AMC Networks has warned that its carriage dispute with US satellite TV platform Dish Network is likely to hit its future results, despite posting strong second-quarter earnings.
The US cablecaster said Dish’s blackout of its channels had already reduced the company’s total subscriber base by 13% and warned that failure to have its channels on Dish will have a “material impact” on revenue, operating income and adjusted operational cash flow.
“The financial impact on us will depend on several factors, including the length of time our networks are not carried on Dish Network’s platform and if, when and on what terms Dish Network and [AMC Networks] enter into new carriage agreements,” the firm said.
Dish stopped airing AMC’s flagship channel, along with its WE TV and IFC networks on July 1, after failing to renegotiate carriage terms. It replaced the channels with movie and entertainment channels HDNet, HDNet Movies and Style.
In its earnings, AMC reiterated its belief that “Dish Network’s termination of carriage is directly related to the ongoing litigation between Dish Network and Voom HD” – an indirect subsidiary of AMC Networks.
The legal tussle with Voom dates back to 2008. New York State Supreme Court is set to hear the case on September 18.
Dish had previously denied the legal spat has any bearing on its carriage negotiations with AMC. In a statement last month, Dish said its decision not to renew its contract with AMC was due to the “channels’ high costs compared to their relatively low viewership.”
It added at the time that AMC had “further devalued its programming” by making its popular shows available on online services such as iTunes, Netflix and Amazon.
For the three months ending June 30 – before Dish dropped AMC’s networks – AMC recorded healthy results. Revenue was up 12% year-on-year to US$328m, while net profit came in at US41.5m, compared with US$27.2m for the same period last year.
AMC president and CEO Josh Sapan said the solid financials were driven by “continued advertiser demand and renewals with distributors, most recently AT&T, with whom we reached a new, long-term agreement.”
He added that critical praise also helped the network’s financial performance, noting that AMC received 36 Emmy nominations last month – “more than any other basic cable television group.”