As the CEO departs and linear TV viewing declines, AMC Networks will make layoffs
The company, home to IFC, AMC+, Shudder, Acorn TV, and Sundance TV, will see cuts to every operating area, wrote James Dolan, the company’s chairman.
In a memo to staff received on Nov. 29—shortly after AMC Networks CEO Christina Spade abruptly left the position after less than three months—the company’s chairman, James Dolan, warned of “large-scale layoff as well as cuts to every operating area.”
“It was our belief that cord-cutting losses would be offset by gains in streaming. This has not been the case,” Dolan wrote, adding: “We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood. We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community.”
The firm, which owns streaming services AMC+, Acorn TV, and Shudder in addition to cable networks AMC, IFC, and Sundance TV, didn’t immediately disclose information about the reasons for the transition and stated that it was nearing the end of the process of selecting a replacement.
AMC Networks currently has roughly 10.8 million subscribers across all of its brands, and it anticipates that number to reach 12 million by year’s end, with a goal of 20 to 25 million by 2025. But the rate of cord cutting is increasing. According to a Leichtman Research count, the top pay-TV providers in the U.S. lost 785,000 net video subscribers in the most recent quarter compared to a loss of 650,000 in the same time last year.
The news of the CEO’s resignation and the layoffs comes soon after the conclusion of AMC’s most popular program, The Walking Dead, and as the basic cable network prepares to capitalize on lucrative streaming and international sales for at least three planned spinoffs starring the franchise’s most adored actors. AMC canceled long-standing streaming and overseas agreements that were made before the zombie drama became a worldwide success by declaring the flagship to be “closed.” But as interest (and ad revenues) in the series continue to wane, money from the sale of TWD spinoffs won’t be enough to sustain the network and its several streaming services.
In order to stay competitive, AMC has recently included more foreign co-productions with short-order originals. Following the conclusion of Killing Eve and the Breaking Bad prequel Better Call Saul in 2022, the network will reach a tipping point. With Interview with a Vampire already receiving a renewal, Mayfair Witches and Invitation to a Bonfire both scheduled for release in 2023, numerous TWD spinoffs, and the upcoming Orphan Black sequel Echoes, AMC has big aspirations for its Anne Rice property. In the not-too-distant future, watch for the Saul actors Bob Odenkirk and Giancarlo Esposito in Straight Man and The Driver, respectively.
CEO Spade’s abrupt departure caught Wall Street analysts unprepared. AMC Networks’ stock fell $1.24, or 6%, to $19.34 in midday trade as a result of the ambiguity.
Despite having a contract that lasts through 2025, Spade startled investors by assuming the CEO position on September 9.
The news of Spade’s departure was “completely unexpected,” Cowen analyst Doug Creutz said, adding that it “leaves the firm in need of fresh leadership, with no apparent replacement in the wings.” While reiterating his “market perform” rating and $22 price target for the stock, Creutz noted: “The firm provided no explanation for the exit, leaving a wide range of probable explanations, both personal and operational-related. We expect this news to pressure shares unless and until the company finds new leadership and can reassure investors that Spade’s exit was not related to any financial-related issues.”
“We thank Christina for her contributions to the company in her CEO role and her earlier CFO role, and we wish her well in her future endeavors,” chairman Dolan said in a statement on Tuesday.
Dolan’s memo to AMC employees is below:
AMC Networks Community:
As I am sure you are aware our industry has been under pressure from growing subscriber losses. This is primarily due to “cord cutting.” At the same time, we have seen the rise of direct-to-consumer streaming apps including our own AMC+. It was our belief that cord-cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray.
It is for that reason that I and the Board of Directors of AMC Networks have concluded that we as a company need to conserve our resources at this time. We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks. We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood. We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community. However, it is imperative that we begin immediately with this new course of action.
The Dolan Family and the Board of AMC Networks have great pride in the company and products that you have created. This is a confusing and uncertain time in our industry. We are confident that AMC Networks will come through this even stronger. Your executive leadership will follow up with details shortly. We wish only the best for everyone in the AMC Networks community.
Sincerely,
James Dolan