AMC Networks CEO Says Scale Matters in Cable

Adam Kraus

"Big is better if it's really good stuff, and big is worse and is really a weight if it's not really good stuff," Josh Sapan told investors.

In today's competitive TV landscape, size does matter but only if your content hits with audiences, AMC Networks CEO Josh Sapan told investors on Thursday.

"Big is better if it's really good stuff, and big is worse and is really a weight if it's not really good stuff. You would rather not have that weight," Sapan told Gabelli & Company's Movie and Entertainment Conference during a webcast session. The AMC Networks boss, answering a question about John Malone and scale, told analysts that poorly performing content will "burden your fair reward for what you have that is performing."

To get scale, Sapan said AMC Networks has been building on the ratings success of The Walking Dead and its spinoff series, Fear the Walking Dead. The group has been growing as well, he added, with BBC America and the acquisition of Chellomedia.

Sapan was then asked if his company was one of American billionaire John Malone's free radicals, or target content producers in another round of industry consolidation. "I would say if it's a compliment, yes. If it's an insult, no," Sapan said in reference to the Liberty Global chairman's comments about successful industry players like Starz and Lionsgate that could be rolled up into a cable giant.

"I can't tell what it means. It may be both. It may be a mouthwash and a floor wax. It may be both an insult and a compliment. It's certainly ambiguous," he added about Malone's comments before talking more directly about scale. Sapan said the cable industry had a "reflexive bigger-is-better" attitude to surviving and thriving in today's media landscape.

"What's behind that is most often the notion of protection. If I'm big, I can sustain. If I'm big, I can protect my flanks and I won't have incursions that are unwelcome or unwanted," he said. Sapan characterized AMC Networks as a small-to-mid-size company, compared to rivals.

But he argued fast-evolving digital technologies has put more power in the hands of consumers, leaving networks hard-pressed to dictate taste to audiences. And that requires content producers to ensure they connect with audiences or suffer the consequences.

"Scale's good if the stuff punches at or above weight. Scale's bad if the stuff punches below weight," Sapan said.