AMC Networks told its employees Tuesday that it is planning significant layoffs, according to people familiar with the matter and a memo obtained by CNBC.
The memo, sent by AMC Networks Chairman James Dolan, came shortly after the company announced that CEO Christina Spade stepped down from her role less than three months after being promoted to the position. The layoffs are expected to happen in the coming days and amount to about 20% of its U.S. staff, said one of the people, who was not authorized to speak publicly about the matter.
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AMC Networks had more than 1,700 full-time employees and 287 part-time employees as of the end of last year.
Spade’s departure and the layoffs come as AMC and the Dolan family contend with the best way to move the company forward as it deals with cord-cutting and a toughening ad market, said the people. The company is likely looking at an internal candidate for CEO, they added.
Earlier this fall, Spade held an off-site meeting with employees in which she noted layoffs wouldn’t take place until next year and the company would hire a consulting firm to further assess the business, the people said. However, shortly afterward, the company told employees it wouldn’t bring in a consulting firm and layoffs appeared to be imminent, the people said.
AMC Networks derives more than half of its revenue from the linear TV bundle, which has been bleeding customers as they opt for streaming services. Quarterly revenue had fallen 16% to $682 million in the period ended Sept. 30.
In Tuesday’s memo, Dolan called it a “confusing and uncertain time” for the TV industry.
“It was our belief that cord cutting losses would be offset by gains in streaming,” he wrote. “This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray.”
AMC Networks shares were down more than 4% Tuesday.
The company said in a statement that its board is finalizing its decision for Spade’s replacement.
“We thank Christina for her contributions to the company in her CEO role and her earlier CFO role, and we wish her well in her future endeavors,” Dolan said in the statement. AMC Networks is controlled by Dolan and his family, which also owns Madison Square Garden Entertainment.
Spade joined AMC Networks in 2021 as chief financial officer and a few months later was promoted to the dual role of chief operating officer and CFO. In August, less than a year later, the company announced she would take over as CEO.
The company, whose properties include its namesake cable network IFC, said in a regulatory filing Tuesday that Spade will receive her severance payment in accordance with her Aug. 4 employment agreement, which said she’d be eligible for it if terminated without “cause” or if she resigned for “good reason.”
Spade, an industry veteran who previously held top positions at ViacomCBS, CBS Corp. and Showtime, replaced interim CEO Matt Blank at AMC Networks.
Blank, the former chairman of Showtime, had taken over in 2021 after Josh Sapan left the company following a 26-year run that saw the network transform into a hitmaker with series such as “Mad Men” and “The Walking Dead.” AMC Networks recently announced further spinoffs of the original “The Walking Dead” series after it ended its run this fall, and has been releasing new shows based on late horror writer Anne Rice’s novels.
In recent years, AMC Networks has been seen as an acquisition target for larger media companies. In addition to its successful run of TV shows, it has niche streaming services such as AMC+ and the horror-focused Shudder.
The company said its paid streaming subscribers grew 44% from the prior year to 11.1 million as of Sept. 30.
AMC has also been eyed by NBCUniversal’s Peacock, which has approached various smaller streaming services about bundling their content, CNBC previously reported.
The Wall Street Journal earlier reported that layoffs would take place.
Read Dolan’s memo below:
AMC Networks Community:
As I am sure you are aware our industry has been under pressure from growing subscriber losses. This is primarily due to “cord cutting.” At the same time we have seen the rise of direct to consumer streaming apps including our own AMC+. It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray.
It is for that reason that myself and the Board of Directors of AMC Networks have concluded that we as a company need to conserve our resources at this time. We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks. We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood. We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community. However, it is imperative that we begin immediately with this new course of action.
The Dolan Family and the Board of AMC Networks have great pride in the company and products that you have created. This is a confusing and uncertain time in our industry. We are confident that AMC Networks will come through this even stronger. Your executive leadership will follow up with details shortly. We wish only the best for everyone in the AMC Networks community.
Sincerely,
James Dolan
Disclosure: Comcast’s NBCUniversal is CNBC’s parent company.
Source: https://www.cnbc.com/2022/11/29/amc-networks-ceo-stepping-down-after-less-than-three-months-.html