Settlement also sparks Dish's stock
AMC Networks and Cablevision stock hit new 52-week highs Monday as they prepare to split a $700 million cash payout from the court settlement with Dish Network.
Shares of the satcaster also bounced higher on the heels of the deal announced Sunday that restores AMC, IFC and WeTV to Dish’s 14 million subs after a blackout of nearly four months. Dish will also add AMC’s Sundance Channel and the Fuse music net owned by Madison Square Garden Co., run by Cablevision CEO James Dolan.
AMC was back Sunday. IFC, WeTV and Sundance will start airing on Dish on Nov. 1, but the channel position hasn’t been announced. Style Network had moved into WE’s slot.
The lawsuit over the now-defunct Voom channels had been hanging over all parties, and Wall Street cheered the agreement, sending AMC stock up 4.2% at its high Monday to $47.45. Dish rose 3.1% to $36.57, and Cablevision firmed 2.5% to $18.86.
The AMC and Dish stocks waged mini-rallies late last week after New York State Supreme Court Judge Richard Lowe adjourned court for three days. Proceedings were set to resume today but investors figured a settlement was more likely.
Analyst Alan Gould of Evercore Partners figures Dish reps 9% of AMC’s revenue, 22% of its cash flow and 30% of its earnings per share.
A major positive is “that AMC is now in a better position for other affiliate negotiations now that Dish has been renewed,” he said. “Solving the dispute was important for the AMC brand.”
In the meantime, Mark Cuban isn’t sweating a settlement that could bump his TV channels back up the Dish dial.
The deal this weekend between AMC Networks and Dish landed AMC channel 131 on the satellite system. AMC and IFC used to be at 130 and 131 before the carriage dispute this summer, when Dish replaced them with Mark Cuban’s HDNet Movies and AXS.TV.
“Actually, based on our conversations with Dish today, I think we will come out ahead in all of this,” Cuban said Monday. “HDNet Movies hasn’t moved, and I really like the plan Dish has for AXS.TV,” he said. AXS, which seems to have been bumped to channel 362, is backed by Cuban, AEG, Ryan Seacrest and CAA. “Dish is a great partner. When we are in a position to announce what is happening we will certainly do so,” Cuban said.
A Dish rep wasn’t immediately available to comment.
Dish had been sanctioned for destroying evidence in the case, was repeatedly scolded by New York Superior Court Judge Richard Lowe and was not making much headway at trial. It had leverage in a settlement after pulling AMC Networks channels from its systems last summer but also had an incentive to move fast after AMC’s “The Walking Dead” became the toast of the fall TV season. The zombie drama drew more than 10 million viewers for its season-three premiere this month.
Details of the carriage deal weren’t released, but it’s said to run for five years.
AMC will receive after-tax proceeds of about $191 million from the cash portion of the settlement.
The $700 million payout includes $80 million for Dish to buy wireless spectrum licenses in 45 U.S. metro areas
Cablevision sued Dish in 2007 after the satcaster dropped Voom, a suite of early high-definition channels, only two years into a 15-year carriage deal. The trial started Sept. 19, and Dish chairman Charlie Ergen had been expected to testify Monday. The settlement saved him a trip from Dish’s headquarters near Denver.