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January 19, 2010 2:00 am
Sony Music will today announce a five-year deal with Simon Cowell, ending months of uncertainty about the label's relationship with one of the music industry's most prolific generators of new acts.
The deal will see Sony swap 100 per cent ownership of Syco, the company that controls rights to acts such as Susan Boyle and Leona Lewis, for 50 per cent of a broader joint venture with Mr Cowell, according to a person familiar with the negotiations.
Talks between Sony and Mr Cowell were nearly derailed by friction between Sony executives and Sir Philip Green, the outspoken British retailer who is an adviser to Mr Cowell and an investor in Greenwell Entertainment, a venture set up last year to pool all of Mr Cowell's rights.
"Let me be crystal clear. The deal is with Simon Cowell," one person familiar with the negotiations said, confirming Sir Philip had been sidelined from the talks with Sir Howard Stringer, Sony's chairman, and Rolf Schmidt-Holtz, the former television executive who runs Sony Music and has worked with Mr Cowell since the launch of Pop Idol in the UK in 2001.
Sony will inject a sum of money into the new partnership with a company owned by Mr Cowell, who became the world's best-known talent scout through his role as a judge on the Idol television franchise.
The joint venture will produce a wider range of music, television, film and digital content, often with other Sony divisions.
The deal comes as Mr Cowell announced plans to leave American Idol next year after failing to agree a new contract with Simon Fuller, the programme's producer and creator, and launch a US version of X-Factor , a rival format he created and produces.
Susan Boyle, a contestant on Britain's Got Talent , was one of just two artists to sell more than 3m copies of an album in the US last year, and sold 8m copies worldwide in just six weeks.
Mr Cowell's deal with Sony comes as Mr Fuller announces plans for a new company after leaving CKX, the group that owns the American Idol format.
Mr Fuller owns 100 per cent of XIX, which has a provisional value of £100m ($163m) after he struck a deal with CKX giving it the right to buy up to 33 per cent of the company.
Under the terms of his deal with CKX, which paid $200m for Mr Fuller's 19 Entertainment in 2005, the entrepreneur behind the Spice Girls will continue to earn 10 per cent of all profits earned by American Idol .
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