AMC Networks high value could mean a sale


AMC NetworksThe Dolan Family’s AMC properties might be a strong acquisition target by the likes of Comcast, News Corp. and CBS Corp., due to its record of developing hit shows, according to a Bloomberg report. As well, negotiations for its networks bundled with higher-rated channels owned by a larger media company would mean a force to be reckoned with in carriage deals.

Comcast, which is acquiring the rest of NBC Universal, would be interested in AMC at the right price, according to the story. The second-highest price-earnings ratio among peers means the time for AMC’s owners to sell is now, CRT Capital Group LLC told Bloomberg: “The Dolan family realizes that AMC’s value is peaking,” Lance Vitanza, a CRT Capital analyst, said in an interview. “If I’m Jimmy Dolan, there’s never been a better time for me to sell AMC Networks.”

AMC owns four channels, including a namesake brand that airs “Mad Men” and “The Walking Dead,” the top-rated U.S. drama in the most-coveted demo. Dish Network dropped the networks for almost four months in 2012, and Time Warner Cable CEO Glenn Britt has said inclusion in channel lineups isn’t a “birthright.” Faced with the possibility AMC’s reach may shrink, analysts see its shares slumping 1% in the next year, according to data compiled by Bloomberg.

Jim Dolan is the CEO of Cablevision Systems, which spun off AMC in 2011. The Dolan family still controls the voting rights for the $4.2 billion company, and Jim Dolan is a board member along with his father, AMC Chairman Charles Dolan.

Georgia Juvelis, a spokeswoman for New York-based AMC, told Bloomberg the company doesn’t comment on speculation. John Demming, a spokesman for Comcast, also declined to comment, as did News Corp.’s Nathaniel Brown and CBS’s Dana McClintock.

Besides its namesake channel, AMC owns IFC, which features movies and original TV programs; the Sundance Channel, which airs independent films; and the female-focused WE tv. Its biggest ratings success is “The Walking Dead,” a zombie series that had 12.3 million total viewers for its 2/10 midseason premiere, according to data compiled by Nielsen. The show has averaged 6.8 million viewers in the 18-to-49 demographic this season, the highest of any drama.

AMC also airs “Breaking Bad,” which concludes this year, and “Mad Men,” which has two more seasons, with the next one starting in April. The impending conclusions of those two shows may spur a deal, Vitanza said.

While AMC owns “The Walking Dead” and can profit from online downloads, DVDs and syndication, it doesn’t have the same control over “Mad Men” and “Breaking Bad.” Lions Gate Entertainment owns and produces “Man Men,” while “Breaking Bad” belongs to Sony Corp.

See the Bloomberg story here

RBR-TVBR observation: Like the report mentioned, even though a buyer may not gain long-term benefits from “Mad Men” and “Breaking Bad,” AMC’s success cultivating those series proves the value of the company. Both programs and their actors have won accolades including Emmy awards and Golden Globes.

The bigger media conglomerates want a network in their stable with a strong track record for churning out iconic programming. Put more money behind the programming at AMC and who knows what you may get? Certainly they’d be in a stronger position for carriage negotiations, that’s for sure.