Listen to (and share) episode 62 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s financial editor talks with host David Bloom about growing interest in some corners of Washington D.C. about crafting new communications policies for the Internet age; AMC’s best concession deal in decades with a stock deal for its customers; a report that suggests breaking up the pay-TV bundle would “devastate” consumers and the oligopoly that dominates the industry; and new government efforts to measure the economy that say the country’s creative industries generated $915 billion in 2011, and what that might mean for new policies for Hollywood.
The drama is not being renewed, making official its cancellation after one low-rated season. Low Winter Sun, which wrapped its 10-episode run in September, marks just the second AMC scripted drama not to receive a season-season order, following 2010′s Rubicon. The co-production between Endemol Studios and AMC Studios was based on the two-part 2006 British miniseries that starred Mark Strong, who reprised his role in the U.S. redo. Chris Mundy was written and executive produced by Chris Mundy. AMC liked what it saw originally, picking it up to pilot in May 2012 and ordering it to series that December. But after drawing 2.5 million viewers in its series premiere in August following the the first of Breaking Bad‘s final eight episodes, the ratings dropped off. Today’s news comes a couple of weeks after AMC renewed its Western drama Hell On Wheels for a fourth season and 13 episodes. It also has two new dramas in the works: Turn and Halt & Catch Fire.
This is unusual: The exhibition chain is telling members of its loyalty program today that a limited number of them, and other customers, can buy shares in AMC Entertainment without paying fees when it launches its $370M stock sale. “The price per share will be determined by negotiations between us and the underwriters of the IPO, but it will be the same price per share as offered to Wall Street investors,” CEO Gerry Lopez says in an email to Stubs members. (The price is key: The offer only makes sense if you think the stock’s value will appreciate after the IPO.) Customers who participate in the first-come-first-served effort will join employees who have a 24-hour head start on the general public.
Exhibition chains have done pretty well on Wall Street this year, so this planned stock offering may interest investors who want additional opportunities to bet on the industry. But the sale of 18.4M shares at between $18 and $20 a share won’t dramatically change AMC Entertainment — aside from putting it back under analysts’ microscopes. The No. 2 theater chain disclosed its IPO plan in August; today’s filing adds several details. It wants to trade on the New York stock Exchange under the symbol “AMC.” It expects to net $322.6M after paying underwriting expenses, and will use cash from the stock sale to retire some debt and for undefined “general corporate purposes.” It especially wants to ditch some 8.75% Senior Fixed Rate Notes that mature in 2019. AMC currently carries a lot of debt — about $2.2B — and warns that “if interest rates increase, we may be unable to meet our debt service obligations.” China’s Wanda Group, which paid more than $2.6B for AMC last year, will retain control. It’s selling Class A stock that entitles owners to one vote per share, and will keep the Class B stock with three votes per share. When the IPO is complete, Class A owners will control 7.8% of the votes while Class B holders have 92.2%.
Here’s the first trailer for AMC‘s upcoming Revolutionary War series Turn. Written by Craig Silverstein, based on the book Washington’s Spies and directed by Rupert Wyatt, Turn is set in the summer of 1778 and tells the story of New York farmer Abe Woodhull (Jamie Bell), who bands together with a group of childhood friends to form The Culper Ring, an unlikely group of spies who turn the tide in America’s fight for independence. Seth Numrich, Heather Lind, Meegan Warner, Kevin McNally, Burn Gorman, Angus MacFadyen, JJ Field, and Samuel Roukin also star. Turn is slated to debut in the spring.
AMC has given pilot orders to dramas Knifeman and Galyntine. Both will be produced by AMC Studios next year for consideration for series for 2015. The scripts for Knifeman and Galyntine, along with White City, had been heating up for a pickup at AMC over the past month, with Knifeman and Galyntine now joining AMC pilot Line Of Sight.
