Fitch: AMC Acquisition of Chellomedia is Strategically Sound

  Fitch: AMC Acquisition of Chellomedia is Strategically Sound

Business Wire

NEW YORK -- October 30, 2013

The pending acquisition of Chellomedia (the international content division of
Liberty Global PLC) enables AMC Networks (AMCX) to expand its international
distribution capabilities and grow its international business, according to
Fitch Ratings. The proposed transaction is expected to boost AMCX's
international revenue generation to approximately 25% of total revenues,
providing business diversification that will strengthen the company's credit
profile.

International markets represent compelling revenue and cash flow growth for
AMCX as the company capitalizes on its global brands and leverageable content.
The demand for high-quality content by international broadcasters and pay-TV
providers positions media companies like AMCX to further monetize their
content in international markets.

This transaction provides AMCX with sufficient international scale and scope,
affording the company a wide spectrum of options regarding its international
distribution strategy. Chellomedia's television channels and cable networks -
most of which are movie and entertainment networks - reach approximately 390
million households in 138 countries.

AMCX can determine how to best monetize its increasingly popular original
content either through distribution on its own networks around the world or
through licensing agreements with international networks. Distributing
original content on its own networks enhances the value of the brands and the
networks, which will position AMCX to grow international affiliation fee and
advertising revenues.

Meaningful execution risks are associated with international expansion,
including differences in entertainment consumption trends, political
instability, uncertain or less developed regulatory regimes and variations in
competitive dynamics (state-owned competitors). However, Fitch believes this
risk could slow growth rates rather than pose significant operating pressures
as AMCX's international exposure is relatively modest at below 30%.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit
market commentary page. The original article, which may include hyperlinks to
companies and current ratings, can be accessed at www.fitchratings.com. All
opinions expressed are those of Fitch Ratings.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER
PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS
OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER
ON THE FITCH WEBSITE.

Contact:

Fitch Ratings
David Peterson, +1 312-368-3177
Senior Director
Corporates, Telecom and Cable
Fitch, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Kellie Geressy-Nilsen, +1 212-908-9123
Senior Director
Fitch Wire
Fitch Ratings, Inc.
or
Media Relations:
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com
 
Press spacebar to pause and continue. Press esc to stop.