19, Cowell, BMG, Sony and so on
May 29, 2011 16:10:28 GMT -5
Post by Q3 on May 29, 2011 16:10:28 GMT -5
19, Cowell, BMG, Sony and all the complex relationships.
Note: There is a limited amount of public information about these relationships. 19 Entertainment was a privately held company until it was acquired by a publicly traded company, CKX, in March 18, 2005. On May 10, 2011, CKX was acquired by Apollo Global and will be taken private.
Description of Idol Business from CKX Annual Report March 2006:
Ronagold Limited -- referenced above is
The 2010 CKX Annual Report contained the following explanation of the recording contracts (this is Adam's contract year):
Idol Recording Contracts Source is press reports and executive statements until 2005.
AI Season 1 though Season 4: Idols were signed to Simon Cowell's SYCO records within Sony BMG.
AI Season 5: Simon gave up his signing rights to Season 5 as part of a three-season contract extension he signed before 2003's American Idol 3.
AI Season 6 through Season 9: Simon's 2005 contract extension included
2005 new Sony, FOX and Freemantle contracts:
Fox committed to building and hosting a dedicated AmericanIdol.com website, with the network and Idol producers taking two-thirds of any Internet-generated Idol revenue beyond a $5 million base threshold in 2006, $7 million in 2007 and increasing thereafter, according to an SEC filing. [Editor’s Note: Of course, we still recommend you get your ‘Idol’ news right here at RealityNewsOnline and at our sister site, Foxes On Idol.]
Fox also has the right to pursue further exposure for the show via wireless media through ringtones, video clips, and related services, with 19 and Fremantle taking 50% of telephony revenue above a base $3 million in 2006, $4.5 million in 2007 and increasing thereafter, according to the SEC filing.
Sony extended agreement with 19 and agreed to give 19 a higher share of royalties.
19 Entertainment News
March 18, 2005: American Idol™ Joins Elvis at CKX, Inc.
Robert F.X. Sillerman's CKX Acquires 19 Entertainment, Creator of American Idol, and Partners with Founder, Simon Fuller
NEW YORK -- March 18, 2005 -- Sports Entertainment Enterprises, Inc. d/b/a CKX, Inc., the control of which was recently acquired by Robert F. X. Sillerman, announced today that it has acquired 19 Entertainment Limited, the United Kingdom-based company best known for creating the American Idol™ television program. In addition, CKX has entered into a long-term agreement with Simon Fuller, the founder and the creative force behind 19's most successful projects.
Link: ir.ckx.com/releasedetail.cfm?ReleaseID=163014
May 10, 2011 - CKX (19 Entertainment's parent company will be taken private) American Idol company bought for $509m by Apollo Global Management
Link: www.guardian.co.uk/media/2011/may/10/apollo-global-management-buys-ckx
Note: There is a limited amount of public information about these relationships. 19 Entertainment was a privately held company until it was acquired by a publicly traded company, CKX, in March 18, 2005. On May 10, 2011, CKX was acquired by Apollo Global and will be taken private.
Description of Idol Business from CKX Annual Report March 2006:
On March 17, 2005, we acquired 19 Entertainment Limited (“19 Entertainment”) and entered into a long-term employment agreement with Simon Fuller, its founder and the creative force behind its most successful projects. In addition to overseeing the operations of 19 Entertainment and its subsidiaries, Mr. Fuller is a member of our Board of Directors and plays a key role in planning and implementing our overall creative direction. 19 Entertainment’s strategy is to create and retain an ownership interest in entertainment content and to seek to enhance the value of its content through the control of multiple complementary revenue streams including, for example, television, music, sponsorship and merchandising, touring and artist management.
IDOLS Brand
19 Entertainment’s multi-platform approach to the commercial utilization of its entertainment properties is best illustrated by the example of the IDOLS brand. In 1998, 19 Entertainment created what was to become the concept for “Pop Idol,” a televised talent contest for musical artists that allowed the viewing audience to participate in and ultimately select the winning performer via text messaging and telephone voting. The audience participation generates a pre-established market for the winning artists and other finalists who 19 Entertainment then has the right to represent with respect to artist management and merchandising. In the United States and United Kingdom, 19 Entertainment also enters into exclusive recording agreements with the winning artists and other finalists. The first television program based on this concept was Pop Idol , first broadcast in the United Kingdom in 2001 and in the United States, under the name American Idol in 2002. American Idol and/or local adaptations of the IDOLS television show format now collectively air in over 100 countries around the world. The popularity of the IDOLS brand around the world, most notably the American Idol series in the United States, has generated substantial revenue across multiple media platforms, in all of which 19 Entertainment retains a substantial ownership and/or economic interest.
FremantleMedia North America, Inc. (“FremantleMedia”), the content business production arm of the RTL Group, Europe’s largest television and radio broadcast company, is 19 Entertainment’s global television production and distribution partner for IDOLS programming and Sony BMG is 19 Entertainment’s record label partner with respect to IDOLS artists in most major territories around the world.