Inspired by the biography of John Hunter by Wendy Moore, “The Knife Man: Blood, Body Snatching And The Birth of Modern Surgery,” Knifeman is set in 18th Century London. It tells the story of a charming, arrogant, decorum-breaking genius who challenges societal norms to transform his visions into cutting-edge discoveries. A surgeon or “barber” in a time when blood-letting and praying was the norm, John Tattersal is a hard drinking, hard living man not afraid to push the boundaries of modern medicine, even if it takes digging up a few graves to do it. While he makes his living running an unlicensed operating theatre out of his residence, he picks up extra cash harvesting organs for his brother Julian, favorite son and prized physician of the St. Stephen’s teaching hospital.
Being sent to Saturday nights doesn’t necessarily mean a death sentence. AMC drama Hell On Wheels proved it with its recent third season and is now being picked up for a fourth, which will consist of 13 episodes vs. 10 for the series’ first three cycles. Hell On Wheels will return next summer with John Wirth, who took over the show after Season 2, back as executive producer/showrunner.
AMC opened a third night of original programming this past summer when it opted to move period Western Hell On Wheels from the network’s signature original programming Sunday lineup to Saturdays. Airing with a 15-hour compatible lead-in, as AMC airs Western features and shows all day long on Saturday, Hell On Wheels delivered 3.3 million viewers in Live+3 for Season 3, slightly higher than its Season 2 average on Sunday and doubling AMC’s Saturday night prime audience. “John Wirth and his team on both sides of the camera delivered a remarkable third season and Hell On Wheels fans responded,” said AMC president Charlie Collier. “AMC has served passionate Western fans for three decades, so it is particularly gratifying to see these viewers capping off their Saturdays with an original Western on what has historically been a tough night of the week for television.” HOW, from Entertainment One and Nomadic Pictures, is exec produced by Wirth, Mark Richard and Endemol Studios’ Gold, with eOne’s John Morayniss and …
The share price is down in pre-market trading following the disappointing Q3 earnings release which contrasts with the company’s performance last year – a quarter when it racked up legal expenses for a court fight with Dish Network which also had temporarily stopped airing AMC Networks channels. The programmer just reported net income of $58.1M, +58.6% vs the period last year, on revenues of $395.3M, +19.1%. The Street expected revenues to be a tad higher, at $396.3M. Earnings from continuing operations at 80 cents a share missed forecasts for 86 cents. At the main National Networks unit — which includes AMC, WE tv, IFC, and Sundance Channel — revenues grew 20.2% to $367.9M with cash flow +24.5% to $144.9M. The company says that ad sales were +36.3% to $146M due to strong demand for original shows such as Breaking Bad and The Walking Dead. Meanwhile revenue from cable and satellite distribution fees was +11.4% to $221M. But the unit also shouldered higher programming and marketing expenses. At the International and Other operation — with overseas channels and IFC Films — revenues were +6.9% to $31.1M with cash flow -4.9% to a loss of $8.5M. AMC says IFC Films expenses rose in the quarter. Investors ultimately may consider the Q3 numbers to be a blip: AMC shares are +48% over the last 12 months — and when execs talk to analysts this morning they’ll likely will be peppered with questions about …
No surprise that after shattering cable records with its Season 4 debut this month, the top-rated zombie apocalypse is coming back. AMC today announced there will be a fifth season of The Walking Dead. “We are very happy to make what has to be one of the most anti-climactic renewal announcements ever,” AMC President Charlie Collier said in a statement. “This is a show that has erased traditional distinctions between cable and broadcast. Its expanding base of passionate fans has grown every season, most recently – and most notably – with the season four premiere earlier this month, which broke viewership records for the series and became the biggest non-sports telecast in cable history.” Today’s announcement also stated that Season 4 showrunner Scott Gimple will continue at the helm, serving as executive producer alongside Gale Anne Hurd and Robert Kirkman, who created the comic series on which the TV show is based, as well as David Alpert, Greg Nicotero and Tom Luse. Previously the Dead’s supervising producer, Gimple was promoted earlier this year to EP for Season 4 of the show after the sudden exit of Glenn Mazzara in late 2012.
