The deal with eOne is AMC and Sundance Channel’s first exclusive international output partnership for scripted content. The parties already have a relationship with eOne the studio and international distributor behind AMC’s Hell On Wheels, and along with Fox International Channels, it’s the international distributor on The Walking Dead. The first series eOne will distribute internationally under the new pact are Halt & Catch Fire, a 1980s-set drama about the personal computing boom with Lee Pace, Scoot McNairy and Mackenzie Davis; Turn, a period drama based on Alexander Rose’s book Washington Spies and starring Jamie Bell; and The Red Road, about a local cop (Martin Henderson) struggling to keep his family together while policing two clashing communities. Click over for details:
With 39 Emmy nominations and now a strong Q2 earnings report, I suspect CEO Josh Sapan is in a good mood today. The bottom line was helped by a $133M contribution from Dish Network — part of its payment to resolve the breach of contract dispute involving the VOOM HD channels. With that included, AMC Networks generated net income of $135.7M in the quarter, up nearly 227% vs the period last year, on revenues of $379.3M, +15.8%. The top line was well ahead of the $368.1M that analysts anticipated. And earnings from continuing operations at $1.87 per share beat forecasts for 78 cents. The numbers partly reflect the popularity of AMC’s original shows Mad Men and The Killing. Operating income at the National Networks — including AMC, WEtv, IFC, and Sundance Channel — was +14.6% to $127.6M on revenues of $353.6M, +15.9%. The company says that pay TV distribution fees increased 17.5% to $206M while ad sales rose 13.7% to $147M “due to strong demand for our original programming.” The VOOM cash shows up in the International and Other category which had $118.9M in operating income, up from a $14.1M loss last year, on revenues of $29.9M, +13.9%. Without VOOM, operating income would have been +14.6% for the National Networks and flat at International and Other. Sapan says that “our successful original content drove our overall financial results” and “continues to fuel the performance of our networks …
This is “a new, developing phenomenon,” AMC Networks CEO Josh Sapan told investors this morning at the Barclays’ Global Technology, Media and Telecommunications Conference. Although advertisers still crave ratings points, they also increasingly want to reach people who say that “there are only two or three shows I watch and I live and die for them.” The trend is gaining momentum as viewers discover opportunities to binge view shows on pay TV, VOD and streaming services including Netflix and Amazon Prime. In addition, young viewers become obsessive about programs when social networks such as Facebook and Twitter help to connect them with others who share their passion. As a result, “that favorite stuff in media is emerging as the most important [driver] of value,” Sapan says. That’s encouraging for networks such as AMC — which has high-engagement hits with dramas including Mad Men, The Walking Dead, and Breaking Bad. But it’s hard to build a business around the trend: “Good dramatic TV shows aren’t known until they’re on,” he says. And nobody has perfect pitch. “There are many shows that have spectacular television pedigree and the show doesn’t work” while others from untested producers or stars “take off like crazy.” Sapan says he’s encouraged by his upcoming shows including Low Winter Sun (a police drama), Turn (about Revolutionary War spies), Halt & Catch Fire (about the computing boom in the 1980s), and Line Of Sight (a sci-fi drama the AMC chief calls “nuanced and exquisite”).
WE TV Eyes Expansion Into Scripted Programming With Series Order To AMC’s LaGravenese/Goldwyn Drama Pilot
EXCLUSIVE: AMC Networks‘ female-focused WEtv is looking to follow in the footsteps of siblings AMC, IFC and Sundance Channel by moving into original scripted series. I hear WE is getting help in its plans from AMC, whose untitled Richard LaGravenese/Tony Goldwyn drama project is eyed to become WE’s first scripted series. (The cable network also is exploring other scripted ideas.) I hear WE is considering a nine-episode order to the LaGravenese/Goldwyn project, originally ordered as a pilot by AMC last year. It is a legal thriller centered on a district attorney (Damon Gupton) who uncovers new evidence that prompts the reinvestigation of a sensational murder case. It explores race, capital punishment, personal morality and how people struggle with the shades of gray found in the absence of a simple, ordered moral universe. I hear the potential series order is contingent on finding a showrunner as David Manson, who ran the pilot at AMC, has since moved to Netflix’s House Of Cards as executive producer. LaGravenese wrote and Goldwyn directed the pilot, which the two executive produced, with Andrew Sugarman serving as a co-executive producer. Marin Ireland, Clarke Peters and Aunjanue Ellis co-star in the pilot, which didn’t get a series pickup in December alongside Low Winter Sun but was left in contention. WE, which like AMC started off airing commercial-free movies, currently has its scheduled dominated by unscripted series, led by flagship …
