WHEN Simon Cowell was a boy he used to peek over the fence to his next door neighbour in Elstree and spy on some of the most glamorous movie stars in the business. The family house where Cowell was raised backed on to the home of the head of MGM film studios, who regularly threw a string of Gatsby-inspired parties with guests such as Liz Taylor, Richard Burton and Gregory Peck.
This week the creator of Britain's Got Talent, X Factor and American Idol will take another step towards his childhood dream of playing impresario to Hollywood's A-list stars when he sits down with retail giant Sir Philip Green to finalise plans for
an international entertainment company which they hope will become bigger than Disney.
Sources close to the two men say discussions are at an advanced stage to create a show business company that will handle everything from the creation and production of new show formats to talent management and merchandising. The move could lead to Cowell and Green selling everything from Susan Boyle puppets, mugs and duvet covers to launching X Factor shops on the high street. In financial terms it will establish Sir Philip, who is Britain's ninth richest person with a fortune estimated at more than £4 billion, as a global figure, straddling retail and show business. For Cowell, who in the early 1990s lost everything on a bad investment, it will pitch him against some of Hollywood's largest moguls taking on a slew of US entertainment corporations in their own backyard.
"They are talking about making profits running into billions as opposed to millions from their joint venture," said someone who knows them both. At present, X Factor and Britain's Got Talent sell to 30 countries. The two see scope for selling to far more and for rolling out new programme strands.
According to a friend of Cowell, with all his contracts up for renewal, he is eager to develop his own content. "He will be on stage, and a producer, and develop ideas internationally," said his friend. For Green, analysts say it is a chance to "back a friend" whom he trusts implicitly.
One analyst said: "Philip is very commercial and has been a friend of Simon Cowell's for some time. He enjoys being associated with glamorous people and glamorous things and I suspect there is an element of that. But he is a guy who trusts people and if he likes your idea he will put money your way."
The move is just one of a number of high profile British ventures that are attempting to conquer America. In April Green launched Topshop on Broadway, which will be followed later this summer by the New York opening of fashionable London restaurant Le Caprice, a bar by the founders of Piccadilly's The Wolseley, and a string of boutique hotels. But as Green and Cowell attempt to capitalise on the "Brit bounce" – the popularity of British brands in the US and the increasingly high profile of British celebrities – analysts are asking what this means for the world of TV and light entertainment. Can Cowell and Green reshape the broadcasting landscape?
"They're thinking in terms of a new Disney," said a source close to them both. "What they're planning really is that big."
The move is a significant departure for Green, who has made his fortune firmly in the retail sector. In 1985 he bought a small jeans company, Jean Jeanie, for £165,000 which he sold one year later for almost £9m. A series of similarly successful deals followed, and in 2000 he bought Bhs. In 2002 he added Arcadia, which gave him Topshop, Dorothy Perkins and Miss Selfridge. Arcadia now has a sizeable chunk of Britain's retail cake owning Bhs, Topshop, Topman, Burton, Miss Selfridge, Wallis, Evans and Dorothy Perkins. Furthermore up until now Green has steered clear of diversifying away from retail. Those that know him say he understands his shortcomings. He hasn't followed his fellow billionaires into football or gone into entertainment.
"There will be some advertising around the events," said one retail analyst. "Philip knows his shortcomings. For instance he doesn't invest very much in stocks and shares because he knows it is outside his skills set. But he is a fantastic retailer and he is very tuned in. He knows the brands are important and having lots of younger and different brands in the store. But I think he might do a tie-in. Top Shop is going well and from what I understand he is looking to open up another couple of stores."
One clue to Green's enthusiasm for the deal lies in the opportunity to merchandise and build his fashion brands using new media. With advertising, marketing, digital communication and the internet all converging, the traditional retail model is having to adapt to these forces.
One company that is embracing this change is Fashion Rocks, a showcase event that pairs the biggest names in fashion with top music artists to raise money for charity. The inaugural event was staged at Royal Albert Hall in 2003 and was followed in Monte Carlo in 2005. Fashion Rocks 2007 returned to the Royal Albert Hall and was hosted by Uma Thurman and Samuel L Jackson, pairing some of the best names in fashion and show business such as Timberland for Dolce & Gabbana, Beyonce for Armani, Robbie Williams for Versace, and Mariah Carey for Versace. Analysts say it is this model that Cowell and Green are looking to roll out across America.
"Green will know that he has to keep his brands right up there in the public eye. With traditional forms of advertising falling away, live events are one way in which he can leverage his brands towards a global audience."
For Cowell it is a chance to gain ownership of a product he regards as very much his own. America's Got Talent and American Idol have been huge. American Idol is already the most successful format in US TV history for the Fox network. It is the most watched programme on US television with more than 27 million viewers for each episode and annual advertising revenues of around $900m. Sources credit Cowell with being a "genius behind the camera as well as in front of it." He does everything from editing the programmes, to choosing the right revenue and camera angle. Given this level of involvement it is not surprising that he wants ownership.
Presently he is paid £22m a season as a judge on American Idol but he doesn't get a share in the profits, which go to Simon Fuller's company 19. Similarly, while Cowell spearheads Syco, which co-produces The X Factor and Got Talent and is also a record label for reality stars such as Leona Lewis, it is effectively a division of Sony BMG. So though he is paid a salary by Sony BMG and ITV he does not earn anything from the content or music sales.
But there are a number of hurdles to leap before the deal materialises. Sources say the pair are apparently not set on securing Cowell's three existing shows for the yet-to-be-named company.
Then there is the small matter of the toughest advertising market for eight years. Last year, the "big five" networks in America: NBC, CBS, Disney's ABC, and Fox, owned by Rupert Murdoch's News Corporation brought in £6.3bn from pre-selling slots in their autumn and winter commercial breaks.
Analysts argue the recession could reduce that number by up to 15 per cent this year which in turn could put downward pressure on the budgets for new programmes in future years.
Whatever the outcome for Cowell and Green, who often holiday together at the Caribbean's exclusive Sandy Lane resort, it is the chance to crack America.
Walt Disney used to talk about making your dreams come true. One suspects Cowell was listening.
