NEW YORK - Through the deal-crazed 1990s, entertainment mogul Robert F.X. Sillerman and his investment bankers, Bear Stearns and Lehman Brothers, made beautiful music together--for themselves and their investors. Those days may now be gone.

Sillerman bought and sold five public companies, raising $5 billion of capital and earning hundreds of millions of dollars for himself as well as hefty fees for his bankers. His flurry of deal making climaxed in March 2000, when he sold SFX Entertainment--an amalgamation of music and sports properties--to Clear Channel Communications (nyse: CCU - news - people) for $4.4 billion.

Sillerman brought the band back together this week but with far less impressive results.

Bear Stearns (nyse: BSC - news - people ) and Lehman (nyse: LEH - news - people ) underwrote a stock offering of Sillerman's latest venture, CKX Entertainment (nyse: CKXE - news - people ). On Wednesday, CKX raised $200 million, selling 20 million shares at $11 a share--a steep 55% discount from the company's original plan first announced in April to sell 13 million shares at $24 to raise $300 million. CKX found some support after the offering, closing yesterday at $13.78. On Friday, it shed another 88 cents to $12.90 in mid-day trading.

CKX, with the "CK" standing for "content is king," the "X" being Sillerman's trademark, was formed in February after he acquired control of a public shell company and spent $270 million buying two high-profile media properties: a majority interest in the rights to the name, image and likeness of Elvis Presley (see also: "Special report: Top-Earning Dead Celebrities" and "Elvis Presley"); and global ownership rights to the smash-hit TV show American Idol--both trumpeted in the glossy offering prospectus to investors.

What is particularly striking about the offering is where the proceeds are going. Bear Stearns had an incentive to get the deal done beyond satisfying its important client Sillerman. Of the $200 million net proceeds raised, $150 million is being used to repay Bear Stearns for loans it made to CKX. With $35 million being used to satisfy a portion of the purchase price for the American Idol properties, this leaves a paltry $15 million for CKX to do more entertainment acquisitions, as Sillerman reportedly plans.

Indeed, in March, CKX authorized the issuance of up to 275 million shares (it currently has 88.5 million shares outstanding). This gives them the ability to go back to investors and raise more equity to buy more properties. And since the current offering has wiped out the company's debt, it may also tap the fixed income markets again.

Recognizing the conflicts inherent in an investment bank underwriting an offering and receiving a substantial portion of the deal's proceeds, the National Association of Securities Dealers requires that if an underwriter receives more than 10% of a deal (in this case it's 75%), there must be a "qualified independent" bank acting as co-underwriter. That role was awarded to Lehman, a firm with a longtime relationship with Sillerman and his companies. Among other deals, Lehman advised SFX in its sale to Clear Channel. Joining the syndicate was a low-risk proposition for Lehman: Bear Stearns has indemnified them against liabilities in connection with its underwriting role.

A spokesman for CKX declined to comment. Bear Stearns failed to return several calls seeking comment.

"This offering appears to be nothing more than a sweetheart deal for Bear Stearns," says Jacob Zamansky, a lawyer who represents individual investors. "One hopes their brokers disclosed the various conflicts and financial data rather than just hype the Elvis and American Idol assets."

Sillerman's advisers had further incentives in place. A Bear Stearns senior managing director--unnamed in the prospectus--owns 500,000 shares of CKX. An unnamed senior partner of Greenberg Traurig, the law firm advising on the offering, also owns 375,000 shares.

On top of the unseemly conflicts, CKX's financials aren't pretty either. Even at the $11 deal price the company's market capitalization is $920 million, over three times what CKX paid just three months ago for the Elvis and American Idol assets. Buyers of the deal put up 67% of the price paid by all purchasers of the company, yet only own 23% of CKX stock post-offering. (Sillerman still owns 37% of the company.) The company has a negative tangible book value and its pro forma financials show it earned only $1 million in 2004.

Even the long-term viability of the assets is questionable: the ability to monetize Elvis could dissipate over time and it's debatable whether American Idol has really entered "the permanent fabric of our culture," as Sillerman reportedly said, or is just another video fad. After all, whatever happened to Who Wants to Be a Millionaire?

While Sillerman struggles to build his next media empire, Clear Channel has coincidentally announced a spin-off of Sillerman's last rollup--SFX Entertainment. In jettisoning Clear Channel Entertainment (formerly SFX), the radio broadcaster is tacitly acknowledging that acquisition's failure. While the valuation to be placed on the old SFX assets when they're spun off is unknown, Clear Channel has already written down 75% of the acquisition's value.

With Wall Street valuations having come back to earth, impresarios like Sillerman are finding it more difficult to raise money in the public markets. Witness billionaire Edgar Bronfman Jr., whose Warner Music Group (nyse: WMG - news - people ) public offering flopped last month. Or dealmaker Bruce Wasserstein, whose IPO of investment bank Lazard Freres hit the market like a lead balloon in May. Lazard and its underwriter Goldman Sachs (nyse: GS - news - people ) are now facing a flurry of shareholder suits over the failed offering.

Investors, today, are far more discerning than they were five years ago, says Seth Lipner, a securities lawyer at Deutsch & Lipner. "Back in the '90s no one noticed or cared about the fine print in these offerings," he says. "Today, many investors are taking a harder look at these lousy deals and deciding to stay away." ay, are far more discerning than they were five years ago, says Seth Lipner, a securities lawyer at Deutsch & Lipner. "Back in the '90s no one noticed or cared about the fine print in these offerings," he says. "Today, many investors are taking a harder look at these lousy deals and deciding to stay away."