AMC Agrees With AT&T to Keep Networks on Pay TV System
AMC Networks Inc. (AMCX), which airs “Mad Men” and “The Walking Dead” on cable television, gained the most in almost 11 months after reaching a deal to keep its shows on AT&T Inc. (T)’s U-verse pay-TV system.
The shares rose 10 percent to $39.20 at the close in New York, their biggest one-day gain since Aug. 11. AT&T advanced 1.5 percent to $36.20.
The agreement allows about 4 million U-verse customers to continue watching the AMC, IFC, We TV and Sundance channels, AT&T said yesterday in a statement. Financial terms weren’t disclosed. The accord is “long-term,” according to a statement yesterday from New York-based AMC.
AMC had been seeking “an excessive rate increase,” almost double what other competitors pay for the suite of networks, AT&T said before the announcement. The accord comes in time for U-verse customers to watch the season premiere of “Breaking Bad” on July 15, one of AMC’s highest-rated shows.
“We respect AT&T as a partner that has a genuine interest in working with us to ensure their customers continue to enjoy our programming,” AMC said in the statement.
AMC probably negotiated an increase in affiliate fees of more than 10 percent with Dallas-based AT&T, said David Joyce, an analyst at Miller Tabak & Co. in New York. The company can leverage the critical success of shows including “Mad Men” and “The Walking Dead,” the highest rated cable drama from Feb. 12 to March 18 this year, according to Nielsen data.
Dish Network Corp. (DISH) failed to reach an accord with AMC and replaced its channels at 11:59 p.m. on June 30, affecting 14 million customers. Englewood, Colorado-based Dish, the second- largest U.S. satellite-TV provider, threatened to drop the channels in May, saying AMC was charging too much for shows with limited viewership.
AMC contends that Dish is acting in response to litigation stemming from a 2008 lawsuit that may cost the satellite company $2.5 billion.
“The stock has gotten too cheap unless you believe Dish wins its lawsuit and never restores AMC,” Rich Greenfield, an analyst at BTIG LLC, said in an e-mail.
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