Master of the fame game
Updated 10/17/2006 4:17 AM ET
RobertF.X. Sillerman with memorabilia of Elvis and Muhammad Ali.
CKX paid $114.2 million for rights to the name and likeness of Elvis Presley, as well as Graceland's tourist operations.
ABOUT SILLERMAN
• Born: New York
• College: Brandeis University, magna cum laude.
• Early music taste: Motown and folk, "Although I was fascinated by Elvis on his comeback."
• Fundraising friends: His benefits for Southampton College included Tony Bennett, Jimmy Buffett, Crosby, Stills & Nash, The Doobie Brothers, Bob Dylan, Tom Petty, Paul Simon, Rod Stewart, James Taylor, Tina Turner, and Brian Wilson.
• Recent reading: Generations: The History of America's Future, 1584 to 2069 by Neil Howe and William Strauss.
• Favorite movies: Gone With the Wind, To Kill A Mockingbird, The Godfather.
• Sports: "I've taken up golf again. I played when I was young. I gave the game up for 30 years."
By David Lieberman, USA TODAY
NEW YORK — Maybe billionaire Robert F.X. Sillerman misunderstood the catchphrase his pal and sometime business partner Mel Brooks likes to drop into his movies and musicals.
The comedian's line: "It's good to be the king."
Not to buy The King.
Too late. Sillerman's company, CKX, paid $114.2 million in cash and stock last year for rights to the name and likeness of Elvis Presley as well as tourist operations at his Graceland mansion.
PHOTOS: The many worlds of CKX
That was just CKX's opening chord. It since has added rights to a roundtable of pop-culture royalty, including Muhammad Ali, American Idol and British soccer star David Beckham. It also snagged the firm that manages Robin Williams, Billy Crystal and Woody Allen and is a business adviser to the potential ultimate catch: The Beatles.
Is this a business? Or is Sillerman just a rich trophy collector?
The entrepreneur, who helped revolutionize radio and concerts in the 1990s, says he's surfing a "sea change" in entertainment.
Digital technologies have sapped the power of TV networks, radio stations, record companies and other traditional media to create mass-market superstars. TiVos, iPods, cellphones and DVD players give consumers control over what they see and hear — and they tend to choose names they already know, he says.
"That places a premium value on things that are ubiquitous, that don't need a definition," says Sillerman, 58. "Everyone knows what it means when you say 'Elvis Presley.' I'm not a big believer in taking creative risk. The thrust for CKX will be to participate with the brightest and best to see if in these new distribution technologies there are ways to create other ubiquitous pieces of content or brands."
Sillerman, who owns 35% of CKX, has a lot riding on his dead or aging pop icons and a show, Idol, that's getting long in the tooth in TV years as it prepares to return to Fox in January for its sixth season.
More than 70% of the company's $466 million in assets as of midyear were intangible — such as the estimated worth of its stars' reputations. That value can vanish if consumers turn off on Elvis' sneer or Idol judge Simon Cowell's scowl.
Many investors have little appetite for that risk. CKX shares have dropped about 32%, to $13.93 since February 2005 when Sillerman acquired Sports Entertainment Enterprises, a publicly traded firm with virtually no assets, and renamed it CKX. (The first two letters come from the slogan "Content is King." As for the "X," that's something Sillerman threw in from his middle initials. He won't say what they mean.)
"It's a baby boomer play," says Vogel Capital Management's Harold Vogel. "Baby boomers have a lot of money and time as they retire. You can play that through the pharmaceutical companies, so why not this? They've got to have fun, too."
A history of success
Even those who question Sillerman's strategy know it's foolish to underestimate an entrepreneur who already reshaped two industries, even as he served for 13 years as chancellor and patron of Long Island's Southampton College, won his battle with cancer of the tongue and created The Tomorrow Foundation, which is run by his wife, Laura Baudo Sillerman.
The son of a radio ad and TV syndication pioneer — his father's firm once had Lassie — Sillerman made his name partnering with legendary DJ "Cousin Brucie" Morrow to amass a 71-station radio empire. They sold SFX Broadcasting to Hicks Muse for $2.1 billion in 1998.
Then Sillerman rocked the concert and live entertainment industry, buying local promoters and venues to create its first colossus: SFX Entertainment. Clear Channel bought it for $4.4 billion in 2000, then spun off the unit last year as Live Nation.
"He can get just as excited as a kid by a fun idea," says friend David Stern, the NBA's commissioner.
A producer who produces
Sillerman demonstrated that again in 1999 when he ponied up $2 million for a 20% stake in Brooks' musical The Producers. (Unlike the show's protagonist, Max Bialystock, Brooks didn't ask for a check made out to "Cash.")
Brooks says, "He's a bit of a genius when it comes to choosing items and how to market them, how to treasure them.
"I'm putting together Young Frankenstein, the musical," Brooks adds. "I hope he'll be the leading producer. He could put up all the money, half the money, whatever he wants. But I need his judgment on who's talented, what's good, and where to book it on the road — because he has a lot of tremendous live entertainment experience from SFX. He knows how not to lose money on the road."
Sillerman first honed those skills in advertising and youth marketing, beginning with a magazine sales operation he created as a political science major at Brandeis University.
Given all of his deals, "There actually are people who think that I'm trained in law or finance," says Sillerman, who grew up in the Bronx, though in its affluent Riverdale neighborhood where he attended private schools. "I guess I am trained in it from the school of hard knocks, the street school. I'm from the other side of the tracks."
Sillerman's faith in his sociological acumen drives his hunt for more superstar marketing deals while he oversees initiatives to keep his properties evergreen. He also says that next year he'll unveil a venture — he won't describe it yet — that could "have a profound impact" on all of entertainment. "We're at a very interesting inflection point for this company."
More pushing of Elvis as a 'commodity' not as the human being we know and love him to be!
