November 30, 2005

Legal settlement has ‘Idol’ on Fox till ’09

By Mimi Turner and Cynthia Littleton

LONDON/LOS ANGELES (Hollywood Reporter) - British pop
moguls Simon Cowell and Simon Fuller have settled their
differences, and now Fox has sealed a deal to keep "American
Idol" humming on the network through at least 2009.

The two Simons were engaged in a legal battle over the
Cowell-produced U.K. TV hit "X Factor" format, which Fuller
claimed was a clone of his hugely popular "Pop Idol" format.

As part of the settlement, Fuller will become a part owner
of "X Factor," and the two partners have struck a separate deal
giving Fox the U.S. rights to "X Factor."

The settlement also cleared the way for Cowell to cut a new
deal to remain with Fox's mega-hit "American Idol," which is
produced by Fuller's 19 Entertainment and FremantleMedia.

Fox has committed to ordering at least four more seasons of
"Idol," starting with the fifth incarnation of the amateur
sing-off competition series set to bow in January. The deal
includes an automatic renewal option for two additional seasons
so long as "Idol" hits preset ratings targets during its run in

According to a Securities and Exchange Commission filing
Tuesday by 19 Entertainment's New York-based parent company,
CKX Inc. -- owned by billionaire investor Robert F.X. Sillerman
-- the "Idol" renewal calls for Fox to pay 19 and Fremantle an
additional $18 million (on top of the show's regular
seven-figure-per-episode license fee) for the roughly 40
episodes on deck for the 2006 edition of the show that airs
twice a week. In 2007, the premium Fox will pay climbs to $21.5
million, rising to $35.5 million for the 2011 edition should
the show run that long, according to the SEC filing.

The new pact also secures Cowell's services as a judge on
"American Idol" for five more seasons, starting with the
upcoming 2006 edition. And Sony BMG also has renewed its "Idol"
ties as the recording home of the ultimate winners of the show.
According to the SEC filing, the new arrangement calls for Sony
BMG to pay 19 a higher percentage of sales from "Idol"-related
recordings in the U.S. and U.K., plus a fee of $5 million per
season for the next five "American Idol" editions.

The new "American Idol" deal between Fox and 19
Entertainment and Fremantle also calls for the network to order
at least two additional non-"Idol" series co-produced by 19 and
Fremantle. Fox also has committed to building and hosting a
dedicated Web site, with the network and
"Idol" producers taking two-thirds of any Internet-generated
"Idol" revenue beyond a $5 million base threshold in 2006, $7
million in 2007 and increasing thereafter, according to the SEC

Moreover, the "Idol" partners have granted Fox the right to
exploit the show in the emerging world of wireless media
through ringtones, video clips and related services, with 19
and Fremantle taking 50% of telephony revenue above a base $3
million in 2006, $4.5 million in 2007 and increasing
thereafter, according to the SEC filing.

Although it was a long, complex negotiation, Cowell
stressed in an interview Tuesday that he and Fuller had managed
to stay friendly through their business dispute. And now that
the legal wrangling is behind them, the two are firmly focused
on future projects.

"The deals that we've worked out here are as much (about)
making new (non-'Idol') shows as it was about securing the
future of 'American Idol,"' Cowell said. "Genuinely, everybody
has come out of this with closer relationships than we had
before. You don't enter into agreements of this length with
people that you're going to be at loggerheads with."

Fuller launched legal action against Cowell and "X Factor"
producer FremantleMedia in September 2004. The case had been
due to be heard at London's High Court last week but was
adjourned in preference for an out-of-court settlement.

"Simon Cowell has been a key component in the incredible
success of 'American Idol,' and I am delighted to have reached
an agreement that will see this relationship continue and grow
over future years," Fuller said in a statement.

As for all the recent speculation that Fox aims to shift
"American Idol" out of its regular Tuesday-Wednesday scheduling
pattern to a time slot on Thursday, Cowell said he didn't know
what the network's plans were but wasn't concerned about any
possible time slot shift.

"Wherever we sit on the network, we'll be fine," Cowell
said. "Regardless of where we play, our focus now must be on
making the greatest shows we can, and the audience will find

Reuters/Hollywood Reporter