Elvis Presley is in play.
CKx Inc., owner of the "American Idol" television program and 85 percent of Elvis Presley Enterprises, is mulling at least two offers to buy the company. At the same time, thousands of Elvis fans have descended on Memphis for Elvis Week, the annual commemoration of the American music icon’s life and death.
CKx owns rights to the name, image and likeness of Elvis Presley and the operations of Graceland, Presley’s Memphis mansion. While the "American Idol" franchise is the company’s main money maker, the Elvis brand is still an earner. Elvis, who died in 1977, generated more than $60 million last year in revenue from royalties, licensing and Graceland’s operations.
Two faces familiar to CKx have offered to buy it: Robert Sillerman, the company’s former CEO, and Simon Fuller, the British media mogul who created the "Idol" franchise before selling his company, 19 Entertainment, to CKx in 2005. Sillerman’s offer, made public Wednesday, values the company at between $512 million and $535 million.
In an SEC filing, Sillerman said he plans to offer between $5.50 and $5.75 per share for at least another 30 percent worth of CKx on top of the 21 percent he already holds.
A sale is not expected to significantly affect the Elvis business, which grew 10 percent in 2009 compared with the year before.
"There is upside and growth to Elvis, and I think anybody who would buy it is someone who’s going to come in and believe they can take it to the next level," CKx CEO Michael G. Ferrel said.
Elvis Presley Enterprises currently has 260 licensees, including SiriusXM, American Greetings and Mattel. Last year’s revenue from licensing and royalties rose 34 percent compared with 2008.
Interest in Elvis remains strong, and the brand is constantly being refreshed. For example, "Viva Elvis," a live Cirque du Soleil show based on the icon’s life, has been a hit in Las Vegas since opening in February.
More than 400 theaters nationwide showed the remastered film "Elvis on Tour: 75th Anniversary Celebration" on July 29. Elvis remains highly visible on the Internet, with a Facebook fan page boasting 1 million fans and a website that gets an average of 700,000 unique visitors a month, according to Jack Soden, president and CEO of Elvis Presley Enterprises.
The Elvis marketing machine seeks to attract younger consumers without abandoning its core audience of people 45 and above. Marketers are relying on fans who never saw in person the youthful, thin Elvis, or even the older, chubby Elvis to keep interest alive.
Elvis’ music is still the cornerstone of his success and the future of the brand. Recently, a Nike soccer advertisement featuring the Elvis ditty "A Little Less Conversation" struck a chord with the 18-to-34 demographic in Britain, a sign that the company’s strategy to reach out to younger consumers is working, Ferrel said.
"You don’t have to reinvent (Elvis), change him into something that he wasn’t, in the belief that he will be more relevant in today’s culture," Soden said.
Attendance was 542,728 last year at Graceland, the Memphis tourist attraction that features a tour of Elvis’ home and grave. Revenues were down about 2 percent, partly due to lower e-commerce revenue and a slight decrease in per-visitor spending, according to documents filed with the Securities and Exchange Commission.
So far this year, attendance is down 6 percent compared with 2009, with the Gulf oil disaster discouraging tourists who would have stopped in Memphis on the way to beach destinations or New Orleans, Soden said.
Tough economic conditions in the past two years, including a dearth of financing for construction and development, have delayed a study looking at updating the Graceland attraction.
The review, which Ferrel said is roughly half-done, is looking at modernizing Graceland and redeveloping the area surrounding it without touching the 13 acres where the home and grave sit.
As the future of Graceland is mapped out, CKx is fielding offers.
CKx said in March it was in talks to sell the company after The Wall Street Journal reported CKx was close to selling itself to the private equity firm One Equity Partners.
Then, in May, the company said it received an acquisition offer from a group of investors led by Fuller.
About a month later, CKx said it heard from an undisclosed third party interested in purchasing a minority stake. CKx said the potential investor was in talks with Sillerman, the company’s former chief executive, about joining the bid.
In response to that offer, CKx adopted a shareholder rights plan — also known as a "poison pill" — meant to thwart hostile takeovers and protect shareholders.