Charter and AMC Reach Early Renewal Agreement
Charter Communications and AMC Networks announced on Wednesday that they have reached an early renewal of their distribution agreement. This deal allows Charter to continue carrying AMC’s portfolio of linear cable networks for multiple years. Following the news, AMC’s stock experienced a slight increase.
The financial terms and exact duration of the agreement were not disclosed. However, the announcement included key details about how AMC+ will be integrated into Charter’s service offerings.
Charter and AMC Agreement: AMC+ Streaming Service Added to Spectrum TV
As part of the Charter and AMC agreement, AMC’s ad-supported streaming service, AMC+, will be available at no additional cost to Spectrum TV Select customers. This provides Charter’s subscribers with more content options without raising subscription fees.
Additionally, Charter will offer AMC+ to its internet-only customers. This move follows a growing trend in the industry to expand streaming service availability beyond traditional TV subscribers.
Expanded Value for Charter Customers
The renewed agreement promises more value for Spectrum TV customers. In a statement, Charter noted that its Spectrum TV Select Plus customers would now receive over $40 per month in retail value for streaming apps. Additionally, Spectrum TV Select and Select Signature customers would benefit from more than $30 per month in retail value.
This added value aligns with Charter’s strategy to enhance its service offerings by incorporating popular streaming platforms. The deal mirrors the structure of Charter’s 2023 agreement with Disney, which also focused on integrating streaming services like Disney+, Hulu, and ESPN+ into its customer packages.
AMC Networks’ Content Remains Accessible
With this renewed agreement, Charter’s video customers will continue to have access to AMC Networks’ popular portfolio. This includes BBC America, SundanceTV, and popular shows such as The Walking Dead and Interview with the Vampire. The partnership ensures that Spectrum customers will continue enjoying these fan-favorite channels without interruption.
A Notable Deal Amid Industry Tensions
The timing of the Charter-AMC agreement comes as other major players in the industry face distribution challenges. Recently, Disney and DirecTV failed to reach a new distribution deal, resulting in over 11 million DirecTV subscribers losing access to ESPN, ABC, and other Disney-owned networks. In contrast, Charter’s successful renewal with AMC offers a positive example of companies finding common ground to benefit their subscribers.
AMC Networks: Financial Overview and Stock Performance
AMC Networks currently holds a market cap of $1.72 billion, with trailing twelve-month (ttm) revenue of $4.49 billion. Despite its sizable revenue, the company reported a net income loss of $366 million, resulting in a negative earnings per share (EPS) of -1.51. With 361.35 million shares outstanding, AMC’s stock does not currently have a price-to-earnings (PE) ratio due to its negative earnings. The stock opened at $4.72 and traded in the $4.72 to $4.83 range on the day of the Charter deal announcement. Over the past 52 weeks, AMC’s stock has fluctuated between a low of $2.38 and a high of $11.88. Analysts maintain a “Sell” rating, with a price target of $5.64, representing an 18.36% potential upside. The latest earnings were released on August 2, 2024.
Looking Ahead
As competition in the streaming and cable industry intensifies, distribution deals like the one between Charter and AMC are becoming increasingly crucial. By securing popular content and adding value through streaming services, Charter aims to retain and grow its customer base.
The renewal reflects broader trends in the industry, where traditional cable companies are expanding their streaming offerings to meet changing consumer preferences.
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