UPDATED, 8:56 AM: AMC Networks Chairman James Dolan warned of layoffs at the media company in a staff memo to employees as newly installed CEO Christina Spade steps down after a tenure of only three months.
It hadn’t been immediately clear what was behind her departure. But Dolan’s memo notes weakening financials. “It was our belief that cord cutting losses would be offset by gains in streaming,” Dolan said. “This has not been the case.”
“We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks,” he said in the memo obtained by Deadline. See in full below.
“We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood,” Dolan said. “We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community.”
AMC Networks already let go 10% of its U.S. workforce, eliminating nearly 100 positions, in 2020 in a reorganization designed to streamline the company’s linear and streaming operations.
Layoffs have been sweeping media, tech and entertainment recently as stocks and profits falter in shifting landscape and an uncertain economic climate.
In a short statement on Spade early today, the company’s board of directors said it is finalizing who it will name as a replacement.
Dolan’s full memo:
AMC Networks Community:
As I am sure you are aware our industry has been under pressure from growing subscriber losses. This is primarily due to “cord cutting.” At the same time we have seen the rise of direct to consumer streaming apps including our own AMC+. It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray.
It is for that reason that myself and the Board of Directors of AMC Networks have concluded that we as a company need to conserve our resources at this time. We have directed the executive leadership of AMC Networks to undergo significant cutbacks in operations. These will include a large-scale layoff as well as cuts to every operating area of AMC Networks. We of course realize that this will cause significant concern and anxiety for our employees and those who rely on AMC Networks for their livelihood. We do not take this lightly. We will take every step possible to minimize the impact of these actions on our community. However, it is imperative that we begin immediately with this new course of action.
The Dolan Family and the Board of AMC Networks have great pride in the company and products that you have created. This is a confusing and uncertain time in our industry. We are confident that AMC Networks will come through this even stronger. Your executive leadership will follow up with details shortly. We wish only the best for everyone in the AMC Networks community.
PREVIOUSLY, 4:48 AM: In a surprising move, AMC Networks CEO Christina Spade has stepped down after only three months in the role.
It wasn’t immediately clear what led to the abrupt exit. In a short statement, the company’s board of directors said it is finalizing who it will name as a replacement.
AMC Networks Chairman James Dolan said: “We thank Christina for her contributions to the company in her CEO role and her earlier CFO role, and we wish her well in her future endeavors.”
AMC Networks operates a portfolio of cable networks including AMC and IFC as well as niche streaming services such as Acorn TV, Shudder and AMC+.
An industry veteran, Spade previously held senior roles at ViacomCBS, CBS Corp. and Showtime. It was announced in August that she would replace interim CEO Matt Blank, who had replaced longtime chief Josh Sapan after the latter’s 26-year run in the corner office.
“I’m a fan of this company in every respect — its content, brands, and most importantly, its people and dynamic and inclusive culture,” Spade had said upon her promotion in August.
Spade ascended to the CEO role after joining the company in 2021 as Chief Financial Officer and then later gaining the additional title of Chief Operating Officer. She had previously been CFO at CBS and Showtime was among a small number of female executives to rise to CEO in corporate America, with an even smaller proportion of that population doing so in the media business.
The shuffle at the top of AMC Networks continues a period of transition for the company, which was formerly known as Rainbow Media before a spinoff from Cablevision in 2011.
Like its peers in the cable programming business, AMC Networks faces intense challenges from accelerating rates of cord-cutting and a secular decline in linear ratings. The company has signaled a plan to derive most of its revenue from streaming by 2025, but results across the media business suggest that streaming is not as profitable as the dual-revenue stream of traditional pay TV.
Earlier this month, AMC Networks reported soft financials for the third quarter, primarily due to a slowdown in the advertising sector. Earnings per share of $1.94 declined 24% from the year-ago quarter, while revenue slumped 16% to $682 million. In addition to the advertising slide, the company cited lower affiliate revenue and unfavorable foreign currency exchange rates.
While the stocks of media and tech companies have taken a beating this year, the pain has been especially acute for AMC Networks shareholders. The company’s shares fell to an all-time low of $17.75 after the earnings news this month and have tumbled 45% in 2022 to date.
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