Fox-Apollo TV Merger Joins ‘Idol’ With ‘Biggest Loser’
Rupert Murdoch’s 21st Century Fox Inc. plans to form a TV-production venture with Apollo Global Management LLC (APO), combining the companies that make “American Idol” and “The Biggest Loser.”
Fox, the New York-based media company, and funds affiliated with Apollo, the private-equity group led by Leon Black, reached a preliminary accord to own and manage the venture, the parties said in a statement today.
Murdoch would combine Fox’s Shine Group with Apollo’s Endemol and Core Media Group under the agreement. His daughter, Elisabeth, is founder and chairman of Shine, which produces and distributes shows in 11 countries, according to its website. Core Media owns “American Idol,” while Endemol is the Dutch producer of shows including “Big Brother.”
“It is unclear at this point if Shine on its own can reach the scale it needs,” Paul Sweeney, a Bloomberg Industries analyst, wrote in an e-mail. “Forming a new, larger venture with Endemol and Core Media may allow it to reach scale and greater profitability sooner.”
Fox said the parties have yet to work out the conditions of the deal and that there’s no assurance it will be completed.
Combining three companies would allow the new business to obtain independent financing and reduce production costs, according to a Fox spokesman. Financial terms weren’t announced.
A definitive agreement would combine three producers of television fare, including unscripted programs and game shows, at a time when U.S. broadcast networks are focused more on scripted programs, and the once hugely popular “American Idol” has tumbled in the ratings for Fox.
Endemol has increased production of scripted programming by 75 percent over the past five years, according to the company’s website. Fox unveiled 12 new shows for its 2014-2015 schedule on May 12. Only one was a reality show, “Utopia,” from Endemol co-founder John de Mol and produced by Shine.
It also could create a separate vehicle for Murdoch’s daughter after her brothers Jamesand Lachlan were recently given expanded roles at Fox and the family’s publishing empire, News Corp., owner of the Wall Street Journal, according to Michael Wolff, author of “The Man Who Owns the News: Inside the Secret World of Rupert Murdoch.”
“It may be a way for her to get away from the company,” Wolff said in a telephone interview.
Fox fell 0.8 percent to $34.02 at the close in New York. The Class A shares have retreated 3.3 percent this year. Apollo lost 1.6 percent to $25.28 and has declined 20 percent in 2014.
Fox acquired Shine for 415 million pounds ($673 million) in 2011. It produces “The Biggest Loser” which airs on NBC as well as “MasterChef Junior,” which returns to Fox this year.
Core produces “American Idol,” which remains the most-watched series on the Fox broadcast network. Apollo purchased the company, then called CKX, for $509 million in 2011. Last year, Core sold its interest in the merchandising rights to Elvis Presley.
(An earlier version of this story was corrected to delete inaccurate references to Elvis Presley rights.)
To contact the editors responsible for this story: Anthony Palazzo at email@example.com Rob Golum, James Callan