Simon Cowell’s entertainment company has sold $125 million of bonds backed by the “Got Talent” televised talent shows, in what the arranger of the debt said is the first securitization of royalties from a reality television program.
Cowell’s Syco Entertainment worked with White Oak Merchant Partners, a brokerage, on the transaction, White Oak said in a statement. The securities were sold privately.
The transaction could serve as a blueprint for other owners of media properties that are looking to borrow, said Freddy Boom, head of structured finance at White Oak Merchant Partners, in an interview.
“It’s a way to finance them without selling the rights, which may go up in value,” Boom said.
Syco’s asset-backeds are similar to music royalty transactions, as the collateral can include cash flows from the rights as well as the intellectual property value of the franchise, Boom said. Music royalty asset-backeds have been around for decades. This year, KKR Credit Advisors and Hipgnosis Song Management have sold such bonds.
Simon Cowell signed boy bands including Westlife and Five relatively early in his career. But he met with some of his most lucrative success in the aughties with shows like American Idol and Britain’s Got Talent, where he gained reknown for his acerbic criticism of contestants. His shows have generated strong ratings for years. Syco, which is fully owned by Cowell after purchasing Sony’s stake in the company, also owns the X Factor brand.
White Oak Merchant Partners is a unit of White Oak Global Advisors, a lender whose chief executive officer is Andre Hakkak. The parent firm has lent more than $10 billion since its founding in 2007.
This article was provided by Bloomberg News.