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With TV industry veteran Josh Sapan leaving his president and CEO titles at AMC Networks after 26 years to become executive vice chairman, it’s the end of an era for the TV and streaming company behind the likes of The Walking Dead home AMC and horror streamer Shudder. But at this moment of transition, some Wall Street experts also wonder if an often-suggested potential sale of AMC Networks could materialize as the company searches for a new, permanent CEO.
Sapan’s lengthy tenure saw him lead, or address, broader industry trends. In late November of 1995, when Sapan was named chief of Rainbow Media after joining the company in 1987, he was stepping in for James Dolan. The firm was a unit of Cablevision Systems that included networks like American Movie Classics, Bravo, Independent Film Channel and SportsChannel.
The executive led through the growth of cable networks — including SundanceTV and We TV — transitioned Rainbow Media’s spinoff from cable operator Cablevision as content and distribution businesses went their separate ways, and oversaw the company’s name change to AMC Networks. Sapan honed in a focus on high-end drama at AMC that made it the belle of the premium TV ball. More recently, the exec led on international growth and development of streaming services, such as Acorn TV, Allblk and AMC+, and plotted a “boutique” subscription growth plan.
Several analysts lauded Sapan as a key figure in what has often been called the dawning of the “golden age of TV.”
“Sapan’s tenure is due much respect as he re-wrote the rules of cable, turning AMC into a prestige powerhouse,” Wells Fargo analyst Steven Cahall wrote in an Aug. 24 report. “In our view, Mad Men was a groundbreaking series culturally, but also for the media industry as such prestige dramas had previously only been the domain of premium networks like HBO. Sapan and team followed up Mad Men with numerous hits, including Breaking Bad, The Walking Dead, Better Call Saul, Killing Eve, The Night Manager, Brockmire etc., thereby recasting AMC Networks’ cable networks into proper premium channels with strong brand recognition.”
Moody’s analyst Neil Begley echoed that notion. “His whole M.O. was really about creating the basic cable version of HBO, and he did it with remarkable success,” Begley tells The Hollywood Reporter. “They just really hit it out of the park, for years really punching well above their weight class in terms of content selection and growing distribution.”
Former Showtime Networks CEO Matthew Blank will take over as interim CEO while the company searches for a full-time successor. Cahall lauded him as a “veteran for premium content, including stints at HBO” and 20 years as chairman and CEO of Showtime. Wall Street observers also mentioned AMC Networks COO Ed Carroll as among the possible CEO candidates internally.
Sapan, 70, as part of a two-year contract extension in December 2020, got the option to segue from president and CEO to the vice chairman role in 2022. But in a regulatory filing on Aug. 24, AMC Networks said that time frame had been moved up and also mentioned that Sapan was set to work on films. An amendment to his employment contract states that “in each of the 2023 and 2024 calendar years, the company shall acquire at least three films from those submitted by Mr. Sapan.”
But the accelerated time table of his exit from the CEO role and the fact that Blank’s contract was for one year made some Wall Street observers wonder if the executive change may mean that a sale could be in the firm’s future.
Hal Vogel, CEO of Vogel Capital Management and a former entertainment industry analyst, noted that AMC, controlled by the Dolan family, has for a long time been seen as a potential takeover subject because of its attractive content and brands, as well as its lack of size in a fast-consolidating media sector. About the interim CEO solution with Blank, Vogel noted: “I guess, without any knowledge, that this might be the opening round to selling the company.”
Taking the reins of the company will provide a range of challenges. “Sapan will be remembered for his show-picking prowess,” highlighted Cahall. “AMC Networks has historically had a great batting average for content. Unfortunately, some key series are drawing to a close (e.g. the flagship The Walking Dead), the world is making the streaming pivot expensive and content ‘scale’ continues to be a redefining term as the big get bigger.” (To that point, The Walking Dead fell to its smallest ever linear premiere on Aug. 22 with 2.2 million viewers, down from 4 million for season 10.)
Cahall added: “We think Sapan’s successor will face the challenge of carving out a niche for the company in the next era as numerous services look to encroach on consumers’ time for original productions.”
That is another reason AMC Networks has often been seen as a takeover target for entertainment or technology giants. Sapan, however, has often argued the company is doing well in its niche, emphasizing the benefits of going it alone as a more focused company.
“We actually feel better than ever,” Sapan told THR in an interview earlier this year. “We have always been about curation and about doing things selectively. We have never said, ‘We’re going to go out and be the big monster of this.’ It’s not what we have set out to do in linear or in streaming, actually the opposite. In a certain sense, our size is an advantage, because we can have high impact on our business.”
Given that, Peter Csathy, chairman of advisory firm CreaTV Media, also saw Sapan’s exit as a natural time for AMC Networks to open up to takeover approaches or a new type of leader. “AMC is either signaling to the Street that it is ready to sell or is trying to do a ‘Kilar’ [as in AT&T’s WarnerMedia CEO Jason Kilar] — or hedging its bets by doing a little of both,” he tells THR. AMC may use the transition period with Blank in charge to “signal openness” given that “we are in the midst of a media [deal] frenzy right now.”
If a sale doesn’t happen though, AMC could keep going it alone in what Csathy calls “the Kilar 2.0 plan.” The company could in that scenario “look for young digital-native blood” to lead it after Blank’s one-year interim position ends. That could mark a “quintessential changing of the guard and proclamation that AMC Networks is ‘all in’ on media’s new world order,” argues Csathy.
Begley also suggests that AMC Networks could consider more techy or otherwise different types of CEO, beyond premium content veterans like Blank, in its search. “You can’t help but think that some bold moves are going to need to be made down the road here,” he explains. “And finding the right person to make those decisions is going to be critical for the company.”
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