Today’s agreement to pay $1B for Liberty Global’s international networks company Chellomedia ”dramatically changes the investment thesis” for AMC Networks, BTIG’s Richard Greenfield says. Many believed that the pay TV network company was ripe for a takeover more than two years after Cablevision spun it off. It’s savoring the success of shows including The Walking Dead, Mad Men and the recently wrapped Breaking Bad and a big payoff from the resolution last year of its breach of contract complaint against Dish Network. AMC’s shares are up about 95% since it went public, and +46% over the last 12 months. But Greenfield downgraded AMC to “neutral,” noting that that even though “timing for a sale appeared ideal,” management’s time and attention now “will be shifted to a significant portfolio of global cable network assets.” Bernstein Research’s Todd Juenger says the deal means “slower growth, more financial risk, and [AMC] becomes harder to acquire.” But others say that AMC’s long-term prospects look rosier as it expands its global reach.
AMC Networks significantly expands its footprint with the acquisition of Chellomedia, the international content division of John Malone’s Liberty Global. In May, Liberty put the business up for sale, expecting a deal valued at between $800M and $1B, The Wall Street Journal reported at the time. AMC, which has actively been increasing its global presence via international programming business, AMC/Sundance Channel Global, will pay $1.035B for Chellomedia. (Scripps Networks Interactive, Turner Broadcasting and Discovery Communications had previously been mentioned as suitors.) Chellomedia produces and distributes TV channels across such territories as the UK, Benelux, Central Europe, Spain and Latin America and reaches about 390 million households. Included in the deal are Chello-branded channels airing genres ranging from movies to entertainment, sports, children’s, lifestyle and documentary programming. Chellomedia’s stakes in joint ventures with A+E Networks, CBS International and other partners also fall under the acquisition, although Liberty will hold onto its Dutch premium channel business. This deal will provide AMC, home to Mad Men and The Walking Dead, with further outlets for programming from AMC, IFC, Sundance Channel and WE tv. Here’s the official release:
NEW YORK, NY, October 28, 2013 – AMC Networks Inc. (Nasdaq: AMCX) announced today it has reached a definitive agreement to acquire substantially all of Chellomedia, the international content division of Liberty Global (Nasdaq: LBTYA) for €750 million (approximately $1.035 billion USD). The transaction is expected to close in the first quarter of 2014.
The company had to expand the size of board to 14 to add Jonathan Miller — who was News Corp’s Chief Digital Officer from 2009-2012 and now is a partner at investment firm Advancit Capital. He’ll serve on AMC Networks‘ Audit Committee, and represent owners of the publicly held Class A shares as opposed to the Class B ones controlled by Charles and James Dolan. Before joining News Corp, Miller was a founding partner of Velocity Interactive Group and served as CEO of AOL from 2002-2006.
After smashing through cable records with new highs in its Season 4 premiere last week, The Walking Dead settled down a bit last night – though not much. Up against the competition of the ratings powerhouse of the Bronco-Colts game on NFL Sunday Night Football last night, Week 2 of the AMC zombie apocalypse series saw a 12% overall viewership drop from its October 13 show. That’s 13.2 million viewers overall last night from the 16.1 million who watched last week. In terms of the adults 18-49 demo, The Walking Dead got 9.1 million in the category, 13% down from the stellar 10.1 million it had for last week’s season debut. That’s pretty much the same as the dip that the show saw in Week 2 of Season 3 on October 21 last year. However, last night’s viewership and demo result are the show’s second best ever, knocking the March 31 Season 3 finale of the drama down to No. 3 spot in the series’ history. Up until last week that Season 3 finale was The Walking Dead’s best result in both viewership and the key demo. The top Sunday night NFL game of the season so far, Sunday Night Football last night pulled in 25.87 million viewers overall and 12.0 million in the demo, according to fast nationals. However, the 7.12 rating that last night’s Season 4 Week 2 delivered beats everything else non-sports related on TV on Sunday with …
King Of Arms takes a look inside the raw and highly-competitive world of American arm wrestling. AMC has ordered 10 one-hour episodes of the series set to premiere in the first quarter of next year and timed to the second half of Season 4 of The Walking Dead. King Of Arms hails from Deadliest Catch producers Matt Renner and Ethan Prochnik and Dan Ilani, a partner in their recently formed Undertow Films. The series will follow members of five arm wrestling clubs, and their friends and families, as they hit the road and wager their rent money, reputations and even their relationships in pursuit of victory. The network also announced that it’s renewing series Small Town Security for a third season. Small Town Security explores a small, family-run security and private investigation company in Ringgold, GA called JJK Security. Ken Druckerman and Banks Tarver of Left/Right Films (This American Life, Mob Wives) executive produce. Small Town Security will air with the previously announced second season of Freakshow in the second quarter of 2014.
