Core Media Group decides to file for Chapter 11 Bankruptcy Protection

Core Media Group decides to file for Chapter 11 Bankruptcy Protection

It was recently announced that Core Media Group, the company that produces “American Idol” and “So You Think You Can Dance,” had filed for Chapter 11 bankruptcy protection. According to the New York Times, the company cited low ratings for “American Idol,” its flagship franchise, in its decision to file for bankruptcy protection.

“American Idol” recently ended its 14-year run after its ratings began to decline significantly from 30 million viewers in 2006 to only 13.3 million this year. With its ratings drop, the show failed to maintain its financial performance as well, which led to the Fox Network cancelling the show this year.

In its court documents, the company also stated that its advertising revenues had fallen due to major sponsors such as Coca-Cola and AT&T pulling out of the show. American Idol also saw a precipitous drop in its re-broadcast fees as the result of a significant reduction in airtime with its initial collapse in ratings.

As a result of these recent financial struggles, American Idol lost $35.6 million in 2015, compared to 2014. This was particularly problematic because the show had dropped $15 million in 2014 versus 2013.

According to its bankruptcy petition, the company listed $73 million in assets and $512 million in liabilities, including $398 million owed for loans and back payments to former employees and investors. In turn, $400 million of the company’s debt belongs to two loans made by secured creditors, which included $209 million in a senior loan debt provided by Tennenbaum Capital Partners LLC, Bayside Capital Inc. and Hudson Bay Capital Management LP as well as a $189 million second-lien loan debt to Crestview Media Investors LP, according to a Variety report cited by Reality TV World. The bankruptcy papers also listed Sony Music Entertainment and CBS as debtholders.

Are you a creditor in a bankruptcy?  Have you been sued by a bankrupt?  If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.

For more posts dealing with media companies filing for Bankruptcy, check out:

• SFX Entertainment Inc. Files for Chapter 11 Bankruptcy Protection
• Freedom Communications Inc files for Chapter 11 Bankruptcy Protection
• Caesars Reaches Restructuring Deal with Senior Lenders