A media sector shrinking due to an influx of losses, anemic stocks, Layoffs Executive turmoil revealed its latest losses Tuesday: 20% of AMC NetworksAmerican employees, or about 200 people, all together Departure of Christina Spade CEO.
The news follows The departure of Bob Chapek is equally sudden This past Sunday from Disney after a quarter of catastrophic broadcast losses and months of public relations missteps. No reason was given for Spade’s departure, but it set off another round of speculation about the possibility that the cutbacks were a precursor to the M&A deal. AMC Networks declined to comment when contacted by Deadline.
Jobs are being cut from Warner Bros Discovery to Paramount Global, Disney and The CW along with a virtual bloodbath in tech. A staff memo issued today from AMC Networks President James Dolan, whose family is the controlling shareholder in the company, was particularly grim, noting that “the mechanics of content monetization are in shambles.”
He said that meant “widespread layoffs” and “significant cuts in every operating area” at the company, which is now looking for a new CEO. The Board is confident that the “cuts” will enable AMC Networks to come in stronger during this period and be well positioned to drive future growth over the long term. He said the company had come to a realization about the streaming business, putting it in words capable of chilling the spine of the mass media: “We believed that cord-cutting losses would be offset by gains in streaming. This was not the case.”
Wall Street expressed unease about the situation and lack of clarity about Speed’s exit. Shares fell more than 5%. Her departure was “a complete surprise and left the company in need of new leadership, with no clear successor in the wings,” said analyst Doug Kreutz of Cowen & Company.
AMC like others in the space is facing declining advertising as well as rising broadcast costs and declining linear revenue. “It’s been kind of the same for a while, kind of shuffling along the top line, with linear pressure going on. They’ve spent a fair amount of money on content and if they can’t grow revenue, it’s going to put pressure on margins,” Creutz said. It is not unique to them.
Another company in Dolan’s orbit, Madison Square Garden Entertainment, is also in the midst of cost cuts. “We look comprehensively across all of our businesses to ensure all areas continue to be positioned for future success,” the company’s CFO said on a recent call.
That’s even as AMC/AMC+ continues its streak with three new series — Dark Winds, Moonhaven And the Interview with a vampire – They all got good renewals and turned a profit in Season 2. The network, whose programming team is led by Dan McDermott, president of entertainment and AMC Studios, also has high hopes for the upcoming future. Mayfair Witcheswhich debuted in January, as well as many more walking dead Subseries in the works. The layoffs unveiled today and starting this week are said to be sweeping and it’s not clear which departments will be hardest hit.
“Ten years ago, we saw cord cutting was going to be a thing, and we thought an influx of growth would make up for it. And the influx grew. It just took a lot more investment than anyone expected,” said a media fund manager. “There was a very bad cyclical downturn, and I had to Everyone rethink what they’re doing. The same discussions take place at every media company.”
The question for AMC is how much to cut before the bones are hit, especially at a company much smaller than WBD or Disney that’s already seen significant downsizing in 2020. Longtime CEO Josh Sapan left next, and former Showtime boss Matt Blank came in. Interim CEO position. Spade, a former colleague at Viacom, CBS and Showtime, was named CFO in January 2021, then added the title of COO and Then he assumed the position of CEO last September 9 — less than three months ago — on a contract through 2025. “As I begin my new role as CEO of AMC Networks, I feel proud to lead the company through one of the most exciting moments in our history,” she said on the third-quarter earnings call Nov. 5.
Quarterly results were discouraging, joining a pile of other media and tech quarterly numbers that have been hurt by a broad decline in advertising. AMC’s advertising revenue fell 10% year-over-year to $180 million for the three months.
Addressing the shortcomings of a corner desk is tough work. Disney brought back Bob Iger. The Disney board has also reportedly approached former Disney chief Kevin Mayer to replace Tangle and will be looking to identify a worthy successor to Iger given that the CEO’s contract expires in two years. It is very difficult for AMC to attract a heavy hitter due to Dolans absolute control. “In the end, the CEO may not feel like he’s in charge,” Creutz said. Advertising sessions are limited. But no CEO can wave a magic wand if cord cutting is shrinking revenue and streaming can’t make it.
The battered stock market makes it hard to get out – they’ll want to – they won’t sell – being an ever-present question surrounding the Dolan family’s assets. In an already precarious landscape, with Lionsgate creating a new configuration for Starz and its studio and Discovery and WarnerMedia integration continuing fitfully, the immediate question is which buyer makes sense, especially in a high interest rate environment.
“I’m not saying it wouldn’t be attractive to someone. But are you going to get a decent price for it? With the state of the market and the balance sheets and the fact that they are flowing now. I don’t know who is going to offer them a good price. This is not the time. The market is in the tank right now. Someone said in Wall Streeter “Everyone is worried about a recession.”
“Ask the smartest people, those who’ve sold companies over the past five years, what they think — Jeff Bewkes, Rupert Murdoch, the Scripps. They may have gotten lucky, but they sold when the sale was good. Bewkes and Murdoch had a high regard for their abilities and knew it didn’t matter. If you have awesome hands.”
It sold Bewkes Time Warner to AT&T in 2018 for approximately $85 billion. Murdoch handed most of 21st Century Fox’s film and TV assets over to Disney in 2019 for $71 billion. Scripps Networks Interactive sold itself to Discovery in 2017 for $14.6 billion. However, all of these deals have been completed in relatively rosier times.
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