Equity Partners', the company that's interested in buying CKX, is still in negotiations and a deal isn't far from being reached, according to insiders close to the situation. Apparently Sillerman sees that deal unbeneficial to the company and his own personal investments and is the sole reason for him resigning to make a bid of his own. That and the fact that the longer this sale drags out the more danger of CKX falling more in stock value and fear of the company going under, which means worst case scenario, banruptcy and loss of power over Graceland. That's the main purpose for him to take it private.
Some have labeled Robert FX Sillerman as a man out to make a buck and no real love for Elvis. Well, that's partly true and mostly false. Sillerman has been an avid Elvis fan for many years and unlike most of us witnessed Elvis on stage, at Madison Square Garden at that, which was one of the most historical moments in Elvis' career. He didn't go into this deal thinking of selling EPE within a 10 year's time. He signed a 99-year lease to have sole rights to the name, likenss and image of Elvis Presley. Besides the financial side, it was and still is his largest private investment that he's ever made with a company. He paid $115 million for EPE and no way will he let that go without a fight. He's not giving up and getting out while he can. He's a smart experienced businessman that knows exactly what he's doing. I'm willing to bet that he had this already mapped out long before he recently visited Memphis and told the city that Graceland will be "spectacular". Only a inexpereinced business person would do the opposite. Sillerman's been in the game long enough to know how to handle these situations.
Another thing to take note of is the fact that OEP wants to buy the company at a very cheap market price of $460 million while Sillerman can jack the value up by offering more, say $500-600 million which in return makes the company more valuable and stable in the long run. Especially once he sells off short term success like 'Idol'. It's been said that as of now, 'Idol' is worth more than a billion dollars alone! But that value could drop at any time and any day and he would lose more than he'd gain. If Robert Sillerman can take it private it'll mean quicker swift actions on the Graceland plans as they won't have to wait for a third party to get involved on the investment side. Right now, investors are fearful of either Graceland or Elvis not withstanding another decade of overwhelming popularity or the economy not being stable enough. I would assume that they're fear is the latter.
Lastly, this resignation wasn't a surprise to the staff at CKX. Sillerman's contract as CEO was to expire in February 2011 anyway. So it was just a matter of time before he either renewed or resigned, as is what he chose as a business move. Nothing more or less.
One of Sillerman's biggest investments was 'American Idol'. But in the past 3 seasons it's ratings and populairty has slowly decreased despite topping all tv ratings for the nights it runs. But If 'Idol' doesn't start finding real talent soon like they have from Season 1 through 5 then they won't survive till their contract with Fox runs out in 2015. This past week saw idol's rating drop due to lack of interest in the final remaining contestants. The biggest week was Elvis Week with over 39 million votes registered. From what's been said, it appears that Robert Sillerman sees this and wants to part ways with 'Idol' and possibly '19 Entertainment' to save CKX from falling under the $4.00 a share mark that would cause default. His plan has been adn still is to take the company private. Quite possibly now as just an estate company only. He already has Elvis and Ali and has gone on record to say that he would like to add The Beatles, Marilyn Monroe, James Dean and a few other dead celebrities that have longevity and can be marketed. But the owner of Dean and Monroe and have said, not interested. The Beatles catalog is in the hands of the Jackson estate and McCartney is trying like crazy to get it back.
If Sillerman is able to buy and take over CKX it'll only benefit what he plans to do with Graceland. Him stepping down only makes that option more possible. He had to do that in order to make a bid for CKX. 'One Equity Partners', the company that's interested in buying CKX, is still in negotiations and a deal isn't far from being reached, according to insiders close to the situation. Apparently Sillerman sees that deal unbeneficial to the company and his own personal investments and is the sole reason for him resigning to make a bid of his own. That and the fact that the longer this sale drags out the more danger of CKX falling more in stock value and fear of the company going under, which means worst case scenario, banruptcy and loss of power over Graceland. That's the main purpose for him to take it private.
Some have labeled Robert FX Sillerman as a man out to make a buck and no real love for Elvis. Well, that's partly true and mostly false. Sillerman has been an avid Elvis fan for many years and unlike most of us witnessed Elvis on stage, at Madison Square Garden at that, which was one of the most historical moments in Elvis' career. He didn't go into this deal thinking of selling EPE within a 10 year's time. He signed a 99-year lease to have sole rights to the name, likenss and image of Elvis Presley. Besides the financial side, it was and still is his largest private investment that he's ever made with a company. He paid $115 million for EPE and no way will he let that go without a fight. He's not giving up and getting out while he can. He's a smart experienced businessman that knows exactly what he's doing. I'm willing to bet that he had this already mapped out long before he recently visited Memphis and told the city that Graceland will be "spectacular". Only a inexpereinced business person would do the opposite. Sillerman's been in the game long enough to know how to handle these situations.
Another thing to take note of is the fact that OEP wants to buy the company at a very cheap market price of $460 million while Sillerman can jack the value up by offering more, say $500-600 million which in return makes the company more valuable and stable in the long run. Especially once he sells off short term success like 'Idol'. It's been said that as of now, 'Idol' is worth more than a billion dollars alone! But that value could drop at any time and any day and he would lose more than he'd gain. If Robert Sillerman can take it private it'll mean quicker swift actions on the Graceland plans as they won't have to wait for a third party to get involved on the investment side. Right now, investors are fearful of either Graceland or Elvis not withstanding another decade of overwhelming popularity or the economy not being stable enough. I would assume that they're fear is the latter.
Lastly, this resignation wasn't a surprise to the staff at CKX. Sillerman's contract as CEO was to expire in February 2011 anyway. So it was just a matter of time before he either renewed or resigned, as is what he chose as a business move. Nothing more or less.