AMC Networks is scaling back on its programming and marketing spends starting this year, according to executive vice president and chief financial officer Patrick O’Connell. The exec took the stage Wednesday at the Gabelli Funds 15th Annual Media and Entertainment Symposium to address what the financial future of the company entails.
“So I think over the last couple of years — AMC, to a lesser degree, but the industry broadly — overspent on programming, overspent on marketing as well,” O’Connell said.
According to O’Connell, before the COVID-19 pandemic, AMC Network’s cash content spend averaged between $950 million and $1 billion. That increased to “about $1.35 billion” last year.
“We’ve made a commitment to take that back down to pre-pandemic levels. It’ll be closer to $1.1 billion this year, and we’ll likely float down even further closer to the $1 billion dollar range going forward,” O’Connell said. “We think that’s the right level of investment that strikes a balance between continuing to invest in existing IP and developing additional new IP.”
That existing IP includes new spinoff series set in “The Walking Dead” and Anne Rice universes. Goign forward of the network needs to further reduce its programming spend, “we have additional levers we can pull over time,” O’Connell said.
The network exec also addressed the elephant lurking in every Hollywood room: the WGA strike. AMC will not be impacted by the ongoing strike as the network has a “full slate of programming” for the second half of the year. “We’re in good shape. We’ve got product to sell,” O’Connell said. AMC was similarly confident that it wouldn’t be impacted by the strike during the upfronts in May.
AMC is currently in a transitional phase. On the programming side, the network ended two of its biggest tentpole shows last year — “The Walking Dead” and “Better Call Saul.” The network’s streaming future is also in flux. AMC+, which was launched in 2020, currently gives subscribers access to AMC, IFC Films Unlimited, Shudder and Sundance Now. But just like Max and Netflix before it, the network announced it would be adding a cheaper, ad-supported tier to its streaming service. The new option is expected to launch by October.