UPDATE, 11:00 AM: AMC Networks tells me that CEO Josh Sapan didn’t mean to leave an impression that he might help digital streaming services – and therefore promote pay TV cord-cutting — if Dish Network drops his channels. He really meant that he would only consider helping another traditional pay TV provider when he responded to a question about how he’ll deal with “other distributors who might want to capture subscribers who want access to (AMC’s) programming.” His answer: “We think that the potential absence of our service and services on any platform by definition creates a sort of competitive opportunity for another platform. It is a very competitive world for multichannel video. So we’ll watch it as it goes. Of course, we’re contemplating it and making all sorts of contingency plans.”
PREVIOUS, 8:40 AM: Talk about Mad Men, or even Walking Dead: AMC Networks CEO Josh Sapan vaguely hints this morning that he might promote pay TV cord-cutting if Dish Network follows through with its plan to drop AMC, IFC, WeTV, and Sundance Channel in June. Sapan’s making contingency plans, and they apparently include offering more programming to a streaming service — in effect, encouraging consumers to cancel their pay TV subscriptions. Dish’s decision “creates a competitive opportunity for another platform,” Sapan says. “AMC is among the most critical services one can have to succeed” in pay TV and in the streaming world. “We’re in a fairly strong position.”
It was a pointed rebuttal to Dish Chairman Charlie Ergen’s damaging comment early this week that he plans to drop AMC’s channels because set top box data shows they have low viewership — suggesting that other pay TV providers also might consider them expendable. Sapan says that’s bogus. “We think today AMC in particular is one of the most popular services on the television dial.” The real issue, he says, is that Ergen wants to force AMC to scrap its 4-year-old $2.5B breach of contract suit which involves Dish’s decision to drop the VOOM suite of HD channels. Lawyers will meet with the judge on Tuesday to set a trial date. The judge said in a pre-trial ruling that Dish had destroyed evidence and showed a “pattern of egregious conduct and questionable — and, at times, blatantly improper — litigation tactics.” Sapan says that Dish’s decision to drop AMC Networks is “directly and absolutely related to the litigation” which has “taken a turn for the worse for Dish.” The No. 2 satellite company recently lost its effort to appeal the pre-trial ruling. If Dish retaliates by dropping AMC, then it “is not acting in the best interest of its subscribers,” Sapan says.
The loss of Dish’s 14.1M subscribers could have a “material” impact on AMC’s finances if it lasts a long time, the AMC chief adds. But he danced around a question about whether he needs to spend more on original programming to make his channels less vulnerable to cancellation. “We need to continue what we’ve been doing,” he says. AMC shares spiked 14% this morning after it issued a strong Q1 report, but quickly retreated to +3.2%.