Though 19 Entertainment is a party to a variety of commercial relationships with its television and record label production and distribution partners to produce, broadcast, distribute and finance shows based on the IDOLS brand, 19 Entertainment retains a substantial interest in all aspects of such shows and their multiple revenue streams through its wholly owned operating subsidiaries both in the United States and the United Kingdom. 19 Entertainment’s principal operational and ownership interests are structured as follows:
· 19 TV Limited owns two-thirds of the IDOLS brand and co-produces the show in the United States with its partner, FremantleMedia, which owns the other one-third of the IDOLS brand.
· 19 TV Limited receives certain fees and revenues relating to the sublicensing of the brand and production and marketing of the shows based on the IDOLS brand around the world, including licensing and producer fees.
· 19 TV Limited shares a percentage of the revenues FremantleMedia derives from on-air sponsorships and sales of IDOLS branded merchandise.
4
· 19 Recordings Limited has the right to sign recording contracts with the finalists from the American Idol series in the United States and the Pop Idol series in the United Kingdom.
· 19 Management Limited has the right to manage the finalists.
· 19 Touring Limited has the right to produce IDOLS tours.
· 19 Merchandising Limited has the licensing and merchandising rights for the IDOLS tours and in the United States and United Kingdom is jointly responsible for off-air sponsorship of the televised programs.
Television
The typical model for a 19 Entertainment television project thus far, as demonstrated by the roll out of the IDOLS brand, has been the development of a compelling music themed television show that is capable of being broadcast on a global basis. Through the initial programming, 19 Entertainment is able to generate a significant fan base and, ultimately, build substantial ancillary revenue streams.
19 Entertainment created and co-produces the television show So You Think You Can Dance , which was initially broadcast on the Fox Broadcasting Network (“Fox”) in the summer of 2005 and is scheduled for a second season in the summer of 2006. In addition to television shows based on the IDOLS format and So You Think You Can Dance , 19 Entertainment, in the ordinary course of its business, continually develops new concepts for television projects and currently has several new television projects in various stages of development, in both the United States and the United Kingdom.
19 TV Limited/FremantleMedia Agreement
19 Entertainment, through its wholly owned subsidiary, 19 TV Limited, has entered into a worldwide partnership arrangement with FremantleMedia for the production and distribution of the IDOLS brand, which gives FremantleMedia the exclusive right to produce (or sublicense production) and distribute IDOLS programs and series throughout the world except in the United States, where 19 TV Limited co-produces the American Idol series. In the United States, the American Idol series airs on Fox, under an agreement between 19 TV Limited, FremantleMedia and Fox, as more fully described below under “Fox Agreement.”
Under the terms of the 19 TV Limited/FremantleMedia agreement, the IDOLS brand, together with all domain names and trademarks relating thereto are owned jointly by the parties, two-thirds by 19 TV Limited and one-third by FremantleMedia. In addition to its joint ownership of the IDOLS brand, 19 TV Limited has the right to receive certain fees and revenues relating to the sublicensing of the IDOLS brand and the production of television shows based on the IDOLS brand and format around the world. Specifically, 19 TV Limited receives:
· a percentage of the “Format Fee,” which is a percentage of the gross fees received by a local production company from a local broadcaster for production and transmission of the IDOLS series;
· a percentage of revenues derived from distribution of IDOLS series and programs after a deduction of a percentage of gross revenues and other deductions;
· a percentage of the net revenue derived from program sponsorship and program merchandising; and
· a percentage of the net revenue derived from local merchandising and management deals (outside the United States and the United Kingdom). 19 TV Limited retains 100% of artist management and artist merchandising income from the United States and the United Kingdom.
5
Fox Agreement
19 Entertainment, Fox and FremantleMedia have entered into a series of agreements, the most recent of which was entered into in November 2005, which together encompass the terms under which Fox is granted the right to air American Idol in the United States. Fox has been granted a perpetual and exclusive license, including the right of first negotiation and last refusal, to broadcast any non-scripted television programs featuring the American Idol brand or based on the American Idol format, or featuring contestants who appear in their roles as American Idol winners, intended for broadcast within the United States and its territories. Under the terms of the 2005 amendment, Fox has guaranteed production of at least four more seasons of American Idol (2006–2009), with an automatic renewal for up to two additional seasons upon the show achieving certain minimum ratings in the fourth and potential fifth years of the deal.
Fox pays FremantleMedia a flat, non-auditable license fee per episodic hour, as well as a premium license fee for each hour in excess of the initial season order. These fees are used by FremantleMedia to fund American Idol series production costs, excluding the fees of the judges and host, which are paid directly by Fox, over and above the license fees. FremantleMedia retains the balance of the Fox license fees minus production costs, and pays 50% of the balance directly to 19 TV Limited. Under the terms of the 2005 amendment, beginning with American Idol 5 (which commenced airing in January 2006), Fox pays an additional license fee directly to 19 TV Limited and FremantleMedia.
In addition to license fees, Fox also pays bonus fees depending on where the American Idol series is rated and ranked in the 18-49 age demographic. 19 TV Limited and FremantleMedia share the ratings/rankings bonus 50/50, with 19 TV Limited receiving its share directly from Fox. Fox also pays an executive producer fee per episodic hour, and a format fee equal to a percentage of the approved production budget, of which 19 TV Limited receives 50% and 40%, respectively.
