As a handful of investors packing thick wallets and tendering hefty bids circle CKX Inc., the company that produces ‘American Idol,’ the Fox series’ longevity has again come into focus.
Coming off a typical 9 percent decline in viewers and facing its first season sans judge Simon Cowell, “What I see in my mind is a series of question marks,” Brent Poer, a senior VP at the advertising firm MediaVest, tells the Los Angeles Times.
Yet as much as Fox might be fretting over an ‘Idol’ without Cowell (who is now is developing a U.S. edition of ‘The X Factor’ to debut on Fox in fall 2011), there is a plus to his subtraction. Investment analyst Mark Argento of Craig-Hallum Capital Group posits that with Cowell’s $35 million salary deducted from Fox’s cost of doing business and Fox collecting some $800 million in ad revenue, ‘Idol’ can remain profitable “even if the ratings get cut in half.”
Of course, no one goes into a nine-figure deal hoping for a ratings drop. So the question remains: What exactly do those offering upwards of $600 million to buy CKX hope to get for their money?
At the very least, they have this coin to count on, as detailed by the Times:
* A flat fee, paid by Fox to CKX and coproducer Fremantle Media, of $1 million to $1.5 million per hour for the season’s first 37 episodes. The fee then surges for any hours beyond that first batch – and mind you, this past season Fox ordered an additional 19.
* A supplemental “contractual license fee” that this past round totaled $35.5 million
* Bonuses paid based on the show’s ratings
What do you think, ‘Idol’ faithful? Should the show in fact brace for a 50-percent plunge in viewership? What will be the key to bouncing back from the lackluster Season 10?