AMC Networks Inc., whose TV programs included The Walking Dead, is planning significant cutbacks following the departure on Tuesday of its chief executive officer, who stepped down less than three months after taking the top job.
(Bloomberg) — AMC Networks Inc., whose TV programs included The Walking Dead, is planning significant cutbacks following the departure on Tuesday of its chief executive officer, who stepped down less than three months after taking the top job.
In a memo to employees, Chairman James Dolan said the company has tried to grow its streaming business while facing pressure from the growing number of people canceling cable-TV service.
“It was our belief that cord cutting losses would be offset by gains in streaming,” Dolan said. “This has not been the case.”
Dolan added that AMC Networks is “primarily a content company and the mechanisms for the monetization of content are in disarray.”
The company needs to conserve resources and will implement “a large-scale layoff as well as cuts to every operating area,” he said.
The board is finalizing a replacement for former CEO Christina Spade. No reason was given for her departure. She is entitled to a severance of around $10 million, along with restricted stock units and other awards, according to a filing outlining her employment agreement.
The change continues a leadership revolving door. AMC, known for its flagship cable channel, along with brands such as IFC and SundanceTV, had been run by Josh Sapan before a similarly sudden exit last year. Matt Blank served as interim CEO before Spade, AMC’s former chief operating officer and chief financial officer. She was named the top executive effective Sept. 9.
“The news is a complete surprise,” said Doug Creutz, an analyst at Cowen & Co. With no apparent successor lined up, Creutz expects AMC shares to be under pressure until the company “can reassure investors that Spade’s exit was not related to any financial-related issues.”
The stock was down 5.5% as of 12:01 p.m. in New York. The shares had fallen 40% this year through Monday’s close.
Turnover at the top adds to the challenges faced by AMC, which is shifting to the streaming age as cord-cutters drop their cable packages. While online subscriptions to AMC+ and the company’s other services jumped 44% last quarter from a year earlier to 11.1 million, total sales dropped 16% on lower licensing revenue, advertising and fees from pay-TV companies. A similar blow to profits has roiled other parts of the media world, contributing to the downfall of Walt Disney Co. CEO Bob Chapek earlier this month.
Adding to AMC’s woes, one of its most popular programs just ended its run. Its zombie apocalypse show concluded its 11th and final season on Nov. 20, and the company has struggled to find another hit of that scale. Three Walking Dead spinoffs are in the works, AMC said earlier this month. The company is also banking on a collection of programs based on the works of author Anne Rice, including Interview With the Vampire.
AMC Networks, not to be confused with movie theater company AMC Entertainment Holdings Inc., is controlled by the Dolans, one of the most influential families in the cable-TV industry. They also run Madison Square Garden Sports Corp., which owns basketball’s New York Knicks and hockey’s New York Rangers, and control the company behind Madison Square Garden.
The company employed 1,739 full-time workers and 287 part-time ones at the end of December, 2021, according to a filing.
(Updates with Dolan memo in second paragraph.)
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