AMC Networks CEO: Scale "Less Critical" for Content Than Pay TV Companies

Josh Sapan declines comment on chatter about deal talks with Starz and says popular shows, or "the right stuff," are key and that social media has a "democraticizing" effect by helping people discuss and find programming they like.

AMC Networks CEO Josh Sapan told a TV industry convention in Cambridge, England on Thursday that he feels content companies need acquisitions to increase their scale much less than pay TV operators do.

He spoke at the biennial Royal Television Society (RTS) convention in Cambridge, which this year explores the topic of "Happy Valley or House of Cards? Television in 2020." 

Asked about his appetite for acquisitions in the face of Altice's agreement to acquire Cablevision Systems, which spun off AMC Networks a few years ago, and other recent pay TV combinations, Sapan said: "In the U.S., scale on the distribution side ... does seem to matter. I think it's less critical, by a long shot, on the content side. And we are a little bit of a test case." He called AMC Networks a smaller to medium U.S. player.

Discussing the success of AMC shows, he said "the stuff has risen up" despite the firm's limited size. If you "don't have the right stuff," size doesn't help, Sapan said. "There is this truly democratizing trend thanks to social media." The high and lower end strive in that environment, but "there is a mushy middle bad spot," the AMC boss said.

Sapan in his on-stage session, in which he was interviewed by BBC Worldwide CEO Tim Davie, didn't discuss recent chatter that AMC Networks was again looking at a possible deal to acquire Starz. Asked by THR about a possible Starz acquisition after his appearance, Sapan declined to comment and said deal chatter seemed to appear regularly these days.

There is no revolution, but an evolution of viewing behavior, Sapan also said Thursday during his appearance when asked about the debates about cord cutting and online video viewing.

Sapan also called subscription VOD players Netflix and Amazon "friend and foe," but said "there is broadly more sympathy" currently, but everyone must keep their eyes open. "I don't think the final diagnosis is yet in." He said ratings were boosted for key shows, such as The Walking Dead. The AMC boss summarized the effect: "Big shows are aided ... and shows that are marginal might not be aided and might be marginalized."

AMC Networks late last year struck a deal with the BBC's commercial arm BBC Worldwide to acquire a 49.9 percent stake in BBC America for $200 million.


"I don't think we have a magic sauce," Sapan said about the rise of the AMC network, adding the company focused on revering great content, much like the BBC. "The BBC was material for the wonder of material," he explained. In comparison, in the U.S., TV is "a business of numbers." He added: "For us, you are the godfathers of souls." Sapan said the strategy was to zig, while others were zaging.

"What the shows have in common is they build," he said about Mad Men, Breaking Bad and others. "We went for things that were different."

Discussing Mad Men, he said: "It was expensive as heck. It was quiet," and the company was anxious to see it build, which it did.

Asked what he does on a typical work day, Sapan joked: "not much." He said he credits the people he works with for the success of shows. His job is creating an environment, in which people like their work and feel they can take risks.

Discussing the recent drop of entertainment stocks amid cord cutting concerns, Sapan recalled how the company's stock was down 16 percent after its recent earnings call, a day after Walt Disney's call, in which it slightly lowered its financial forecast for ESPN. "It was probably a bit of an overreaction," he said. "It's possible that [some challenges for the industry weren't] adequately reflected" in stock prices." He noted that stock prices have since recovered a bit though.

Sapan reiterated that AMC Networks prefers owning content versus licensing it, so it can take it around the globe.

Other speakers at the RTS event, which is held through Friday, include Discovery Communications CEO David Zaslav, Michael Edelstein, president of NBCUniversal International Studios, Wayne Garvie, chief creative officer at Sony Pictures Television, ‎BBC director general Tony Hall and ITV CEO Adam Crozier.