“We’re paying particular attention to Sundance” because of the campaign to begin folding in commercials — due to take effect toward the end of this year — AMC Networks CEO Josh Sapan told analysts this morning. The company touted Sundance Channel‘s appeal to upscale audiences in its sales pitches to advertisers for the upfront market, and is now negotiating to change the channel’s pay TV distribution agreements. Sundance’s current affiliation deals “had not embraced or expected advertising”, Sapan says. But “we’re at the final stage of that [renegotiation] plan”. While the finances for Sundance remain “a little difficult to model,” the AMC chief says that he wants to maximize ad rates by promoting the channel’s “story-telling genetics” and ability to become “a home for some of the best shows on TV.” That should result in “very high engagement and people who care a lot about them.” AMC has used the drama Rectify, its first wholly owned original scripted series, to lead its campaign to change Sundance’s business model. “The critical reception was extremely strong and we think that signals vitality for the direction the channel is going in,” Sapan says. He adds that AMC helped the series by offering new episodes in movie theaters and on cable VOD ahead of their appearance on the channel’s program schedule. “We tried to get people to watch and refer their friends and others to it and we think there’s …
The stock price is up nearly 6% pre-market after the company released a Q1 report that showed strong results in most key metrics. AMC Networks generated net income of $61.5M, +42.5% vs the period last year, on revenues of nearly $382M, +17.1%. The top line was well ahead of the $366M that analysts projected. And earnings at 85 cents a share topped forecasts for 82 cents. The core National Networks operation led with way with revenues +18.2% to $359.5M and operating income +29.5% to $141M. The company says that ad sales were up 26.9% to $164M “due to strong demand for our original programming, primarily at AMC” which airs The Walking Dead. Affiliate fees rose 11.7% to $196M. The international business, which is much smaller and includes IFC Films, was a different story: Revenues fell 0.2% to $26.3M with an operating loss that increased by $2M to $15M. AMC says that the operation was hurt by a revenue decline in the independent film operation. “AMC Networks is off to a strong start in 2013,” CEO Josh Sapan says pointing to the strong performance of shows including Sundance Channel’s Rectify and Top Of The Lake, IFC’s Portlandia, and WEtv’s Braxton Family Values.
AMC Networks‘ C-suite shouldn’t consist of mad men based on the raises everyone but the CEO received last year. The increase in Josh Sapan‘s non-equity incentives wasn’t big enough to compensate in a drop in stock awards. His $8.9M package includes $1.28M salary, $2.08M stock awards, $5.47M non-equity incentives, and $83,647 in other compensation, according to the proxy filed today with the SEC. The board says that Sapan and other execs “allowed us to continue to successfully navigate difficult economic conditions and product results that strengthened our business.” AMC shares appreciated about 31% in 2012, but Sapan’s take came to 4.9 times the median compensation for the other four execs named in the proxy — three times the level that makes corporate governance watchdogs fear that a CEO is too powerful.
The cable operator will pocket $525M and AMC Networks will end up with $175M the companies said today in an SEC filing. This was the last big question remaining after Dish Network agreed in October to pay $700M to settle the breach of contract suit that Cablevision and AMC filed. They asked the courts to determine whether Dish had the right in 2008 to terminate its 15-year deal to air the VOOM Networks suite of HD channels. The channels, formerly owned by Cablevision, were packaged with AMC when the cable company spun off the network operation last year. The cash split between Cablevision and AMC does not account for the income that the cable networks company will receive from the fee increase that Dish agreed to pay to continue carrying channels including AMC, IFC, Sundance Channel, and WeTV.
NEW YORK, NY, March 13, 2013 – AMC Networks Inc. announced today that it has appointed James Maiella Senior Vice President, Corporate Communications. He will report to Ellen Kroner, Executive Vice President, Communications & Marketing.
In this role, Maiella will oversee business and trade media relations for AMC, IFC, WE tv and IFC Films. He will work closely with AMC Networks’ other Senior Vice President of Corporate Communications, Georgia Juvelis, who now adds additional corporate communications and corporate marketing responsibilities to her role, while continuing to oversee business and trade media relations for Sundance Channel and AMC/Sundance Channel Global, the company’s international programming business.
AMC‘s Walking Dead partnership with Anchor Bay was such a success that the companies are teaming up for more TV-on-DVD distribution. Anchor Bay will handle North American DVD, Blu-ray, and certain digital releases of future original programming from AMC, IFC, and The Sundance Channel starting with The Sundance Channel’s scripted series Rectify, created by Oscar-winning actor Ray McKinnon and produced by Breaking Bad‘s Mark Johnson and Melissa Bernstein, about an ex-con (Aden Young) readjusting to life on the outside. Rectify debuts April 22 on The Sundance Channel and runs for six one-hour episodes.
