AMC has engineered one of the biggest programming deals in its history, spending around $80 million for 22 theatrical movies from Warner Bros., including the upcoming “Batman Begins,” “Two Weeks Notice,” “Million Dollar Baby,” “The Last Samurai” and “Terminator 3.”
Warner Bros. pic deal marks AMC’s first plunge into buying theatricals right after their first pay window. By springing for the package in this network window, AMC puts itself in direct competition with such top 10 cablers as TNT and USA, which owe much of their success to theatrical movie ratings.
But the deal could be even costlier to AMC than the $80 million in license fees. Ironically, the Warner Bros. movie purchase — which includes several unnamed titles that won’t bow until 2006 — goes to the heart of litigation currently under way between AMC and Warner Bros. sister company Time Warner Cable over AMC’s programming.
AMC may be reinforcing claims made by Time Warner Cable in November 2003 that AMC breached its contract by shifting its programming from classic titles — AMC originally stood for American Movie Classics — to pics from the last few decades.
Should AMC lose the case, it may have to renegotiate its contract with TW Cable at much lower rates than the current deal or face losing more than 10 million subscribers.
But the strategy, thus far, has paid off in the ratings, said Rainbow Entertainment Services prexy Ed Carroll. For the first quarter, AMC averaged 407,000 viewers in primetime in adults 18-49 — an increase of 15% vs. a year earlier.
The movie output deal took more than a year to put together, but Warner Bros. Domestic Cable Distribution prexy Eric Frankel insisted the lawsuit “was never an issue in our negotiations.” AMC declined to comment on the suit.
The $80 million license fee is a loose estimate, because the total deal, which could go north of $100 million, is based on a percentage of the domestic box office, and some of the titles on the deal have not yet reached theaters.
Separately, AMC has inked an exclusive agreement with Paramount for 32 John Wayne films, including digitally remastered editions of “The High and the Mighty” and “Island in the Sky,” two movies that haven’t aired on TV in more than 25 years.
In December, Warner Bros. sold a package of recent pics, including many titles in the AMC deal, to Oxygen for approximately $65 million (Daily Variety, Dec. 14). Frankel said at least one other network would be part of the deal and that the AMC agreement allows an additional carve-out for individual titles to be run on a broadcast net.
AMC has bought two-year license terms for the 22 Warners movies, getting the first plays on a number of titles, including “Two Weeks Notice,” “Million Dollar Baby,” “The Last Samurai,” “Ladder 49,” “T3,” “Insomnia,” “The In-Laws,” “Gothika” and “Catwoman.”
Among other movies in the deal are “Ocean’s Twelve,” “Raising Helen,” “Mystic River,” “Starsky & Hutch,” “Constantine,” “Troy,” “Murder by Numbers,” “Exorcist: The Beginning” and “Alexander.”
Deal reps AMC’s biggest commitment to getting contemporary titles on the air. “It’s not our biggest deal in terms of volume or even dollar amount, but it’s our most meaningful acquisition,” Carroll said.
AMC plans to make a big splash with the first title from the package, “Two Weeks Notice,” which will premiere in a three-peat weekend beginning June 10. Pic will play Friday, Saturday and Sunday at 8 p.m. — a strategy Turner has employed successfully with both its original and acquired movies.
“This is our first and biggest commitment to getting first network product so far,” Carroll said. “It rounds out AMC’s movie offerings, which focus on the last five decades, and gives us an incredible opportunity to broaden our appeal.”
He added that AMC wasn’t focusing exclusively on new movies, noting the net’s top-rated movies on any given night include a diverse grouping that ranges from “The African Queen” to “The Breakfast Club.”
Frankel described the buy as “a natural progression” for AMC.
“They were a classic-movie channel, then a classic and recent movie channel, and now they’re in the business of hot, new premieres. We’ve seen their ratings go up 40% over the last two years. Once these firstrun pics hit the air, the sky’s the limit,” Frankel said.
As for the John Wayne titles, Carroll said the acquisition was key for core viewers. The last time the cabler programmed a Wayne stunt, it averaged 725,000 households. Par will release “The High and Mighty” and “Island” on DVD after their Aug. 2 premiere on AMC.
Other titles in the deal include “Hondo,” “El Dorado,” “The Shootist,” “Sons of Katie Elder,” “True Grit,” “Hatari,” “Donovan’s Reef” and “Flying Tigers.”