Recorded Music
19 Entertainment has the exclusive right to select the record company entitled to sign contestants on television shows based on the IDOLS brand to long-term recording contracts. In the United States and the United Kingdom, 19 Entertainment typically options the recording rights to the top 24 finalists of each series of each television show based on the IDOLS brand, and then enters into recording agreements with each of the winners and certain finalists. 19 Entertainment is currently a party to long-term recording agreements with numerous best-selling former IDOLS contestants, including:
Artist
Idol Season
Kelly Clarkson
American Idol 1 - Winner
Ruben Studdard
American Idol 2 - Winner
Clay Aiken
American Idol 2 - Runner-Up
Fantasia Barrino
American Idol 3 - Winner
Carrie Underwood
American Idol 4 - Winner
Bo Bice
American Idol 4 - Runner-Up
Will Young
Pop Idol 1 - Winner
Gareth Gates
Pop Idol 1 - Runner-Up
The American Idol and Pop Idol winners and finalists listed above collectively have sold more than 23 million albums in the United States and United Kingdom alone.
Sony BMG is 19 Entertainment’s partner with respect to IDOLS -based recorded music in most major territories around the world. Ronagold Limited, a subsidiary of Sony BMG (“Ronagold”), is entitled to select the record company (which must be a Sony BMG group record company) in territories outside the United States and the United Kingdom which will sign the contestant-artists. In the United States and the United Kingdom, 19 Entertainment, through its wholly-owned subsidiary 19 Recordings Limited.
IDOLS Brand
19 Entertainment’s multi-platform approach to the commercial utilization of its entertainment properties is best illustrated by the example of the IDOLS brand. In 1998, 19 Entertainment created what was to become the concept for “Pop Idol,” a televised talent contest for musical artists that allowed the viewing audience to participate in and ultimately select the winning performer via text messaging and telephone voting. The audience participation generates a pre-established market for the winning artists and other finalists who 19 Entertainment then has the right to represent with respect to artist management and merchandising. In the United States and United Kingdom, 19 Entertainment also enters into exclusive recording agreements with the winning artists and other finalists. The first television program based on this concept was Pop Idol , first broadcast in the United Kingdom in 2001 and in the United States, under the name American Idol in 2002. American Idol and/or local adaptations of the IDOLS television show format now collectively air in over 100 countries around the world. The popularity of the IDOLS brand around the world, most notably the American Idol series in the United States, has generated substantial revenue across multiple media platforms, in all of which 19 Entertainment retains a substantial ownership and/or economic interest.
FremantleMedia North America, Inc. (“FremantleMedia”), the content business production arm of the RTL Group, Europe’s largest television and radio broadcast company, is 19 Entertainment’s global television production and distribution partner for IDOLS programming and Sony BMG is 19 Entertainment’s record label partner with respect to IDOLS artists in most major territories around the world.
Though 19 Entertainment is a party to a variety of commercial relationships with its television and record label production and distribution partners to produce, broadcast, distribute and finance shows based on the IDOLS brand, 19 Entertainment retains a substantial interest in all aspects of such shows and their multiple revenue streams through its wholly owned operating subsidiaries both in the United States and the United Kingdom. 19 Entertainment’s principal operational and ownership interests are structured as follows:
· 19 TV Limited owns two-thirds of the IDOLS brand and co-produces the show in the United States with its partner, FremantleMedia, which owns the other one-third of the IDOLS brand.
· 19 TV Limited receives certain fees and revenues relating to the sublicensing of the brand and production and marketing of the shows based on the IDOLS brand around the world, including licensing and producer fees.
· 19 TV Limited shares a percentage of the revenues FremantleMedia derives from on-air sponsorships and sales of IDOLS branded merchandise.
4
· 19 Recordings Limited has the right to sign recording contracts with the finalists from the American Idol series in the United States and the Pop Idol series in the United Kingdom.
· 19 Management Limited has the right to manage the finalists.
· 19 Touring Limited has the right to produce IDOLS tours.
· 19 Merchandising Limited has the licensing and merchandising rights for the IDOLS tours and in the United States and United Kingdom is jointly responsible for off-air sponsorship of the televised programs.
Television
The typical model for a 19 Entertainment television project thus far, as demonstrated by the roll out of the IDOLS brand, has been the development of a compelling music themed television show that is capable of being broadcast on a global basis. Through the initial programming, 19 Entertainment is able to generate a significant fan base and, ultimately, build substantial ancillary revenue streams.
19 Entertainment created and co-produces the television show So You Think You Can Dance , which was initially broadcast on the Fox Broadcasting Network (“Fox”) in the summer of 2005 and is scheduled for a second season in the summer of 2006. In addition to television shows based on the IDOLS format and So You Think You Can Dance , 19 Entertainment, in the ordinary course of its business, continually develops new concepts for television projects and currently has several new television projects in various stages of development, in both the United States and the United Kingdom.
