Core lowered after American Idol cancellation

American-Idol-Disney-attraction-2Moody’s analysts have downgraded Core Media Group, citing the end of American Idol and slower than expected development of new shows.

American Idol has been cancelled by Fox (after the 2016 season), leaving the prodco reliant on So You Think You Can Dance and international revenue from the Idol format, Moody’s said .

The credit ratings specialist said the company does have about US$80 million of cash on hand, but has not moved to successfully develop new shows to fill the Idol gap, or to replace the profits generated by the sale of Elvis Presley Enterprises and Muhammad Ali Enterprises.

“The cash balance has not been used to acquire EBITDA producing assets to offset the EBITDA lost following the Elvis sale and development of new programming content has been slower than expected,” Moody’s noted.

It added: “Following the 2016 season of Idol, the company will be reliant on its So You Think You Can
Dance, international Idol format revenue and its Sharp Entertainment division for earnings, which will increase the unsustainability of its capital structure with debt that starts to mature in June 2017.”

The downgrade followed Core missing an interest payment on a US$160 million loan. It has a 30-day grace period to make the payment. Ratings agency Standard & Poor’s also lowered its rating on Core.