Western Canada could soon become a dead zone for The Walking Dead. In fact, as a complaint filed in U.S. federal court last week by Canadian telecom Telus reveals, all of AMC could be going dark for the company’s nearly 800,000 subscribers. Telus claims that AMC is playing rough to get better terms for its shows and that in the midst of carriage negotiations, the cable powerplayer breached the companies’ long-established deal by trying to pull the plug with a termination letter dated September 27. The lawsuit says AMC took it up a notch during talks by pledging to run a crawl during Sunday’s record-breaking Season 4 debut of Walking Dead warning Canadian viewers that they wouldn’t be able to see the conclusion of the series unless Telus agreed to a new deal by October 11. While the crawl never happened, this lawsuit in the Southern District of New York has. Although different in the details, this could end up being similar in consequences to the dispute AMC had with Dish Network last year that saw the satcaster boot the broadcaster off its systems for more than four months before a deal was reached.
Federal employees impacted by the government shutdown can use their free time to see a movie — and get free popcorn while they’re there – courtesy of AMC Theatres. Beginning today, federal workers just need to present a valid government or military ID at AMC concession stands to receive a free small popcorn. “The offer is good until common sense is restored in Washington D.C., or, more likely, until the shutdown ends or we run out of free popcorn”, AMC Theatres said in a statement. “There are hundreds of thousands of federal workers whose lives are being impacted,” said John McDonald, EVP Operations at AMC. “While we can’t do anything to resolve gridlock in Washington D.C., we can provide a few hours of entertainment, and free popcorn, while they wait to get back to work.” The purchase of a ticket is not necessary to receive the offer.
EXCLUSIVE: Kim Martin is leaving her post as president and GM of WE tv after nine years. She won’t be departing the company completely — she is transitioning into an advisory role at AMC Networks, reporting to CEO Josh Sapan. A replacement is expected to be named shortly. The network is keeping mum on its plans though observers note that the move comes days after top cable executive Lauren Zalaznick left NBCUniversal. Still, sources close to her dismiss the idea of her taking over WE. “Kim is an extremely talented executive with an impressive track record at WE tv,” AMC Networks COO Ed Carroll said in an internal memo sent earlier this morning. “Under her leadership, the network’s distribution has grown, viewership is up and WE tv is a top 3 women’s network on Thursday and Friday nights… I want to thank Kim for her many contributions to the company. Her leadership, commitment to excellence and her unflagging enthusiasm have made her a key member of the executive team, and has cemented WE tv’s reputation as a great place to work.” In the just released cable network rankings, WE averaged 350,000 primetime total viewers in Q3, up a healthy 29% from last year. In Women 18-49, the network drew 125,000 viewers, up 15%. WE tv, which evolved from airing commercial-free movies to a network for unscripted series, led by flagship Braxton Family Values, is undergoing another brand …
One knock against AMC Networks as a business is that it may be too small to hold its own when it negotiates deals with cable and satellite distributors. But CEO Josh Sapan says he isn’t worried: With hit series including Mad Men, Breaking Bad, and The Walking Dead, pay TV distributors looking for opportunities to squeeze costs will find that “AMC Networks may have among the highest, if not the highest, value for penny [based] on what we put on the air,” he told investors this morning at the Goldman Sachs Communacopia Conference. Indeed, it may be worth questioning programming giants such as Disney, Fox, Time Warner, and Viacom “about where scale goes and whether all scale’s good.” Sapan credits on-demand technologies and services for changing TV viewing habits — especially for dramas — in ways that favor AMC. When someone wants to catch up with a series, “instead of having to find it on Channel 11 at 11 PM, you find it on demand and have the energy, time and attention” to enjoy it. Also, since viewers can tune in when they’re ready, they’re watching television “with more concentration and attention,” he says. As a result, programmers can “pay attention to a more nuanced story.” VOD also enables networks including the ones he controls to stick with …