‘Idol’ Error Costs CKX $2.3M

On the heels of a mistake that lowered second quarter revenue by $2.3 million, CKX, Inc., reportedly has threatened more pink slips on top of the 50 or so “redundancies” that have already been axed, and told potential buyers to essentially put up or walk.

CKX overestimated first quarter revenue from “American Idol,” according to Bloomberg Businessweek, and had to make a second-quarter adjustment to correct the mistake. The over-accrual by CKX was the result of a “misinterpretation” of the show’s ninth-season contract and, apparently, related to host Ryan Seacrest’s paycheck.

Seacrest reportedly signed contracts last year with CKX guaranteeing him $45 million over three years through the 2012 season. CKX paid $28.5 million through June 30, and will pay him $16.5 million more through 2012, according to a regulatory filing.

Still, second quarter revenue reportedly rose 12 percent to $89.4 million while net income rose 51 percent to $7.6 million. Earnings increased to 7 cents a share from 5 cents, after dividend payments to preferred shareholders and income paid to minority interests, according to Businessweek.

But after a rocky year for the “American Idol” franchise and shakeups in the ranks of CKX, it seems company execs are getting impatient with the sale process.

During CKX’s Aug. 16 earnings call, execs said the three likely bidders for the company – none of whom has tendered an actual offer – would find out in the next “couple of weeks” if the sale will remain on the table if bids aren’t forthcoming.

So far, founder and former CEO Robert F.X. Sillerman, “American Idol” creator Simon Fuller and a partnership between One Equity Partners and Allen Shapiro have expressed interest in buying CKX. The company acknowledged talks with Sillerman, who has notified the Securities and Exchange Commission that he is prepping a cash offer for CKX between $4.40 and $5.75 per share, according to the Los Angeles Times.

In the meantime, the company says it will continue to cut costs on top of the $15 million already trimmed, in part at the expense of 50 former employees.

In addition to being the parent of “Idol” and “So You Think You Can Dance” producer 19 Entertainment, CKX controls licensing and merchandising rights to the images of Elvis Presley and Muhammad Ali, and operation of Presley’s Graceland mansion in Memphis, Tenn.