19 TV Limited/FremantleMedia Agreement
19 Entertainment, through its wholly owned subsidiary, 19 TV Limited, has entered into a worldwide partnership arrangement with FremantleMedia for the production and distribution of the IDOLS brand, which gives FremantleMedia the exclusive right to produce (or sublicense production) and distribute IDOLS programs and series throughout the world except in the United States, where 19 TV Limited co-produces the American Idol series. In the United States, the American Idol series airs on Fox, under an agreement between 19 TV Limited, FremantleMedia and Fox, as more fully described below under “Fox Agreement.”
Under the terms of the 19 TV Limited/FremantleMedia agreement, the IDOLS brand, together with all domain names and trademarks relating thereto are owned jointly by the parties, two-thirds by 19 TV Limited and one-third by FremantleMedia. In addition to its joint ownership of the IDOLS brand, 19 TV Limited has the right to receive certain fees and revenues relating to the sublicensing of the IDOLS brand and the production of television shows based on the IDOLS brand and format around the world. Specifically, 19 TV Limited receives:
· a percentage of the “Format Fee,” which is a percentage of the gross fees received by a local production company from a local broadcaster for production and transmission of the IDOLS series;
· a percentage of revenues derived from distribution of IDOLS series and programs after a deduction of a percentage of gross revenues and other deductions;
· a percentage of the net revenue derived from program sponsorship and program merchandising; and
· a percentage of the net revenue derived from local merchandising and management deals (outside the United States and the United Kingdom). 19 TV Limited retains 100% of artist management and artist merchandising income from the United States and the United Kingdom.
5
Fox Agreement
19 Entertainment, Fox and FremantleMedia have entered into a series of agreements, the most recent of which was entered into in November 2005, which together encompass the terms under which Fox is granted the right to air American Idol in the United States. Fox has been granted a perpetual and exclusive license, including the right of first negotiation and last refusal, to broadcast any non-scripted television programs featuring the American Idol brand or based on the American Idol format, or featuring contestants who appear in their roles as American Idol winners, intended for broadcast within the United States and its territories. Under the terms of the 2005 amendment, Fox has guaranteed production of at least four more seasons of American Idol (2006–2009), with an automatic renewal for up to two additional seasons upon the show achieving certain minimum ratings in the fourth and potential fifth years of the deal.
Fox pays FremantleMedia a flat, non-auditable license fee per episodic hour, as well as a premium license fee for each hour in excess of the initial season order. These fees are used by FremantleMedia to fund American Idol series production costs, excluding the fees of the judges and host, which are paid directly by Fox, over and above the license fees. FremantleMedia retains the balance of the Fox license fees minus production costs, and pays 50% of the balance directly to 19 TV Limited. Under the terms of the 2005 amendment, beginning with American Idol 5 (which commenced airing in January 2006), Fox pays an additional license fee directly to 19 TV Limited and FremantleMedia.
In addition to license fees, Fox also pays bonus fees depending on where the American Idol series is rated and ranked in the 18-49 age demographic. 19 TV Limited and FremantleMedia share the ratings/rankings bonus 50/50, with 19 TV Limited receiving its share directly from Fox. Fox also pays an executive producer fee per episodic hour, and a format fee equal to a percentage of the approved production budget, of which 19 TV Limited receives 50% and 40%, respectively.
Recorded Music
19 Entertainment has the exclusive right to select the record company entitled to sign contestants on television shows based on the IDOLS brand to long-term recording contracts. In the United States and the United Kingdom, 19 Entertainment typically options the recording rights to the top 24 finalists of each series of each television show based on the IDOLS brand, and then enters into recording agreements with each of the winners and certain finalists. 19 Entertainment is currently a party to long-term recording agreements with numerous best-selling former IDOLS contestants, including:
Artist
Idol Season
Kelly Clarkson
American Idol 1 - Winner
Ruben Studdard
American Idol 2 - Winner
Clay Aiken
American Idol 2 - Runner-Up
Fantasia Barrino
American Idol 3 - Winner
Carrie Underwood
American Idol 4 - Winner
Bo Bice
American Idol 4 - Runner-Up
Will Young
Pop Idol 1 - Winner
Gareth Gates
Pop Idol 1 - Runner-Up
The American Idol and Pop Idol winners and finalists listed above collectively have sold more than 23 million albums in the United States and United Kingdom alone.
Sony BMG is 19 Entertainment’s partner with respect to IDOLS -based recorded music in most major territories around the world. Ronagold Limited, a subsidiary of Sony BMG (“Ronagold”), is entitled to select the record company (which must be a Sony BMG group record company) in territories outside the United States and the United Kingdom which will sign the contestant-artists. In the United States and the United Kingdom, 19 Entertainment, through its wholly-owned subsidiary 19 Recordings Limited.
