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AMC Networks Will Reduce Its U.S. Workforce By 20% Due To Cord Cutting, Streaming Costs, And Economic Uncertainty

2022/11/30 (Nov 30th, 2022 8:26 am)
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Today, the media industry revealed its most recent casualties, including 200 employees from AMC Networks, or 20% of its U.S. workforce, along with CEO Christina Spade’s resignation. The industry has been struggling with streaming losses, weak equities, layoffs, and management upheaval.

AMC+ has been on a roll with the past three new shows, Dark Winds, Moonhaven, and Interview with a Vampire, all receiving favorable reviews and winning Season 2 renewals. The revelation follows Bob Chapek’s equally abrupt exit from Disney last Sunday amid a controversy. The network has great expectations for the impending January premiere of Mayfair Witches as well as the several future Walking Dead spinoff series. The network’s programming division is overseen by Dan McDermott, President Entertainment & AMC Studios. There will reportedly be widespread layoffs announced today and beginning this week, although it’s unclear which departments will be most impacted.

Ten years ago, we predicted that cord-cutting would become popular and believed that the rise of streaming services would counteract it. A media fund manager explained that it just required much more money than anybody had anticipated. “There has been a rather severe cyclical downturn, and everyone has had to reconsider their current course of action.
Madison Square Garden Entertainment, a firm that is part of the Dolan empire, is likewise cutting costs. On a recent call, the company’s CFO stated, “We are looking holistically across all of our companies to ensure that all sectors continue to be positioned for success in the future.”

AMC must determine how much it can reduce without breaking the bank, especially because it is a lot smaller corporation than a WBD or Disney and already had a significant reduction in 2020. After that, Matt Blank, the former Showtime head, was appointed as acting CEO in place of longtime CEO Josh Sapan. Spade, a former coworker of his at Viacom, CBS, and Showtime, was appointed in January 2021 as chief financial officer. He then gained the position of chief operating officer, and last September 9 — less than three months earlier — he took over as CEO with a deal that runs through 2025. On an earnings conference for the third quarter held Nov. 5, she remarked, “As I begin my new job as CEO of AMC Networks, I am pleased to lead the company at one of the most exciting periods in our history.”

The quarterly figures were depressing, adding to a long list of other media and industry quarterly data that were negatively impacted by a general decline in advertising. For the three months, AMC’s ad revenue decreased by 10% from the prior year to $180 million.

As a possible replacement for Chapek, the Disney board allegedly approached former Disney executive Kevin Mayer. However, with Iger’s contract set to expire in two years, the board will also be searching for a deserving Iger replacement. Given the Dolans’ absolute power, it is far more difficult for AMC to draw a big name. In the end, a CEO might not feel like they are in charge, according to Creutz. But if cord cutting causes revenue to continue declining and streaming can’t make up the difference, no CEO can wave a magic wand.

A depressed stock market makes it challenging to sell, with the Dolan family’s assets always up for sale or not. The immediate question revolves around a logical buyer, particularly in an environment with high interest rates. Lionsgate is currently looking for a new configuration for Starz and its studio, and Discovery and WarnerMedia are still integrating in fits and starts.

“I’m not saying someone wouldn’t find it appealing. Everybody is concerned about a recession, a Wall Streeter claimed.

Ask the sharpest individuals—Jeff Bewkes, Rupert Murdoch, and the Scripps family—who have sold enterprises in the last five years what they believe. They may have been fortunate, but they sold their goods at a profitable time.
But each of those transactions was concluded at a period of relative prosperity.
months of public relations blunders and significant streaming losses. Although there was no explanation provided for Spade’s departure, it sparked new rumors that the cuts might have been a prelude to an M&A deal.

A virtual carnage in technology is also present, from Discovery to Paramount Global, Disney, and the CW.
According to him, this will result in “a large-scale layoffs” and significant “cuts to every operating area” at the business, which is currently looking for a new CEO. “Confident” that the cuts “will enable AMC Networks to come through this period even stronger and to be well positioned to drive future growth over the long term,” the board said of the company. With words that could send shivers up the collective media spine, he stated that the company had realized something about the streaming business: “It was our belief that cord cutting losses would be offset by gains in streaming.
Wall Street was clearly uneasy about the circumstances and the uncertainty surrounding Spade’s departure. According to Cowen & Company analyst Doug Creutz, her resignation came as “a complete surprise” and “leaves the company in need of new leadership, with no apparent successor in the wings.”

“It’s kind of been the same for a while; the top line is kind of shuffled along, and linear is still under pressure. They have been investing a fair amount of money in content, and if revenue doesn’t increase, margins will be under pressure. Creutz said, “It’s not just them.

Even as AMC, that

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