BY ANTHONY EFFINGER AND DANIEL TAUB BLOOMBERG NEWS
Posted on Sunday, June 7, 2009
Robert F.X. Sillerman, the media baron who owns the rights to Elvis Presley, had a great run until he tried to break into real estate.
The 61-year-old Sillerman made a fortune in radio, buying up stations nationwide and selling them en masse for $2.1 billion in 1998. He then rolled up concert venues and talent agencies for the likes of Metallica and basketball star Michael Jordan and sold that business for $4 billion in 2000. A year later, he co-produced the Broadway adaptation of his friend Mel Brooks' movie The Producers.
Sillerman made what may have been his best deal in 2005, when he bought television's American Idol, the talent show that has franchises around the world and has topped U.S. TV ratings.
Then, in 2007, Sillerman rolled the dice on real estate - at exactly the wrong time. He started a company called FX Real Estate and Entertainment Inc. and took over 18 acres on the Las Vegas Strip. He borrowed $475 million through Zurich, Switzerlandbased Credit Suisse Group AG to pay for the property and start developing a resort with an Elvis theme.
Sillerman owns the commercial rights to Elvis and a 90-year lease on Graceland, Elvis' Memphis home, through another company, New York-based CKX Inc., which also owns Idol.
The FX investment turned out to be a blunder by a deal maker who, according to business partners and friends, rarely makes them.
"Bob always sees the big picture and knows how to maximize things," said Brooks, 82. "He's one of the brightest people I know."
COMPANY DELISTED
The Vegas project is in default. Plans for a new hotel and convention center at Graceland are on hold. FX Real Estate fell to pennies a share in April from its February 2008 peak of $7.88 and was delisted from the Nasdaq stock exchange.
A separate real estate venture - construction of a resort on the Caribbean island of Anguilla, featuring residences costing as much as $12 million and a hotel with personal butlers - also stands unfinished and in default.
"Some people are mad at Bob because he had the golden touch," said William Huff, founder of W.R. Huff Asset Management Co. in Morristown, N.J., which is the largest investor in FX Real Estate after Sillerman himself.
"I think there was a naive perception of infallibility," Huff said. "Bob is not infallible."
Priscilla Presley, Elvis' wife from 1967 to 1973, said the economy, not Sillerman, is to blame.
"I have a lot of confidence in Bob," she said. "When the timing is right, I'm sure all this will come back on the boards."
Sillerman paid Priscilla Presley $6.5 million for commercial rights to the Presley name.
But he said he got into something he didn't really understand in Las Vegas. "I'm not very knowledgeable about real estate," he said. "I think I've demonstrated that to the world."
There are signs that he has stretched. In March 2008, he took out a $23 million loan from Deutsche Bank AG on his fivestory town house on the Upper East Side of Manhattan, according to property records. Sillerman said the loan was for estate planning purposes and declines to say more.
DEUTSCHE BANK LOANS
He disclosed another loan from Deutsche Bank, for $29 million, in an April filing with the U.S. Securities and Exchange Commission. It's backed by his 29 percent stake in CKX. If CKX shares fall to $2.50, according to the filing, the loan defaults. CKX was trading at $8 late last week, up more than 90 percent in 2009 after a 64 percent slide in 2008. The loan in the April filing, Sillerman says, was for investment purposes.
CKX is good collateral. Sillerman is chief executive officer of the company, which he formed in 2004 to buy up entertainment properties. It acquired Simon Fuller's 19 Entertainment Ltd., the company that owns American Idol, in 2005, for $161 million plus 1.9 million shares of CKX. There are Idol clones in 100 countries.
"It's the only show that can consistently bring in 24 [million] or 25 million viewers in a telecast," said Brad Adgate, senior vice president at Horizon Media Inc., a New York-based company that buys slots for advertisers.
That audience means News Corp.'s Fox network can charge advertisers, which include Apple Inc., AT&T Inc. and Coca-Cola Co., $650,000 for a 30-second commercial.
Idol finalists have sold more than 42 million albums and 47 million single-song downloads, according to Billboard magazine. Kris Allen, the 23-yearold UCA student from Conway, was crowned this year's winner, with almost 100 million votes cast after his final performance in May.
Sillerman profits from American Idol through his stake in CKX. Revenue from Idol advertising, merchandise sales and touring by its performers rose 15 percent to $96 million in 2008 and accounted for about a third of CKX's $288.1 million of total revenue.
Paul Kanavos, a partner in the Vegas and Anguilla projects, says that if anyone can recover from the real estate wreck, it's Sillerman. "He's the calmest, coolest businessman I've ever met," Kanavos said.
Sillerman has built and sold five public companies, making money for investors - and himself - each time. None of his many friends in the entertainment industry will be surprised if he launches a new public company sometime soon - if only to put the failure of the last one behind him.
Article Source: http://www.nwanews.com/adg/Business/261481/
Thursday, 11 June 2009
Elvis' Graceland Stable Opens for Tours; Rescued Horses Helped
by: Kimberly S. Brown, Editor
June 07 2009, Article # 14312
Sometimes promotion of the horse industry and assistance for unwanted horses comes from unusual places. Did you know Elvis Presley had a stable at his home at Graceland in Memphis, Tenn.? Or that he sometimes rode a horse up to the gates of Graceland to sign autographs? Did you know rescue horses have lived there (and still do)?
The stable at Graceland was recently opened to visitors for the first time, and there are four horses living there!
The stables have housed various horses over the years, and according to an article on elvis.com, "Some were distant relatives of the original horses, while others have been rescue horses."
Elvis' wife, Priscilla, became involved in the Fayette County Tennessee Animal Rescue, according to the article, and some of the horses in the past have come from the rescue.
For current and historic photos of the stable visit photos.elvis.com.
Article Source: http://www.thehorse.com/ViewArticle.aspx?ID=14312
June 07 2009, Article # 14312
Sometimes promotion of the horse industry and assistance for unwanted horses comes from unusual places. Did you know Elvis Presley had a stable at his home at Graceland in Memphis, Tenn.? Or that he sometimes rode a horse up to the gates of Graceland to sign autographs? Did you know rescue horses have lived there (and still do)?
The stable at Graceland was recently opened to visitors for the first time, and there are four horses living there!
The stables have housed various horses over the years, and according to an article on elvis.com, "Some were distant relatives of the original horses, while others have been rescue horses."
Elvis' wife, Priscilla, became involved in the Fayette County Tennessee Animal Rescue, according to the article, and some of the horses in the past have come from the rescue.
For current and historic photos of the stable visit photos.elvis.com.
Article Source: http://www.thehorse.com/ViewArticle.aspx?ID=14312
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