“American Idol” Producer Core Media Group Files for Chapter 11 Bankruptcy

by San Antonio Attorney

Core Media, producer of top billed shows “American Idol” and “So You Think You Can Dance”, has a total of $398 million in debt.  Core recently filed for Chapter 11 Bankruptcy in New York.

Core was founded 10 years ago and drawn in into a joint venture with other titan companies such as 21st Century Fox and Apollo Global Management.

According to the bankruptcy filing, the company has a debt of $398 million to third parties such as Tennenbaum Capital Partners, Crestview Media Investors, Bayside Capital and Hudson Bay Capital Management.

Simon Fuller, credited as the creator of “American Idol”, is the top unsecured creditor and is owed more than $3.37 million.

Marc Graboff, the second biggest unsecured creditor, is owed a total of $1.32 million in severance.

Core’s capital structure is now considered unsustainable since Idol ended.  Although it is still earning royalties from Fox Network for “So You Think You Can Dance”, the company is still facing financial difficulties.

The employee base was reduced through a shared service agreement with another company.  However, this outsourcing agreement was officially terminated in 2015.

The earnings from Idol have dropped tremendously in 2014 by $15 million, according to court papers.  This occurred when Idol’s ratings also dropped.  The company has also suffered a decrease of the total revenue of $35.6 million in the first half of 2015.

The company, run by its president Peter Hurwitz and financial officer Scott Frosch, have failed to secure business connections to help keep the company afloat.  Tennenbaum and Crestview are in the process of negotiating with Core.  There have been reports that it finally reached an agreement of restructuring the company and finalizing a global deal in the near future for the benefit of Core Media.

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