AMC Networks Inc., the cable-TV home of “The Walking Dead,” acquired a 49.9 percent stake in BBC America for $200 million, forming an alliance that will bolster both networks in negotiations with pay-TV carriers.
The agreement with BBC Worldwide, the commercial arm of government-backed British Broadcasting Corp., is structured as a joint venture, according to a statement yesterday. AMC will run BBC America, including affiliate and advertising sales, while adhering to BBC editorial standards. A joint editorial committee will ensure that.
The deal brings BBC America series like “Doctor Who,” “Top Gear” and “Orphan Black” under the same roof as AMC shows that include “The Walking Dead” and “Mad Men.” AMC Networks, which owns the AMC, Sundance and IFC channels, will include BBC America when it negotiates for fees, giving both players more bargaining heft against pay-TV operators that are consolidating to help restrain rising content costs.
“We will be essential to distributors because we will be essential to their customers,” AMC Chief Executive Officer Josh Sapan said in a phone interview. “With that, you can get pricing power.”
Both New York-based AMC and BBC America produce critically acclaimed shows, many of which, such as “Orphan Black” and “Mad Men,” are viewed by the most affluent audiences in the U.S.
Comcast Corp.’s $45 billion plan to purchase Time Warner Cable Inc. and AT&T Inc.’s $48.5 billion deal for DirecTV are challenging network owners to expand to gain leverage in fee discussions with distributors.
Bloomberg News reported in July that AMC was in talks for a stake in BBC America, and last month said the $200 million deal was close.
BBC America is available in about 80 million U.S. households, according to its website. AMC and BBC have worked together before, including co-producing shows such as “Top of the Lake” and “The Honourable Woman,” an eight-part series on AMC’s SundanceTV. They agreed to continue jointly pursuing projects.
“This is an opportunity to grow the creative quality and ambition from an already high base,” BBC Worldwide CEO Tim Davie said in a telephone interview.
The deal will also help the BBC World News channel reach more viewers in the U.S., Davie said. As part of the agreement, AMC will represent the channel in negotiations over U.S. distribution and domestic advertising sales. BBC World News is available in more than 30 million U.S. homes.
AMC Networks, controlled by the Dolan family, fell 0.5 percent to $58.44 at the close in New York yesterday, giving the company a market value of about $4.21 billion. The stock has declined 14 percent this year.
--With additional reporting from Bloomberg reporter Alex Sherman in New York.