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Entrepreneur expects to profit from collecting stars

By Wire services
Published April 16, 2006

The media entrepreneur who controls the rights to Elvis Presley, American Idol and soccer star David Beckham has added another star to his roster: Muhammad Ali.

Robert F.X. Sillerman, chief executive of entertainment company CKX, said last week that his company had paid $50-million for an 80 percent stake in Ali's name, image and likeness. Twenty percent will be retained by Ali and his company, GOAT (short for "greatest of all time").

Sillerman is not just a fan of names big enough to be world icons. He sees Ali and Elvis as marketing juggernauts and - here's the real secret - icons who have not been so overused as to exhaust a global audience.

"When you have the name, image and likeness of the most recognized person on the planet, that's the most important thing to have," Sillerman said.

"When we created CKX and came up with the idea for it, we came up with three things that we thought had the greatest impact on American culture," Sillerman said. He has now acquired all three: Presley, American Idol and Ali.

Marketers said CKX could stand to reap a fortune in advertising and marketing deals with Ali. One of Ali's famous boxing opponents, George Foreman, has been successful as a celebrity product endorser. (His George Foreman grills became so popular that the company manufacturing them, Salton, decided to buy Foreman out for $137.5-million in 1999 rather than keep paying him royalties from sales.)

Sillerman, a self-made media billionaire, last year paid more than $100-million for an 85 percent stake in and control of Elvis' Presley's name and likeness (but not his music). Last month, he said he plans to overhaul Graceland, Presley's Memphis home from 1957 until his death there, at 42, in 1977, from a run-down tourist attraction into a sparkling destination resort.

Elvis Presley Enterprises brought in about $40-million in annual revenues for the past five years. Sillerman says he thinks that, like Presley, Ali is an underused brand. In the past five years, Ali's name, image and likeness have generated about $7-million in revenue, CKX said in a filing with the Securities and Exchange Commission.

Sillerman eventually plans to demolish the Heartbreak Hotel, which stands across the street from Graceland, and put two 400-room hotels in its place. The complex is to include restaurants, shops, convention space, an entertainment complex, an outdoor amphitheater and a spa. He plans to open a museum exhibit and Elvis theme show in Las Vegas.

CKX, Sillerman's entertainment company (the letters stand for "content is king") says it has warehouses groaning with 600,000 pieces of Elvisiana, including a barber chair from Graceland, a jukebox from his home in Palm Springs, Calif., and movie contracts he signed.

Sillerman is keeping mum on whether his plan for Ali is as sweeping as his Presley strategy, but the parallel of both men is clear.

"You don't need to introduce who he is," Sillerman said, "And you don't need to explain who he is."

Whatever his company does will be "respectful, methodical and impactful," he said. "It is not our plan to involve him in any way personally," Sillerman said of Ali, who is suffering from Parkinson's disease.

Dan Migala, publisher of the Migala Report, a Chicago sports marketing trade publication, said Ali is one of the most commercially underused figures in sports.

"There are sports endorsers, and then there's the next level, which is really cultural endorsers," Migala said. "He's more of a cultural icon than a sports icon, which makes him much more attractive to advertisers."

Ali's name is licensed to Adidas and video game maker Electronic Arts.

Because CKX owns the American Idol franchise, the company has a ready supply of musicians who could perform at Sillerman's planned amphitheater near Graceland.

Sillerman made his fortune by building and selling a chain of radio stations and a concert-promotion business. In 1998, he sold his SFX Broadcasting, including 71 radio stations, to investors Hicks Muse for $2.1-billion. Two years later, he sold rock promoter SFX Entertainment for $4.4-billion to Clear Channel Communications.

And as for the "X" in Robert F.X. Sillerman, he declines to reveal what it stands for.

[Last modified April 14, 2006, 21:54:02]