The company behind one of the most popular television shows in American history has filed for Chapter 11 bankruptcy. Core Media Group, the company responsible for American Idol and So You Think You Can Dance has listed $73 million in assets and $512 million in liabilities.
American Idol boomed in popularity 10 years ago, reaching 30 million viewers per episode. Just to give you an idea of how many people that is, the population of the United States 10 years ago stood at almost 300,000,000. This means roughly 10 percent of the nation regularly watched American Idol! So where did it all go wrong for Core Media Group?
Television shows do not stay popular forever. Other reality television shows, events and sitcoms unseated American Idol over the past decade. By March of 2016, during its final show, American Idol only attracted 13.3 million viewers. The downward spiral in popularity cut into the pockets of Core Media Group and put them into a precarious financial situation.
In 2014, the company’s revenue declined by $15 million, followed by $35.6 million last year. As profits declined, Core Media Group had greater difficulty paying its debts. Core Media Group lists Goldman Sachs, CBS Broadcasting and Sony Music Entertainment among its creditors.
How Will Core Media Group Benefit from Chapter 11 Bankruptcy?
By filing for Chapter 11 bankruptcy, Core Media Group can restructure its debts and stay in business while it figures out how to become profitable again. Chapter 11 bankruptcy can give executives at Core Media Group a second chance to brainstorm new television shows or other sources of revenue. Depending on its situation, the company may be granted reduced payments on debts and improved cash flow.
Although Core Media Group is a wealthy and powerful business, much smaller companies can also take advantage of the protections afforded by Chapter 11 bankruptcy.
The Kansas City bankruptcy attorneys at The Sader Law Firm can help businesses file for Chapter 11 bankruptcy.