Issue 3 BIZ Exec Suite Josh Sapan - H 2013
Adam KrausRLJ Entertainment, the entertainment company distributing content mainly in North America, the U.K. and Australia whose chairman is BET founder Robert Johnson, on Monday announced it has finalized a $65 million investment deal that gives AMC Networks the option to take a controlling stake in the company down the line.
RLJ’s businesses include branded OTT channels Acorn TV, focused on British TV, and UMC, the Urban Movie Channel.
In a regulatory filing earlier this year, RLJ said it has struck an investment agreement with AMC Networks unit Digital Entertainment Holdings, under which AMC will provide a $60 million seven-year term loan and a $5 million one-year term loan to the company. The deal is now completed. RLJ in turn has granted AMC warrants to purchase at least 20 million shares of the company’s common stock in the deal, or a 50.1 percent controlling stake. A warrant is a derivative that gives the right, but not the obligation, to buy stock.
AMC, led by CEO Josh Sapan, has designated two directors to the company’s board of directors. They are John Hsu, executive vp, treasurer & financial strategy of AMC, and Arlene Manos, president of national advertising sales of AMC.
Upon the full exercise of the warrants, AMC will have the right to designate at least a majority of the company’s board. RLJ’s board currently has seven members, including Johnson and CEO Miguel Penella.
AMC Networks has made investments in the digital space in recent years, including in dance entertainment-focused YouTube network DanceOn and Latino-focused digital media firm MiTu.
Johnson created RLJ Entertainment in 2012 when one of his companies agreed to acquire Image Entertainment and Acorn Media Group to create “one of the largest independent distributors of digital and video content globally.”
RLJ owns a 64 percent stake in Agatha Christie Ltd., which manages the intellectual property and publishing rights to the creations of the writer behind such characters as Miss Marple and Hercule Poirot. RLJ also has acquired North American rights for such movies as Pierce Brosnan’s I.T., Ethan Hawke’s baseball movie The Phenom, Western Bone Tomahawk starring Kurt Russell and horror movie The Mind’s Eye.
“I am both delighted and excited that RLJ Entertainment is joining with the AMC Networks family to help capitalize on the opportunities that exist to provide consumers with more diverse content across multiple platforms,” Johnson said in a statement. “RLJ Entertainment has a leading position, through Acorn TV with British television programming, and through UMC with quality urban-focused content, and independent films that we will be able to further develop and grow with the capital and support of AMC Networks.”
Said Sapan: “We have deep respect for Bob Johnson and the many businesses he’s built, from BET to Acorn TV and UMC. Bob is a talented entrepreneur with a real understanding of the power of strong brands and a proven ability to identify and provide premium content to a wide range of audiences by tapping into the demand for content that uniquely fits their specific consumer interests. Much like the early days of cable, and AMC Networks’ own history of providing quality programming to targeted audiences, RLJ Entertainment’s Acorn TV and UMC appeal to consumers with quality programming that represents diverse voices.”
He added: “Our investment is a strategic opportunity to provide capital and additional resources to RLJ Entertainment as they continue to explore their many opportunities for growth, and while we consider the many potentially powerful synergies with our innovative partners at the BBC, and our own WE tv network.”
