AMC Networks Inc. purchased a 49.9% stake in BBC America and took operational control, as the companies formed a union to help them in negotiations with pay-TV carriers.
In a statement from both companies, they described the $200-million deal as a “long-term creative partnership” which would give them access to more premium content and grow BBCs viewership within the U.S.
The American television group would run BBC America as a stand-alone channel, as they do with their other networks, including Sundance, WE and the producer of hit tv-shows “The Walking Dead” and “Breaking Bad” AMC.
The purchase will give AMC Networks more negotiating power when discussing fees with pay-TV operators, such as Comcast and AT&T, which are both expanding, acquiring Time Warner Cable and DirecTV respectively.
“We will be essential to distributors because we will be essential to their customers,” AMC Chief Executive Officer Josh Sapan said in a phone interview for Bloomberg, “With that, you can get pricing power.”
BBC America and AMC Networks are already familiar with each other, as they have worked on the joint production of award-wining tv-series “Top of the Lake” and “The Honourable Woman”.
With the rise of viewers who prefer video content on demand rather than traditionally scheduled broadcasts, the two groups are paying close attention to digital platforms, such as Amazon, Netflix and Hulu. AMC Networks CEO Jost Sapan said that BBCs tv-series “Doctor Who”,”Orphan Black”and ”Luther” had done particularly well on streaming services.
“What will propel us in the future is the fact that this content, when aggregated, will be very important in a linear environment and in a digital environment,” Mr Sapan said. “Our content rises to the top on many levels and is particularly well-suited to an era of on-demand viewing and expanding consumer choice.”
AMC Networks Inc. lost 0.49% on Thursday and closed at $58.44 on the NASDAQ, marking a one-year decrease of 18.12%. The company is valued at $4.21 billion. According to the Financial Times, the 17 analysts offering 12-month price targets for AMC Networks Inc. have a median target of $70.00, with a high estimate of $97.00 and a low estimate of $60.00. The median estimate represents a 19.78% increase from the last price of $58.44.
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