Barbados at Christmas. Sir Philip Green, the billionaire owner of BHS and many
other stores, and Simon Cowell, the highest-paid television star in the
country, were having a cup of tea on the beach. Green, swanning around in
bright green trunks, told Cowell: “You need to manage your time better.
You’re doing too much.”
Cowell, looking decidedly relaxed with a deep tan and shades, flashed a
star-bright smile and enjoyed the sunshine. Then he sprang a surprise: “All
my contracts are coming to an end soon,” he mused. “I’ve got to figure out
what to do next. And I’d value your advice.”
So began Project X, an ambitious melding of Green’s business skills and
Cowell’s creative talent to forge a media and merchandising company to take
on the world as “the new Disney”. Their new joint venture - news of which
leaked last week - will be registered and its name revealed in the next few
weeks.
Though Cowell has talked publicly of his admiration for Green’s business
acumen, describing him as “the person I respect more than anyone in the
world”, nobody expected them to join forces.
It will be the first time Green has dipped his toe into the world of show
business, having made his fortune from retailing, running Topshop, Topman,
Miss Selfridge, Dorothy Perkins, Wallis, Evans and Burton, among other
chains. Outside music, this will be the first time that Cowell has
experimented with high-street retailing.
Can two of the most competitive players, with the biggest egos, work together?
One associate of the pair said: “They’re not waiting for the new firm to be
registered. Philip is running Simon’s business now.”
Cowell, 49, and Green, 57, began to push ahead with their plans last month at
a meeting at Cowell’s US base – a new £15m home in Beverly Hills. “Philip
flew in for a few days and stayed at the house. He met all Simon’s business
people, talked about the future,” said an executive who attended the final
meeting. “Simon said to Philip: ‘Right, you run the business and free me up
to run a record label and produce TV shows’.”
The two agreed to team up because Cowell wants more control over his creations
and believes Green is the man to get it for him. Over their cup of tea in
Barbados, he told Green: “When I look at my diary, I can tell you for the
next 18 months where I will be every day. That depresses me. It’s like I
can’t escape. I want to own myself.”
Since he is the star of The X Factor, Britain’s Got Talent and American Idol,
many people assume Cowell owns the shows. In fact, the programmes and the
stars they create are owned by Cowell’s various partners, which include the
SonyBMG music label, and television producer Fremantle. A firm called 19
Management, run by Simon Fuller, the creator of the Spice Girls, owns the
rights to American Idol with Fremantle.
Cowell makes his money through agreements between his company, Syco, and those
partners. Those agreements are up for renewal in the next 18 months, and
Green is negotiating new deals on behalf of the joint venture.
Under the new arrangements, Cowell will concentrate on developing, presenting
and producing new shows, and will sign the artists that emerge from them to
the new company’s record label. SonyBMG is expected to continue distributing
recordings, while Green will oversee the finances and strategy, and
spearhead merchandising.
The company will own the new television formats it develops. The rights to The
X Factor and Got Talent franchises will be looked at closely. It cannot buy
the rights to American Idol because they are owned by 19 Management, which
does not want to sell.
However, a source said a new, exclusive deal is being negotiated to enable
Cowell to continue to appear on American Idol. It is rumoured to be the
biggest television deal ever, eclipsing that of Oprah Win-frey, who pulls in
more than $200m a year.
The company will have a production arm that will make the new shows, possibly
in its own studios in London and Los Ange-les. It will license the shows to
broadcasters, such as ITV here and Fox in the US. There will be a film
division as well as a recording division.
The new firm will own the merchandising rights to its shows and stars. Green
plans to produce and sell everything from T-shirts to mobile-phone
ringtones. Put simply, Green and Cowell want to build the most powerful
talent-scouting outfit the world has seen, and have the full rights to
market and promote the stars they find across the small and big screens, the
internet and the airwaves.
One industry figure describes it as “the ultimate licence to print money, and
a kind of
tal-ent-house-meets-television-company-meets-record-label-meets-movie-studio”.
Green and Cowell are certainly thinking big. Already on the drawing board are
plans for a Fame-style film, but set on a talent show rather than in a
talent college.
There is a deal in the offing for videogames and Florida theme parks, based on
the new television shows. The pair are negotiating to sell content to new
media providers, such as smartphone companies and telephone networks.
