Reality show producer Core Media is facing some reality of its own. The company behind American Idol, So You Think You Can Dance, Man v. Food, and other offerings seems to be feeling the chill now that American Idol is taking its final bow after 15 seasons. The show that produced recording stars such as Jennifer Hudson, Adam Lambert, Chris Daughtry, Carrie Underwood, and Kelly Clarkson is looking at a few financial issues now that its top show is retired.
In its New York Chapter 11 bankruptcy filing, Core Media reports assets of $73 million, $10 million in cash, but states that it owes $398 million in debts. Show creator Simon Fuller is owed 3.37 million, and it is speculated that a payment demand made on April 11 from Fuller is the legendary last straw. Other creditors include Hollywood players such as Sony Pictures, Creative Artists Agency, Fox Broadcasting (which airs So You Think You Can Dance), and Dick Clark Productions. Beyond that, private capital seems to be the biggest class of creditors. While the company reportedly reached agreements to restructure with Crestview Media Investors and Tennenbaum Capital Partners, other investor groups such as Bayside Capital, and Hudson Bay Capital Management.
The Idol brand suffered from a proliferation of other singing shows, declining ratings, and the loss of major advertisers such as Coca-Cola and AT&T. However, Simon Fuller had recently taken steps in the UK that could have led to an involuntary receivership in the UK. It is widely thought that the demand for payment and the overseas filing triggered the bankruptcy filing in New York. Core received permission from Judge Stuart Bernstein to access lenders’ cash and begin covering its normal expenses such as payroll.
However, just like in the comic books, death may not be forever. Rumors have been swirling even as the show aired its final episode that Idol was getting ready for a reboot. Ryan Seacrest’s enigmatic sendoff, “Good night, America. For now.” seemed to imply that there was still more in the works. Certainly creator Simon Fuller gave that impression in an interview with Billboard magazine. In the interview, Fuller said that the hiatus will give him time to come up with a new and improved Idol, a more immersive experience that will appeal to the next generation of viewers.
Anyone can go bankrupt. You don’t have to be a Baller or Hollywood player to get in way over your head. It happens all the time. More than anything, I would like you to know that bankruptcy is not the end, but in fact very often a beginning. When you’re in over your head, and can no longer get a grip on your debts whether you are solvent or insolvent, it is time to take a long and rational look at what bankruptcy can do for you. If you find yourself reading this and thinking about your own situation, give us a call and schedule a free consultation. You would be surprised what filing for bankruptcy can do for you.