Just three months after assuming the role of CEO of AMC Networks, Christina Spade is stepping down.
AMC Networks’s board is “currently finalizing who (sic) it will name as a replacement, with an announcement to follow,” the company said in a statement yesterday (Nov. 29).
AMC Networks appointed Spade executive vice president and chief financial officer in January 2021. This year, in September, Spade took over from interim CEO Matt Blank. (Blank had, in turn, temporarily replaced Josh Sapan, who held the position for 26 years before becoming executive vice chairman at the company.) Spade was tasked with helping shift the company’s priorities from its cable business to streaming.
Like Disney, AMC Networks wants to make more money from streaming
AMC Networks has been amping up focus on its AMC+ streaming platform, as well as its niche streaming services like Shudder (horror), Acorn TV (British and international shows), Sundance Now (prestige drama, international thrillers, true crime, and more), ALLBLK (“inclusively, but unapologetically” black), and HIDIVE (anime).
“This kind of focused approach might give the business model an edge over the existing players, as the company has very trendy and attractive content which might bring considerable subscribers to the AMC streaming platform,” the Enthusiastic Investors Club wrote for Seeking Alpha.
But these efforts are yet to bear fruit. Streaming subscription numbers are exhibiting double-digit growth, but revenues are falling. As AMC faces industry-related pressures and economic headwinds, the C-suite ousting is only the start. Trims to its overall workforce are in the offing.
AMC Networks is not the movie chain, it’s a cable TV company
AMC Networks is unrelated to the movie theater chain—and meme-stock darling—AMC Entertainment. It is a cable TV company that’s home to channels like AMC, BBC America (a joint venture with BBC Studios), and more. The maker of popular series like “Mad Men,” “Breaking Bad,” and “The Walking Dead,” AMC Networks has a $3 billion market cap—way smaller than the $30 billion market cap of AMC Entertainment.
As legacy cable channels are dying out for myriad reasons—high costs, competition from streaming, consumers consuming content on the go—AMC Networks has struggled to adjust.
The company has tried to join forces with bigger firms to help its business. In June, AMC signed a distribution agreement allowing Amazon Prime Video to show AMC series to subscribers across 28 countries and territories. Last month, YouTube opened up a virtual storefront to resell subscriptions to 34 streaming platforms, including AMC+.
Where AMC Network stands, by the digits
1,000: The number of US employees at AMC Networks.
20%: The share of the company’s workforce that will reportedly be laid off
11.1 million: The number of subscribers across AMC’s streaming services. Disney+ has more than 10 times as many, and Netflix and Amazon Prime have 20 times as many.
63%: The fall in AMC Network’s share price over the last year. The stock underperformed the US media industry, which returned -34.7% over the past year, as well as the US market, which returned -20.5% over the past year, as per market analytics firm Simply Wall St.
-14.2%: The decline in AMC Networks’ earnings over the last five years
-4.5%: The projected annual decline in AMC Networks’ earnings over the next three years
153.4%: AMC Networks’ debt-to-equity ratio, high enough to be a risk to growth
$7 million: Christina Spade’s total compensation, including annual salary, cash bonuses, and stock options
11.4 years: Average tenure of AMC Networks’ board members, making them an experienced bunch
200+: The number of unique streaming services in the market. Only a dozen or so have gained prominence.
Charted: AMC Networks’ stock market tumble
Quotable: AMC Networks’ monetization plans are “in disarray”
“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.”
- Excerpt from a memo that James Dolan, CEO of AMC’s parent company MSG Entertainment, sent to the staff, as obtained by IndieWire
AMC Networks is not the only one feeling the streaming pressure
After the pandemic-fuelled boom subsided, the entertainment industry has not been able to sustain the same monumental growth. Companies have had to shuffle management, reduce headcounts, and temper the expectations of shareholders.
Warner Bros and Discovery
Since the Warner Bros-Discovery merger was completed in April, costcutting has been a top agenda item—and employees are bearing the brunt. There have been several layoffs across various departments including Warner Bros television, the HBO and HBO Max teams, ad sales operations staff, and IT personnel.
Separately, content is also on the chopping table. By the summer of 2023, Warner Bros’ HBO Max and Discovery+ will merge into a single streaming service, likely to cut back on original programming and the expenses that come with it. Since the April merger, the company has reportedly cut back on $825 million worth of content, including shelving the $90 million Batgirl after it was shot.
After Disney brought back former CEO Bob Iger to pull its loss-making Disney+ streaming service out of the doldrums, he doubled down on the hiring freeze at the company. Layoffs are reportedly on the table, too.
Netflix laid off 150 staffers in May, and another 300 in June. In the first two quarters of the year, it was bleeding subscribers because of stiff competition and password sharing. It rebounded in the second half of the year, and started an ad-supported tier of subscriptions to boost revenues. It also has plans to turn one weakness into a strength: Starting in early 2023, Netflix will start charging for password sharing.
In October, Criterion—an industry leader in manufacturing laserdisc, DVD, and Blu-ray editions of prestige movies, which launched a streaming service in 2019—dismissed 16 of its 80 employees.
Nexstar and the CW
In November, a month after Nexstar closed its acquisition of the CW, it laid off between 30 and 40 people. The CW’s CEO, Mark Pedowitz, who had been leading the channel since 2011, was among the first to leave on the day of the acquisition.
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