×
You will be redirected back to your article in seconds

AMC Networks to Acquire Robert Johnson’s RLJ Entertainment in Deal Worth $60 Million

AMC Networks announced a deal to acquire majority control of RLJ Entertainment, the streaming-oriented company headed by Robert Johnson, in a deal valuing RLJ at about $60 million.

RLJ Entertainment operates two streaming-subscription services aimed a niche audiences: Acorn TV, which features British television and film content, and UMC (Urban Movie Channel).

AMC is offering about $16 million to buy the shares of RLJ Entertainment it doesn’t currently own and are not affiliated with Johnson, who previously founded BET Networks.

The deal comes after AMC invested $65 million in RLJ last fall to take a 26% stake in the form of loans (which have subsequently been increased to an aggregate of $78 million). That agreement gave AMC the option to purchase majority ownership, and on Monday AMC said it will acquire the 27% of the outstanding shares in RLJ Entertainment that it doesn’t already own for a purchase price of $4.25 per share in cash. Johnson will retain a minority stake in the company; he currently owns approximately 47% of the outstanding shares of RLJ Entertainment common stock.

Shares of publicly traded RLJ Entertainment popped 9.8% Monday, to the $4.25-per-share price being offered by AMC Networks.

For the third quarter of 2017, RLJ Entertainment reported net revenue of $20.9 million, up 13.9% year-over-year, driven by a 58.6% increase in digital channels revenue. It posted a net loss of $2.7 million, versus a net loss of $4.0 million in Q3 of 2016.

In January, RLJ Entertainment announced that its two streaming services, Acorn TV and UMC, had topped 700,000 subscribers, up 55% from a year earlier and an increase of 13% from Sept. 30, 2017. The Silver Spring, Md.-based company also distributes titles in multiple formats including on broadcast and pay TV, DVD, and digital platforms in North America, the U.K., and Australia. In addition, through its U.K.-based Acorn Media Enterprises development arm, RLJE co-produces and develops new programs and owns 64% of Agatha Christie Ltd.

Under the pact, AMC said it would run RLJ Entertainment as a privately owned subsidiary of AMC Networks, with a minority stake held by Johnson. In announcing the deal, AMC Networks said it “has no interest in disposing of its stake in RLJ Entertainment or participating in any other strategic process.”

For AMC, RLJ Entertainment is part of its ongoing push into online-streaming and original digital content.

AMC took a minority stake in Funny Or Die last year and led a $16.5 million round of funding in upstart digital studio Adaptive Studios. It operates the Shudder and SundanceNow over-the-top service and AMC Premiere, a commercial-free subscription service offered as an option to pay-TV subscribers.

AMC’s proposed takeover of RLJ still requires the approval of RLJ Entertainment’s board. AMC Networks said it expects the board of directors of RLJ to form a special committee of independent directors to consider the proposal. Neither Johnson nor RLJ directors nominated by AMC Networks will participate in the evaluation of the proposal.

AMC Networks enlisted Citigroup Global Markets as financial adviser and Sullivan & Cromwell as legal counsel in connection with the transaction.

Pictured above: Josh Sapan, AMC Networks president and CEO (left) and Robert Johnson

More Biz

  • MAGA Teens Taunting Native American Elder

    MAGA Hat-Wearing Teens Harassing Native American Elder Spark Condemnation From Hollywood

    The Internet erupted in outrage Saturday after a video of young men wearing MAGA hats and attempting to intimidate a Native American man at the Indigenous Peoples March in Washington D.C. went viral. The march is taking place amid the government shutdown, which is nearing the one-month mark and has interfered with many Native Americans’ [...]

  • Leonard Klady Dead: Film Journalist Was

    Leonard Klady, Veteran Film Journalist, Dies at 67

    Leonard “Len” Klady, a former Variety reporter and critic who most recently worked for Movie City News and Screen International, has died. His wife, Beverly Walker, said he had been diagnosed with cancer in November.  Klady was born in Winnipeg, Manitoba and graduated from the University of Manitoba. He was a founding member of the [...]

  • Jordan Feldstein

    Roc Nation Seeks $11 Million From Insurer in Jordan Feldstein's Death

    Roc Nation filed a federal lawsuit Friday seeking $11 million from its insurance carrier following the death of Maroon 5 manager Jordan Feldstein. Roc Nation, a joint venture of Jay-Z and Live Nation Entertainment, partnered with Feldstein’s Career Artist Management in 2016. At the time, Roc Nation says it took out a “key man” life [...]

  • Walt Disney HQ LA

    Disney Unveils Financial Data for DTC Unit, Sets April 11 for Investor Presentation

    Disney has rejiggered its business segments for earnings reporting to make room for the new unit housing its global streaming operations. Disney on Friday released restated earnings for fiscal 2018, 2017 and 2016 to give investors and financial analysts better visibility into its spending on the launch of the Disney Plus, ESPN Plus and other [...]

  • R. Kelly

    R. Kelly Dropped by Sony Music

    Sony Music has decided to dissolve its working relationship with R. Kelly, Variety has learned. No external announcement of the move is planned in the immediate future, says a source, who added that the company took its time to wade through the issues “responsibly” and avoid legal ramifications. R. Kelly was removed from the RCA [...]

  • CAA HQ LA

    Ex-Agent Stuart Manashil Ordered to Repay CAA in Fraud Case

    Former literary agent Stuart Manashil was ordered on Thursday to repay a $23,975 commission to CAA, which he admitted he had illegally diverted to a friend. Manashil, who now runs his own management company, pleaded guilty in March 2018 to a federal wire fraud charge. In a letter to U.S. District Judge Kimba Wood, Manashil [...]

More From Our Brands

Access exclusive content