Ronagold Limited -- referenced above is
The 2010 CKX Annual Report contained the following explanation of the recording contracts (this is Adam's contract year):
Recorded Music
19 Entertainment has the exclusive right to select the record company entitled to sign contestants on television shows based on the IDOLS brand to long-term recording contracts. In the United States and the United Kingdom, 19 Entertainment typically options the recording rights to the top 24 finalists of each series of each television show based on the IDOLS brand, and then enters into recording agreements with each of the winners and certain finalists. 19 Entertainment is currently a party to long-term recording agreements with numerous best-selling former IDOLS contestants, including:
Artist
Idol Season
Kelly Clarkson
American Idol 1 - Winner
Ruben Studdard
American Idol 2 - Winner
Clay Aiken
American Idol 2 - Runner-Up
Fantasia Barrino
American Idol 3 - Winner
Carrie Underwood
American Idol 4 - Winner
Chris Daughtry
American Idol 5 - Finalist
Kellie Pickler
American Idol 5 - Finalist
Jordin Sparks
American Idol 6 - Winner
Blake Lewis
American Idol 6 - Runner-Up
David Cook
American Idol 7 - Winner
David Archuleta
American Idol 7 - Runner-Up
Kristy Lee Cook
American Idol 7 - Finalist
Kris Allen
American Idol 8 - Winner
Adam Lambert
American Idol 8 - Runner-Up
Allison Ihareta
American Idol 8 - Finalist
Danny Gokey
American Idol 8 - Finalist
Will Young
Pop Idol 1 - Winner
The American Idol and Pop Idol winners and finalists to date collectively have sold more than 47 million albums in the United States and United Kingdom alone.
Sony Music Entertainment is 19 Entertainment’s record label partner with respect to IDOLS -based recorded music in most major territories around the world. Ronagold Limited, a subsidiary of Sony Music, is entitled to select the record company (which must be a Sony Music record company) in territories outside the United States and the United Kingdom which will sign the contestant-artists. In the United States and the United Kingdom, 19 Entertainment enters into recording contracts with the finalists and then grants an optional exclusive license to a Sony Music affiliate to select a Sony Music record company to handle the marketing, manufacturing and distribution of the records throughout the world. For the first four series of American Idol in the United States, RCA was the designated Sony Music affiliate. 19 Entertainment’s agreement with Ronagold with respect to American Idol in the United States expired following American Idol 4 , which completed its run in May 2005.
In November 2005, 19 Entertainment entered into an agreement with Sony Music, extending its rights to serve as the record label partner with respect to American Idol artists and designating Simco Limited, a wholly-owned subsidiary of Sony Music, as the new record partner for seasons subsequent to American Idol 4 . In the United States, Simco was granted five successive options to acquire the rights to participate as 19 Entertainment’s record label partner, after which it can require 19 Entertainment to select a designated Sony Music record label in the United States to act as licensee. The agreement with Sony Music and Simco expires following the currently airing American Idol 9 .
In the United States and the United Kingdom, the Sony Music record company that licenses the winning artist and/or any of the finalists pays to 19 Entertainment a recoupable advance, out of which 19 Entertainment funds an advance to the finalists/artists. Outside the United States and the United Kingdom, the designated Sony Music record company licenses the winning artist and/or any of the finalists directly and pays to them advances and royalties commensurate with the terms of Sony Music’s usual exclusive recording contracts for artists with one Platinum selling album prior to signature in the relevant country.
In further consideration for 19 Entertainment designating Sony Music as the continuing record label for American Idol artists, Fox agreed to pay to 19 Entertainment a non-recoupable annual fee for each of the fifth through ninth seasons of American Idol .
In addition to the aforementioned, pursuant to an agreement amongst 19 Entertainment, Fox, FremantleMedia and Apple, all of the American Idol contestant performances in audio and video are offered for sale exclusively through the iTunes Store . Music performances starting with the top 24 semifinalists through the season’s final performances are available to be downloaded the day after the show airs. iTunes also serves as a sponsor on the television show.
19 Entertainment has the exclusive right to select the record company entitled to sign contestants on television shows based on the IDOLS brand to long-term recording contracts. In the United States and the United Kingdom, 19 Entertainment typically options the recording rights to the top 24 finalists of each series of each television show based on the IDOLS brand, and then enters into recording agreements with each of the winners and certain finalists. 19 Entertainment is currently a party to long-term recording agreements with numerous best-selling former IDOLS contestants, including:
Artist
Idol Season
Kelly Clarkson
American Idol 1 - Winner
Ruben Studdard
American Idol 2 - Winner
Clay Aiken
American Idol 2 - Runner-Up
Fantasia Barrino
American Idol 3 - Winner
Carrie Underwood
American Idol 4 - Winner
Chris Daughtry
American Idol 5 - Finalist
Kellie Pickler
American Idol 5 - Finalist
Jordin Sparks
American Idol 6 - Winner
Blake Lewis
American Idol 6 - Runner-Up
David Cook
American Idol 7 - Winner
David Archuleta
American Idol 7 - Runner-Up
Kristy Lee Cook
American Idol 7 - Finalist
Kris Allen
American Idol 8 - Winner
Adam Lambert
American Idol 8 - Runner-Up
Allison Ihareta
American Idol 8 - Finalist
Danny Gokey
American Idol 8 - Finalist
Will Young
Pop Idol 1 - Winner
The American Idol and Pop Idol winners and finalists to date collectively have sold more than 47 million albums in the United States and United Kingdom alone.