Anchor Bay will also handle home entertainment distribution of AMC Studios and Endemol Studios’ forthcoming Detroit-set cop drama Low Winter Sun, starring Mark Strong. Based on the 2006 British mini-series of the same name, Low Winter Sun is written by Simon Donald (The Deep) and produced by Tiger Aspect Productions. The first season runs for ten one-hour episodes.
These look like interesting defensive maneuvers at a time when cable and satellite companies are threatening to drop little-watched channels. Sundance — which only reaches about 52M pay TV households — would seem to be vulnerable in some negotiations, although AMC Networks says it has recently completed long-term deals with Comcast, AT&T, and Verizon. But AMC Networks CEO Josh Sapan told analysts today that he recognizes the channel “is undernourished, in need of (investment) and rich in opportunities.” While execs offered few specifics, they noted that on April 22 Sundance will introduce its first fully owned scripted series, Rectify (from the producers of Breaking Bad), and that a second one will be coming as soon as next winter. There’ll be at least two scripted series in 2013 vs one in 2012. In addition, the company just announced that beginning March 4 Sundance will show the first four seasons of AMC’s Breaking Bad. Along with the Sundance investments, AMC is researching online distribution opportunities that “shouldn’t be confused with TV Everywhere” — the industry-wide streaming initiative — Sapan says. The goal is to become “educated and smart” in the possibility of distributing shows directly to consumers. “Think iTunes,” he says.
The cable programming company’s shares fell 10.4% in initial trading this morning after it released Q4 financials. AMC Networks says it generated $15.2M in net income in the quarter, -48.5% vs the previous year, on revenues of $366.7M, +8.2%. Analysts expected revenues to be closer to $370.1M. And earnings at 21 cents a share fell short of forecasts for 65 cents. AMC says it missed about $31M in affiliate fees in Q4 as a result of the fight with Dish Network, which kept AMC Networks’ channels off the No. 2 satellite service for several months ending November 1. Since the breach of contract dispute involved the defunct VOOM suite of HD channels, the litigation expenses show up in the International and Other unit where revenues fell 16.9% to $32.6M and operations ended up with a $4.3M loss from last year’s $6.9M profit. Over at the main National Networks business, revenues were up 10.8% to $338.6M with an operating cash flow of $106.7M, +5.6%. AMC says that ad sales were up 16% to $157M “due to strong demand for our original programming, primarily at AMC.” Distribution revenues were up 6.8% to $182M. But the company notes that it had to shoulder higher programming and marketing expenses as well as the temporary loss of carriage on Dish.
Looks like AMC Networks’ warning to Verizon FiOS‘ 4.6M subscribers that they were “about to lose” channels including AMC, IFC, and WE tv was all for naught. The companies announced they have a pact to keep the channels on the phone giant’s video system past the end of December, when the current contract expires. While the companies didn’t disclose specific terms, AMC says that it’s a “long-term agreement” that “recognizes the value of our networks.” Susquehanna Financial Group’s Vasily Karasyov predicts the programmer will see a 6% increase in the fees it collects from Verizon, but says we should know the answer next year when AMC reports its Q1 earnings. A few weeks ago, Verizon chastized AMC for trying to “scare” FiOS customers adding that it has “a history of using their viewers as pawns in their negotiations with distributors.” Dish Network recently resumed carriage of AMC’s networks after dropping them in June while the companies were engaged in a legal battle.
The programming company already has a website warning Verizon FiOS‘ 4.6M subscrubers that they are “about to lose” channels including AMC, IFC, and WEtv when the current contract expires at year end. Now AMC Networks is reaching out directly to Verizon customers: AMC says in a message that negotiations to renew the programming deal, which goes back to 2006, “are ongoing and we are hopeful to reach an agreement with Verizon that recognizes the fair value of our networks.” That sounds like code for: we’re far apart on the terms. Verizon says AMC is simply trying to “scare” FiOS customers. The phone company adds that it’s “unfortunate that [AMC] has decided to unnecessarily publicize these discussions, but not surprising as they have a history of using their viewers as pawns in their negotiations with distributors.” Dish Network recently resumed carriage of AMC’s networks after dropping them in June while the companies were engaged in a legal battle.
