Doctor Who has fought Daleks, Silurians and Cybermen. Now he’s going to be teaming up with flesh-eating zombies in hopes of conquering Madison Avenue and merging cable behemoths.
AMC Networks, which has found much success with its apocalyptic zombie-invasion drama “The Walking Dead,” said it would invest $200 million to buy a 49.9% stake in BBC America, the U.S. cable network that is part of BBC Worldwide, and home to series such as “Orphan Black” and the aforementioned sci-fi franchise. As part of the deal, AMC Networks will have operational control of the network, including affiliate and advertising sales, and will consolidate the results of the joint venture in its financial statements. The companies said BBC Worldwide will retain a 50.1% stake in the joint venture, and that AMC would run BBC America ” consistent with BBC’s editorial standards and policies.”
The investment, which has been expected for some time, gives AMC Networks another network in its portfolio known for high-quality, edgier drama – the kind that has helped fuel ratings at networks like FX as well as AMC’s flagship channel. While AMC has found great success with dramas like “Mad Men” and “Breaking Bad,” it has been working to bring greater viewership to other networks like IFC, We TV and Sundance. The company recently revamped both Sundance and We TV.
The deal comes as media companies of all sizes have been seen to be under pressure as big video distributors like AT&T and DirecTV or Comcast and Time Warner Cable seek to merge. Programmers are likely to seek more heft so they have parity when trying to strike distribution deals and offer advertisers a passel of media properties that can attract broad audiences as well as distinct niches of demographic. Earlier this year, 21st Century Fox made an unsolicited – and subsequently rebuffed – bid for Time Warner in hopes of gaining more size. Meantime, companies that operate just one or a handful of TV networks have been seen as likely to have less leverage in affiliate negotiations.
Executives at both companies portrayed the arrangement as one borne out of a desire to gain greater reach for premium content that attracts high-income audiences. “We think that we have had some experience and some success with shows like that, and the BBC is probably the greatest resource on the planet” for top-quality content, said Josh Sapan, AMC Networks President and CEO, in an interview, whether that be in news, drama, or comedy.
The two sides have worked together in the recent past. The two have collaborated on series including “Top of the Lake” and” “The Honourable Woman” as well as the coming program “One Child.” AMC Networks and BBC Television have agreed to continue to jointly pursue a number of content investment opportunities on a range of future projects, both through BBC America and other AMC Networks channels. BBC America is to be managed as a standalone asset within AMC’s portfolio.
“The value of premium content and smart television is going to grow,” said Tim Davie, chief executive of BBC Worldwide, “and we felt that there was a really compelling logic to create a company that has scale in the area of smart television.” By combining assets, the two companies felt they could better attract producers and actors, the two executives said.
AMC will represent BBC World News in U.S. distribution and domestic advertising sales.
BBC Worldwide North America, the unit that has included BBC America, will continue as a wholly owned regional business within BBC Worldwide, focused on program and format sales and co-production relationships, scripted and unscripted production, consumer products, digital and live events.
The two companies originally came together to discuss how they might work more closely in content production, since they seemed to share a similar editorial vision, both executives said. And as those talks commenced, the business opportunity eventually presented itself.
[Updated, 4:28 PM PT]