Sony Music Entertainment is 19 Entertainment’s record label partner with respect to IDOLS -based recorded music in most major territories around the world. Ronagold Limited, a subsidiary of Sony Music, is entitled to select the record company (which must be a Sony Music record company) in territories outside the United States and the United Kingdom which will sign the contestant-artists. In the United States and the United Kingdom, 19 Entertainment enters into recording contracts with the finalists and then grants an optional exclusive license to a Sony Music affiliate to select a Sony Music record company to handle the marketing, manufacturing and distribution of the records throughout the world. For the first four series of American Idol in the United States, RCA was the designated Sony Music affiliate. 19 Entertainment’s agreement with Ronagold with respect to American Idol in the United States expired following American Idol 4 , which completed its run in May 2005.
In November 2005, 19 Entertainment entered into an agreement with Sony Music, extending its rights to serve as the record label partner with respect to American Idol artists and designating Simco Limited, a wholly-owned subsidiary of Sony Music, as the new record partner for seasons subsequent to American Idol 4 . In the United States, Simco was granted five successive options to acquire the rights to participate as 19 Entertainment’s record label partner, after which it can require 19 Entertainment to select a designated Sony Music record label in the United States to act as licensee. The agreement with Sony Music and Simco expires following the currently airing American Idol 9 .
In the United States and the United Kingdom, the Sony Music record company that licenses the winning artist and/or any of the finalists pays to 19 Entertainment a recoupable advance, out of which 19 Entertainment funds an advance to the finalists/artists. Outside the United States and the United Kingdom, the designated Sony Music record company licenses the winning artist and/or any of the finalists directly and pays to them advances and royalties commensurate with the terms of Sony Music’s usual exclusive recording contracts for artists with one Platinum selling album prior to signature in the relevant country.
In further consideration for 19 Entertainment designating Sony Music as the continuing record label for American Idol artists, Fox agreed to pay to 19 Entertainment a non-recoupable annual fee for each of the fifth through ninth seasons of American Idol .
In addition to the aforementioned, pursuant to an agreement amongst 19 Entertainment, Fox, FremantleMedia and Apple, all of the American Idol contestant performances in audio and video are offered for sale exclusively through the iTunes Store . Music performances starting with the top 24 semifinalists through the season’s final performances are available to be downloaded the day after the show airs. iTunes also serves as a sponsor on the television show.
Idol Recording Contracts Source is press reports and executive statements until 2005.
AI Season 1 though Season 4: Idols were signed to Simon Cowell's SYCO records within Sony BMG.
AI Season 5: Simon gave up his signing rights to Season 5 as part of a three-season contract extension he signed before 2003's American Idol 3.
AI Season 6 through Season 9: Simon's 2005 contract extension included
Idol creator Simon Fuller and his 19 Entertainment company had sued X-Factor producers Fremantle Media (19's Idol production partner) and Simco and Syco (Cowell's production company) for $170 million in Britain, allegedly that X-Factor -- which Fuller and 19 Entertainment have no role in -- was a rip-off of the Idol format that Fuller originally created.
Last week, the parties postponed the court case (which had finally come to trial in London's High Court) indefinitely as they attempted to agree on an out-of-court settlement. A settlement of the lawsuit was announced today, and although the terms of the agreement remain confidential, BBC News is reporting that the settlement involves Fuller and 19 receiving "a minority interest" in X-Factor as well as "other specified rights" in return for Cowell's agreement to sign an American Idol extension.
Last Thursday, Daily Variety had reported that according to the UK's BroadcastNow website, the deal was believed to involve Fuller and 19 receiving 20% of X-Factor's profits in return for Cowell receiving an even bigger percentage -- between 30 and 40% -- of American Idol's profits (in addition to getting to sign the show's winner, Cowell was already reportedly receiving about $8 million a season per the terms of his current Idol contract.)
Last week, the parties postponed the court case (which had finally come to trial in London's High Court) indefinitely as they attempted to agree on an out-of-court settlement. A settlement of the lawsuit was announced today, and although the terms of the agreement remain confidential, BBC News is reporting that the settlement involves Fuller and 19 receiving "a minority interest" in X-Factor as well as "other specified rights" in return for Cowell's agreement to sign an American Idol extension.
Last Thursday, Daily Variety had reported that according to the UK's BroadcastNow website, the deal was believed to involve Fuller and 19 receiving 20% of X-Factor's profits in return for Cowell receiving an even bigger percentage -- between 30 and 40% -- of American Idol's profits (in addition to getting to sign the show's winner, Cowell was already reportedly receiving about $8 million a season per the terms of his current Idol contract.)
2005 new Sony, FOX and Freemantle contracts:
Fox committed to building and hosting a dedicated AmericanIdol.com website, with the network and Idol producers taking two-thirds of any Internet-generated Idol revenue beyond a $5 million base threshold in 2006, $7 million in 2007 and increasing thereafter, according to an SEC filing. [Editor’s Note: Of course, we still recommend you get your ‘Idol’ news right here at RealityNewsOnline and at our sister site, Foxes On Idol.]
Fox also has the right to pursue further exposure for the show via wireless media through ringtones, video clips, and related services, with 19 and Fremantle taking 50% of telephony revenue above a base $3 million in 2006, $4.5 million in 2007 and increasing thereafter, according to the SEC filing.
