Awards shows thrust Dick Clark company into spotlight

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Posted: Monday, January 13, 2014 12:00 am

LOS ANGELES — For decades, Dick Clark Productions trundled along on television’s periphery, making a living by reheating chestnuts like “New Year’s Rockin’ Eve” and the American Music Awards.

But this small, musty company, founded 57 years ago with “American Bandstand,” now finds itself in one of Hollywood’s hottest corners. Networks these days crave event television, and, increasingly, Dick Clark’s live, star-studded spectacles are delivering it.

The Golden Globe Awards, which returned Sunday night, was the first of 14 major shows Dick Clark Productions will deliver this year — four of them new, including the People Magazine Awards. (Yes, there will be a trophy for Sexiest Man Alive.) Moreover, ratings for its older shows are soaring. About 13 million people watched the American Music Awards in November, a 30 percent increase compared with the year earlier. The company has even found a way to resurrect “American Bandstand.”

“There is no way around it,” said Allen Shapiro, chief executive of Dick Clark Productions. “We have something spectacular going here.”

The company’s unlikely comeback is attributable to new private equity owners and one of the oldest saws in show business: Be in the right place at the right time.

“We took a look at the massive appreciation of TV rights for sports,” said Shapiro, who joined with two other investors to buy the company in September 2012. “The money, we decided, would eventually have to flow beyond sports to other live events. With Dick Clark, we would be in a prime spot to build off that.”

Networks are leaning more heavily on live programming in a desperate campaign to outwit the dreaded DVR. Along with sports, awards are a rare opportunity to attract a real-time audience. These can be lumbering telecasts, but their big-tent nature also fits neatly with the networks’ biggest remaining strength: vast reach.

Advertisers spent roughly $500 million on envelope-opening shows and live nonsports events last year, a 25 percent increase compared with five years ago, analysts estimated. “As bright spots in television go, this has to be one of the biggest,” said Harold L. Vogel, author of “Entertainment Industry Economics.”

A changing music business has also helped awards shows. With album sales continuing to dwindle, tours are now where the money is, and a lavish performance on a show like the Billboard Music Awards (another Dick Clark property) can sell tickets. Viewers also cascade onto iTunes after awards performances.

So stars like Katy Perry and Miley Cyrus are lining up to appear as never before. After the last American Music Awards, Shapiro said, “We almost had too many big artists — it was gridlock.” That program showcased acts like Rihanna, Lady Gaga, Justin Timberlake, Perry, Cyrus and the boy band One Direction.

The rise of social networks, especially Twitter, has also buoyed awards telecasts. Watching can become a communal experience, with viewers across time zones commenting on Taylor Swift’s outfit or cheering a joke told by Tina Fey. The American Music Awards alone generated 7.6 million posts on Twitter, according to Nielsen.

Shapiro, 66, has run the company before. He left in 2007 when it was sold for about $175 million to RedZone Capital Management, a private equity firm.

But Shapiro saw a path back two years ago, courtesy of Peter Guber, the former chairman of Sony Pictures Entertainment and a friend. Guber, with the private equity firm Guggenheim Partners, knew RedZone was looking to sell Dick Clark. What if Guber and Shapiro joined with Guggenheim to try to buy the company?

They won a bidding war by paying about $350 million.

Dick Clark Productions, which has only 50 full-time employees, needs to grow quickly to make that investment pay off, and some big challenges remain.

Ratings drooped for the most recent “Dick Clark’s New Year’s Rockin’ Eve With Ryan Seacrest,” as that ball-drop telecast is now known. The ratings for the Miss USA and Miss Universe pageants have seesawed.

Their bet is not just about awards. Dick Clark Productions views itself as a major producer of reality shows. One of the company’s programs, “So You Think You Can Dance,” has been a hit on Fox, and Shapiro recently signed a deal with Keshet, an Israeli TV company, to bring a talent show called “Rising Star” to ABC.

Michael Mahan, president of Dick Clark, has also been working on its underdeveloped assets — starting with all those old Brylcreemed episodes of “American Bandstand.” For years, the library has largely sat dormant, tied up in a tangle of rights issues; Dick Clark Productions does not own continuing TV rights to the songs, for instance.

Now, Mahan said, “Look for American Bandstand to relaunch on the radio in the very near future,” although he declined to share details.

Dick Clark Productions does not disclose financial information, but bidders in the 2012 sale said the company had annual earnings at that time of roughly $35 million.

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