“Once your mobile phone becomes your television screen, you’ve got billions of
consumers who want content,” Cowell told friends. “I’m never going to want
to own Nokia, but I know what Nokia are going to want to buy.”
Cowell is also working on ways to exploit the revenue-raising potential of
video-file sharing sites such as YouTube. He was frustrated that, although
clips of Susan Boyle, the star of the most recent Britain’s Got Talent, were
viewed millions of times on YouTube, Got Talent did not make a penny either
directly or from advertising on the site.
THE joint venture is – at least on paper - an unlikely partnership. Green and
Cowell come from very different backgrounds. Cowell was brought up in
Elstree, a middle-class district on the edge of London. Green was born
“sarf” of the river Thames in less-well-heeled Croydon.
The two men have different personal styles. Off-screen, Cowell is courteous,
polite and softly spoken. Green is loud, brash and swears a lot. He once
confronted the Marks & Spencer boss, Sir Stuart Rose, grabbing him by
his suit-jacket lapels outside the retailer’s London headquarters during a
row over Green’s abortive bid to take over M&S.
On the other hand, Cowell is so vain that the American Idol judge Paula Abdul
jokes that his RayBan sunglasses are mirrored on the inside too, so he can
admire himself. Green wears expensive clothes - handmade Dunhill shirts and
Gianfranco Ferré suits - but is untroubled by his personal appearance, even
when standing next to the model Kate Moss, who designs a collection for
Topshop.
Dig a little deeper, though, and friends say the odd couple share many
qualities that might just make them the most potent force in modern popular
entertainment. They are self-made hustlers who love living off their wits,
Cowell chasing the latest acts, Green chasing the latest styles and deals.
In a world of celebrity egos, they lack pretence. “I know my comfort area,
which is why I get it right more than I get it wrong,” says Cowell.
They are frequent dining companions, often seen chatting outside Scott’s and
Cipri-ani in Mayfair, and they are self-confessed control freaks.
According to Piers Morgan, a judge of Cowell’s Britain’s Got Talent and
America’s Got Talent, Cowell sometimes calls and e-mails at 4am “to ask
things like: ‘Do you really think Bobby Badfingers should be in the final?’.”
Green famously inspects all the merchandise he sells and visits stores in the
small hours to check on stock. And they both have a sense of mischief. Green
delights in getting his daughter Chloe to tell Cowell to “pull his trousers
down” (Cowell is notorious for wearing high-waisted trousers). In return,
Cowell teases Green about his “moobs” (man boobs). Though good friends, they
can be fiercely competitive with each other.
On holiday in Barbados, mealtimes turn into a competitive ordering frenzy. At
New Year’s Eve at the Sandy Lane hotel, when Green chose the 12-course
“degustation” menu, Cowell went to the opposite extreme and had chicken pot
pie with mash.
Most important of all, each has made a fortune by keeping his finger on the
pulse of modern consumer culture, giving the public what they want before
they know they want it. With Topshop, Green brought in Moss to promote the
brand and has become the leader in “fast fashion” - rapidly changing styles
at high-street prices - which has become the most lucrative sector of the
£500 billion global fashion industry. His business model has been copied by
everyone from Primark to Giorgio Armani.
Cowell backs his musical hunches and is usually right. Sinitta, Zig & Zag,
Robson and Jerome, the Mighty Morphin Power Rangers, Westlife and Il Divo,
and artists from his television shows, such as Leona Lewis and Paul Potts,
have nothing in common musically.
Yet Cowell created them all and brought them to the market at precisely the
right time, shifting millions of CDs. And with shows such as The X Factor he
has become the most successful television producer in Europe.
At present the difference in their wealth is vast. Green is worth about £4
billion, Cowell a comparatively modest £150m. It is not clear yet how much
each will invest in the company, nor who will own the lion’s share of the
outfit.
As one analyst puts it, “The question is, what’s worth more: Cowell’s
creativity or Green’s business savvy?” But if they can make it work, it will
be a powerful combination.
“They have lots in common and have complementary talents,” says one senior
executive close to the deal. “Philip is brilliant at business,
merchandising, negotiating. Simon has the creative media nous. It’s a good
crossover.”
The ultimate arbiters, however, will be the public.Will the double X-Factor
pair fall out before they reach the final? Will they win the audience vote?
The Phil & Si Show - or Business Idol, as Cowell would surely call it -
may yet prove to be gripping entertainment.