Sony extended agreement with 19 and agreed to give 19 a higher share of royalties.
CKX Announces New American Idol Agreements With FOX and SonyBMG
FOX Guarantees At Least Four Additional Seasons of Hit Television Show
SonyBMG to Continue to Serve as Record Label for Idol Artists
NEW YORK, Nov 29, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- 19 Entertainment Limited, a wholly-owned subsidiary of CKX, Inc. (Nasdaq: CKXE), together with Simon Cowell, Fox Broadcasting, FremantleMedia and SonyBMG, issued a joint announcement today confirming they had reached agreements that will guarantee at least four, and as many as six, more seasons of American Idol beginning with American Idol 5, which is set to air starting in January 2006. As part of the deal, Fox announced that it had reached an agreement with Cowell to keep him on the hit series for at least five additional seasons.
Though the specific financial terms of the new agreements were not disclosed in the joint announcement, 19 Entertainment did confirm the following elements of the deal:
Under the terms of the new agreement with FOX, 19 Entertainment and FremantleMedia will receive a significantly increased license fee per season from FOX, reflective of the previously announced increases in advertising rates for the coming season. Additionally, 19 Entertainment will receive an annual payment tied to its recording agreement with SonyBMG.
In addition to guaranteeing at least four more seasons, the agreement provides for an automatic renewal for up to two additional seasons upon the show achieving certain readily obtainable minimum ratings in the fourth and potential fifth years of the deal.
Commencing with American Idol 5, FOX, whose parent company News Corp. has recently announced substantial investment in internet-based properties, will, at its own expense, build and host americanidol.com, which is expected to become the show's official website. 19 Entertainment, FremantleMedia and FOX will work together to develop content for the website, and will share the revenue generated under an agreed upon formula. 19 Entertainment and FremantleMedia, however, retain the exclusive right to develop and offer premium services on the website.
19 Entertainment and FremantleMedia have granted to FOX certain wireless telephony rights, including show-related or inspired ringtones, realtones and video footage. The parties will share the revenue generated from exploitation of these rights under an agreed upon formula.
FOX has agreed to pick-up at least two original shows produced jointly by 19 Entertainment and FremantleMedia over the next five years. This is in addition to FOX's recent decision to renew 19 Entertainment's summer hit So You Think You Can Dance?.
19 Entertainment and FremantleMedia will produce certain agreed upon shoulder programming to be broadcast on the Fox Reality Channel and the TV Guide channel.
SonyBMG will continue as the designated record label for winning American Idol contestants and 19 Entertainment will receive from SonyBMG a larger percentage of the revenue from the sales of recorded music from future American Idol artists.
For more detailed information regarding the agreements see CKX's Current Report on Form 8-K, which may be obtained at www.ckx.com or at the SEC's web site at www.sec.gov.
CKX acquired 19 Entertainment and its rights to American Idol in March of this year hoping to capitalize on the increase in the demand for globally recognized entertainment properties such as American Idol, resulting from advances in personalized distribution methods that allow consumers to exert greater control over the timing and method of content consumption. CKX believes the best evidence of this trend are the new agreements with FOX and SonyBMG and CKX's increased share of the revenue produced by American Idol.
In response to the joint announcement, Robert F.X. Sillerman, the Chairman and Chief Executive Officer of CXK commented, "We believe the significant increase in our economic share from American Idol under these new agreements, and the unlimited potential offered by partnering with FOX on internet rights and wireless platforms shows the increasing value of content in a world of newly developing and more personalized methods of entertainment distribution. These deals substantiate everything we believed when we chose to focus on acquiring premier content and partnering with its creators." Mr. Sillerman added "With this important step behind us, we can now accelerate our plans for additional growth from our existing properties and through additional partnerships and acquisitions."
Commenting on the new agreement with FOX, Simon Fuller, creator of American Idol and the Chief Executive Officer of 19 Entertainment, said "We are extremely excited that FOX has recognized the phenomenon of American Idol by providing the unprecedented guarantee of at least four and up to six more seasons of the show." Mr. Fuller continued "We look forward to working with FOX and our partners at Fremantle to build upon the success of the show and expand the American Idol content and brand into the evolving worlds of internet and mobile content distribution."
19 Entertainment also announced that it has settled its outstanding litigation with Simon Cowell and FremantleMedia. While the specific terms of the settlement remain confidential, 19 Entertainment confirmed that it will receive a minority interest in certain intellectual property and programming related to the X-Factor television program as well as other specified rights with respect to the show.
Link: ir.ckx.com/releasedetail.cfm?ReleaseID=180684
FOX Guarantees At Least Four Additional Seasons of Hit Television Show
SonyBMG to Continue to Serve as Record Label for Idol Artists
NEW YORK, Nov 29, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- 19 Entertainment Limited, a wholly-owned subsidiary of CKX, Inc. (Nasdaq: CKXE), together with Simon Cowell, Fox Broadcasting, FremantleMedia and SonyBMG, issued a joint announcement today confirming they had reached agreements that will guarantee at least four, and as many as six, more seasons of American Idol beginning with American Idol 5, which is set to air starting in January 2006. As part of the deal, Fox announced that it had reached an agreement with Cowell to keep him on the hit series for at least five additional seasons.
