The producers of what was once the most popular TV show in the U.S., American Idol, filed for bankruptcy in New York, drawing the curtain on the 15-year run of a phenomenon that allowed viewers to choose which aspiring entertainers would fulfill their dreams and which would be consigned to obscurity.
Core Entertainment and nearly 50 affiliated companies, from All Girl Productions to Clown Car Productions, sought court protection from creditors owed almost $400 million.
The company had been trying to rebuild its once-dominant position in the reality-TV world with a series of deals. "The company's new content development and production efforts have not been profitable," Core Entertainment President Peter Hurwitz said in court papers.
American Idol spawned the careers of Kelly Clarkson, Carrie Underwood and Chris Daughtry and made announcer Ryan Seacrest and brutally honest judge Simon Cowell household names.
It was once so popular that the Fox network broadcast it twice a week. It was the No. 1 program on U.S. television a record eight straight years, boosting the Fox network to ratings victories.
But the show was averaging 11.5 million viewers a night this year, according to Nielsen data. At its 2006 peak, "Idol" drew 30.3 million people nightly to watch would-be singing stars, some inspiring and some awful, compete for a recording contract.
Like many successful U.S. TV series, Idol was an import from Britain. Core said the final push into bankruptcy came from a dispute with the show's creator, Simon Fuller.
On April 11, Fuller threatened to push Core into bankruptcy in Britain unless the company immediately paid him nearly $3 million, according to court papers filed in New York.
From the moment Idol began in 2001 in Britain as a singing competition, it enjoyed record ratings and ushered in an explosion of copy-cat shows. Ultimately it was overtaken by NBC's "The Voice" and YouTube's panoply of online performers.
But with slumping ratings came a decrease in licensing fees from the Fox network, the company said in court documents.
Core merged with Shine Group and Endemol NV in 2014, creating a global TV production juggernaut controlled by 21st Century Fox Inc. and Apollo Global Management. Core had agreed to pay $2 million annually under a services contract to Endemol, but defaulted on that deal last year when it failed to make the payment.
Core's $400 million debt includes a $209 million senior loan held by lenders including Tennenbaum Capital Partners, Bayside Capital and Hudson Bay Capital Management. The company also owes $189 million on a second-lien loan, most of which is held by Crestview Media Investors.
The filing will allow Core to cut debt, reorganize and "position the company for the future, allowing for more flexibility and a platform for growth," Core said in a statement.
Idol also profited through its control of recording and performing contracts with its contestants. Since last year, the company has been trying to negotiate a deal with the lenders.
U.S. TV networks are feeling the pinch of competition from online media like Netflix and Amazon.com. Viewership is down for many popular shows, and viewership is at the heart of networks' two revenue sources: advertising and the subscribers fees they get from pay-TV providers.