AMC Networks CEO: AMC Is ‘Way Underpriced’ in Current Carriage Deals

6:46 AM PST 12/06/2011 by Georg Szalai

Josh Sapan tells a UBS investor conference that the channel deserves 75 cents per subscriber per month and says in terms of ad rates for his company’s networks, there is opportunity over the coming years "to be rewarded for what we put on the air today.”

NEW YORK – AMC Networks president and CEO Josh Sapan said here Tuesday at a big UBS media investor conference that current carriage fees for his company’s AMC network are too low given its addition of original programs in recent years.

“Our rates on AMC are particularly out of whack,” Sapan said at the UBS Global Media and Communications Conference, pointing out that key distribution deals were struck years ago. “AMC is quite a different channel in 2011 than it was in 2006, 2007 and 2008” when it had no originals. “AMC is way underpriced.”

At a minimum, AMC is a 75 cents per subscriber per month channel, he said, although “that is not the rate we will necessarily be paid tomorrow.” He emphasized he expects increases in carriage fees to be an evolutionary process.

Collins Stewart analyst Thomas Eagan said he estimates that AMC currently gets 40 cents to 50 cents per sub per month in affiliate fees. SNL Kagan estimates AMC got carriage fees of 25 cents per sub per month this year and will get 26 cents next year.

Asked about IFC, Sundance Channel and WE tv, Sapan said “the disparity is less on our other channels.”

Discussing ad rates for AMC Networks channels compared to other TV networks, including broadcasters, Sapan said the cable networks firm has made strides, but “we are hardly at full justice.” He added: “There is certainly opportunity over the next [years]...to be rewarded for what we put on the air today.”

Sapan said original shows will remain a focus for his company and once again hinted that AMC could get more non-scripted fare in the future. “We’re comfortable with five originals on AMC,” he said, but reiterated that there could be more non-fiction series launching next year following the success of Walking Dead talk series Talking Dead. Saying that the network has four such series in different stages of development, he emphasized that non-scripted shows can come at costs that are only 15 percent-25 percent of the cost of scripted series.

Asked about ad market trends, he said the scatter ad market continues to see “some tentativeness” as marketers are buying much closer to airtime.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

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