Pressure mounts on AMC Networks: CEO exits after less than three months, major layoffs coming

AMC Networks, known for the acclaimed “Mad Men” series and the lucrative “The Walking Dead” franchise, is facing mounting financial pressures to adapt more quickly to the streaming revolution that is upending the legacy cable TV business.

Those pressures came to a head Tuesday morning when the New York-based entertainment company announced that Christina Spade is stepping down from her role as chief executive of AMC Networks.

The move marked a stunning exit for an executive who had been tapped for the job less than three months earlier. The company, which has 1,700 employees, also signaled that significant layoffs were planned, in a sign of growing investor impatience with financial results.

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From zombies to vampires, can AMC Networks still go it alone?

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Sept. 20, 2022

AMC Networks stock dropped 5.3% Tuesday to close at $19.48 a share, down nearly 50 % this year.

The company — which owns cable networks AMC, Sundance TV, IFC, WE tv and several streaming channels — has faced headwinds as it attempts to navigate the transition from a traditional TV network provider to streaming. Pay TV cord-cutting has slowly chipped away at its core business.

In its statement, AMC did not give a reason for Spade’s abrupt departure.

But AMC Networks Chairman James Dolan offered a blunt assessment of the company performance.

Dolan, whose family has a controlling stake in the business, said that the revenue growth in streaming is not happening quickly enough to offset the losses in pay TV subscription revenue and advertising, and that “significant cutbacks” and large-scale layoffs in every area of the company were planned.

“It was our belief that cord cutting losses would be offset by gains in streaming,” Dolan said in the memo. “This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray.”

Investments in programming for its growing streaming services, combined with a slowdown in pay TV subscriber growth and a slumping advertising market, have squeezed AMC Networks.

Its consolidated operating income in the third quarter of 2022 declined by 14% to $194 million. Revenue during the period fell 16% to $682 million.

As the demand for advertising time is softening across the industry, the environment is likely to get even more difficult for AMC Networks. The company has stubbornly remained independent despite speculation that it would be an acquisition target as media conglomerates are looking for more programming and scale.

Doug Creutz, an analyst at Cowen, said in a note to investors that Spade’s departure was “a complete surprise” and that AMC shares will be under pressure until its clear to Wall Street that the move was “not related to any financial-related issues.”

AMC is hardly alone in being under pressure to remain profitable while investing heavily in its streaming business, which currently has 11 million subscribers.

Heavy losses at Disney+ were cited as one of the main reasons for the recent ouster of Walt Disney Co. Chief Executive Bob Chapek, who was replaced by his predecessor Bob Iger.

Spade, 53, the company’s former chief financial officer, was elevated to the CEO job on Sept. 9. She succeeded Matthew Blank, a longtime cable executive who filled the role on an interim basis after Ed Carroll stepped down.

AMC has long been the home of the “Walking Dead” franchise, one of the most watched series on TV. It had its series finale this month.

The company has the rights to the works of author Anne Rice and recently launched a series based on her novel “Interview With the Vampire.” A second series, “The Mayfair Witches,” has also been announced.

Previously, Spade was chief financial officer at CBS Corp. before its merger with Viacom. She retained her role there after the companies were combined. She spent 21 years in various roles at Showtime.

The company’s board of directors is finalizing whom it will name as a replacement for Spade, AMC said in its statement.

AMC has been dealing with turnover in its creative ranks in recent years, with Sara Barnett stepping down in 2020 as president of AMC Networks Group just 18 months after succeeding Charlie Collier. Veteran programming executive Dan McDermott took over in October of last year.