Though the specific financial terms of the new agreements were not disclosed in the joint announcement, 19 Entertainment did confirm the following elements of the deal:
Under the terms of the new agreement with FOX, 19 Entertainment and FremantleMedia will receive a significantly increased license fee per season from FOX, reflective of the previously announced increases in advertising rates for the coming season. Additionally, 19 Entertainment will receive an annual payment tied to its recording agreement with SonyBMG.
In addition to guaranteeing at least four more seasons, the agreement provides for an automatic renewal for up to two additional seasons upon the show achieving certain readily obtainable minimum ratings in the fourth and potential fifth years of the deal.
Commencing with American Idol 5, FOX, whose parent company News Corp. has recently announced substantial investment in internet-based properties, will, at its own expense, build and host americanidol.com, which is expected to become the show's official website. 19 Entertainment, FremantleMedia and FOX will work together to develop content for the website, and will share the revenue generated under an agreed upon formula. 19 Entertainment and FremantleMedia, however, retain the exclusive right to develop and offer premium services on the website.
19 Entertainment and FremantleMedia have granted to FOX certain wireless telephony rights, including show-related or inspired ringtones, realtones and video footage. The parties will share the revenue generated from exploitation of these rights under an agreed upon formula.
FOX has agreed to pick-up at least two original shows produced jointly by 19 Entertainment and FremantleMedia over the next five years. This is in addition to FOX's recent decision to renew 19 Entertainment's summer hit So You Think You Can Dance?.
19 Entertainment and FremantleMedia will produce certain agreed upon shoulder programming to be broadcast on the Fox Reality Channel and the TV Guide channel.
SonyBMG will continue as the designated record label for winning American Idol contestants and 19 Entertainment will receive from SonyBMG a larger percentage of the revenue from the sales of recorded music from future American Idol artists.
For more detailed information regarding the agreements see CKX's Current Report on Form 8-K, which may be obtained at www.ckx.com or at the SEC's web site at www.sec.gov.
CKX acquired 19 Entertainment and its rights to American Idol in March of this year hoping to capitalize on the increase in the demand for globally recognized entertainment properties such as American Idol, resulting from advances in personalized distribution methods that allow consumers to exert greater control over the timing and method of content consumption. CKX believes the best evidence of this trend are the new agreements with FOX and SonyBMG and CKX's increased share of the revenue produced by American Idol.
In response to the joint announcement, Robert F.X. Sillerman, the Chairman and Chief Executive Officer of CXK commented, "We believe the significant increase in our economic share from American Idol under these new agreements, and the unlimited potential offered by partnering with FOX on internet rights and wireless platforms shows the increasing value of content in a world of newly developing and more personalized methods of entertainment distribution. These deals substantiate everything we believed when we chose to focus on acquiring premier content and partnering with its creators." Mr. Sillerman added "With this important step behind us, we can now accelerate our plans for additional growth from our existing properties and through additional partnerships and acquisitions."
Commenting on the new agreement with FOX, Simon Fuller, creator of American Idol and the Chief Executive Officer of 19 Entertainment, said "We are extremely excited that FOX has recognized the phenomenon of American Idol by providing the unprecedented guarantee of at least four and up to six more seasons of the show." Mr. Fuller continued "We look forward to working with FOX and our partners at Fremantle to build upon the success of the show and expand the American Idol content and brand into the evolving worlds of internet and mobile content distribution."
19 Entertainment also announced that it has settled its outstanding litigation with Simon Cowell and FremantleMedia. While the specific terms of the settlement remain confidential, 19 Entertainment confirmed that it will receive a minority interest in certain intellectual property and programming related to the X-Factor television program as well as other specified rights with respect to the show.
Link: ir.ckx.com/releasedetail.cfm?ReleaseID=180684
19 Entertainment News
March 18, 2005: American Idol™ Joins Elvis at CKX, Inc.
Robert F.X. Sillerman's CKX Acquires 19 Entertainment, Creator of American Idol, and Partners with Founder, Simon Fuller
NEW YORK -- March 18, 2005 -- Sports Entertainment Enterprises, Inc. d/b/a CKX, Inc., the control of which was recently acquired by Robert F. X. Sillerman, announced today that it has acquired 19 Entertainment Limited, the United Kingdom-based company best known for creating the American Idol™ television program. In addition, CKX has entered into a long-term agreement with Simon Fuller, the founder and the creative force behind 19's most successful projects.
Link: ir.ckx.com/releasedetail.cfm?ReleaseID=163014
May 10, 2011 - CKX (19 Entertainment's parent company will be taken private) American Idol company bought for $509m by Apollo Global Management
Link: www.guardian.co.uk/media/2011/may/10/apollo-global-management-buys-ckx
Yeezhh talk about shady business contracts. But then again if its between Simon Fuller and Cowell I would go with Fuller because he is the lesser of two evils. As for the mumbojumbo that is the page numbers I think Q3 is one of the few people here who is familiar with the legalese of recording contracts and can ascertain whether all that bullsh*t is really necessary.