Last month, AMC Networks announced its 4th quarter 2023 earnings. For the first time in several quarters, AMC was able to add streaming subscribers, adding 300,000 to AMC+, Shudder, and other streaming services it owns. This comes as the AMC lost 100,000 streaming subscribers in the 3rd quarter and 500,000 in the 2nd quarter of 2023.
The real issue, though, is that AMC Networks continued to be hit by the weak ad market, and its ad revenues dropped 23% in the United States. This comes as a growing number of TV companies struggle with declining ad sales.
To help address this issue and upcoming bills, AMC Networks announced it will offer $700 million in senior secured notes that will be paid in 2029. What is this? In short, AMC allows investors to buy up to approximately $70 million in bonds. In 2029, AMC will pay out these loans to the investors with interest. This is a very common way for companies to quickly raise funds.
“In the fourth quarter and across 2023, we continued to see success in the areas that will drive this company forward – programming, partnerships and profitability. I’m encouraged that this year we were able to grow streaming revenue and strengthen our subscriber base, expand our consolidated AOI margin to 25%, and meaningfully grow our free cash flow. Nearly a year since joining AMC Networks as CEO, I am proud of the progress we have made in a fast-changing environment, and the new and innovative ways we are engaging with viewers and our commercial and creative partners.” Said AMC Networks Chief Executive Officer Kristin Dolan.
AMC says they hope to use this round of bonds to pay off other notes that are due in 2025. AMC is currently needing to pay out approximately $774 million in notes scheduled to be repaid in 2025.
The quick way to look at this is that AMC Networks is trying to push off the debt it owes in 2025 to 2029 when many expect the TV market to be in a far better place.
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