Paul Davidson

USA TODAY

The production company behind American Idol and So You Think You Can Dance, Core Media Group, has filed for bankruptcy protection, citing Idol’s falling ratings and money it owes creditors such as show creator Simon Fuller, among other factors.

Fuller, the company’s top unsecured creditor, is owed $3.37 million, according to the Chapter 11 filing. Core says it owes a total of about $420 million to third parties, including Sony Music Entertainment and CBS.

“Despite its long-running success, however, the company has recently experienced deterioration in its financial performance, primarily attributable to the decline in ratings for American Idol and the corresponding decline in revenues from IDOLS- related broadcast fees, international tape sales for rebroadcasts, touring fees, sponsorships and IDOLS- related merchandise sales,” according to a declaration by Core President Peter Hurwitz in support of the filing.

He called the company's capital structure unsustainable and cited its inability to replace the Idol revenue stream or reach an out-of-court debt restructuring with creditors.

In 2014, earnings from Idol fell $15 million, and the decline intensified in 2015 as a drop in airtime to 42 hours from 56.5 hours led to lower premium production fees and forced the company to spread fixed costs over fewer production hours, Hurwitz said in the filing. Total revenue from Idol and other shows dropped $35.6 million in the first half of 2015 from the year-ago period.

Other "negative ripple effects" included a decline in rebroadcast fees due to the reduced hours, the loss of Coke and AT&T as main sponsors, and the shutdown of the "American Idol Experience" theme park attraction at Walt Disney World.

In a statement, Core said it "remains firmly committed to our mission as a global content and management company producing award-winning programming."