The Q3 message for AMC Networks comes from William Shakespeare: All’s well that ends well. Although earnings were down, everyone knows the main reason — the court fight with Dish Network that led it in June to drop the company’s channels. And as AMC chief Josh Sapan reminds this morning, that’s past and his company is “delighted to partner with them again.” Meanwhile, AMC topped the Street’s expectations. It generated net income of $36.6M, -8.4% vs the period last year, on revenues of $332.1M, +17%. That revenue figure is well ahead of the $288.5M that analysts anticipated. And earnings at 51 cents a share beat expectations for 37 cents. The company’s National Networks (AMC, WEtv, IFC and Sundance Channel) generated $306.2M in revenues (+18.5%). Affiliate fees rose 24.3%, to $199M, as digital and licensing deals offset the lost revenue from Dish. Ad revenues increased 9.1% to $107M. But operating income dropped 2% to $98.5M in part due to litigation and other costs for the Dish dispute. The company’s grab-bag category for international networks and other operations — including IFC Films — recorded revenues of $29.3M (-4.6%) with an operating loss of $12.9M, an increase from last year’s $4M loss.
Dish Network Chairman Charlie Ergen can change his tune on an issue more elegantly than just about anyone in the media business. Consider how easily he just reversed himself in an analyst call where he explained his company’s agreement to resume carrying AMC Networks’ channels, which he dropped in June. He brought them back as part of the $700M deal to settle AMC’s breach of contract suit against Dish after it ended a 15-year agreement to carry the now defunct VOOM HD networks. Ergen noted that AMC’s hit The Walking Dead is “off the charts.” If the channel has more shows like that “then it will be a fair deal for us.” And he likes the AMC folks. “Absent the litigation we probably wouldn’t have gotten to that point” of dropping the channels. That’s a head-spinning shift from three months ago when he said it was a question of cost, not courts. AMC’s networks were too expensive, he said then, especially since “our customers are not looking at zombies in New York City… They live on farms and ranches.” What’s more, he preferred doing business with Mark Cuban, whose HDNet channels took the slots formerly held by AMC’s services.
Sure looks that way — for the company, not Dish Network subscribers. AMC Networks shares are +3.9% in early trading following yesterday’s $700M agreement with Dish Network to settle the $2.4B breach of contract case involving the defunct VOOM suite of HD channels. But the surprise is that Dish is up 2.2%. Consider that a sigh of relief from shareholders who feared the worst from the lousy hand chairman Charlie Ergen had to play in court. A series of rulings by New York Supreme Court Judge Richard Lowe III found that Dish destroyed or covered up important evidence that probably would have hurt its case — and made Dish a likely loser against the charge that in 2008 it wrongly terminated its 15-year deal deal to carry VOOM. Yet Ergen’s decision in June to drop the AMC channels appears to have paid off. The $700M settlement was “well below Street expectations” of at least $1B says Wells Fargo Securities’ Marci Ryvicker. Barclays Equity Research’s James Ratcliffe calls the amount “quite reasonable” in light of the court setbacks.
Cablevision Systems and AMC Networks announced today they have settled all litigation with Dish Network. Settlement includes a new long-term agreement for Dish to resume carriage of AMC Networks including AMC, IFC, Sundance Channel and WE TV. AMC will return today on Dish channel 131. The other networks will return November 1. That’s good news for Dish subscribers who missed watching The Walking Dead, Breaking Bad, Mad Men and other AMC shows because Dish had dropped the networks back in June. Dish had maintained publicly it was a carriage fee dispute, but Cablevision-AMC Networks said it really was because of a $2.4 billion breach of contract suit over the satcaster’s decision to drop the now-defunct VOOM Channels that were included as part of AMC Networks spinoff from Cablevision into a separate company.
Settlement terms also call for Dish to pay Cablevision $700 million in cash. As part of the settlement Dish will receive wireless multichannel video and data spectrum licenses that cover a population of 150 million in 45 markets including New York, Los Angeles, Chicago, San Francisco and Philadelphia.
As the trial proceded in New York Court last week, things looked increasingly bad for Dish as the judge repeatedly denounced the satcaster for its behavior following a string of embarrassing revelations that suggest it tried to hide evidence that it feared might hurt its case. On Thursday, a note was posted on the New York State Supreme Court website …
Listen to Episode 6 of our weekly podcast Deadline Big Media With David Lieberman. This week, Lieberman and host David Bloom discuss whether the big entertainment companies, with their reliance on ever-increasing cable-TV fees, are driving off a fiscal cliff; what happened to Google in its awful quarterly earnings report; what to expect from the rest of earnings season; and whether a possible settlement of the $2.5 billion VOOM lawsuit will finally bring AMC Networks TV shows back to the Dish Network.