The settlement that Cablevision-controlled AMC Networks won in the Voom lawsuit with Dish Network appears to be a gift that keeps on giving.
In addition to a $700 million cash payment to AMC Networks, Dish — which had blacked out AMC, WE tv, Sundance Channel and IFC and branded them as unattractive to Dish subscribers — signed a new carriage agreement for the channels.
Analyst Richard Greenfield of BTIG Research says the carriage deal also seems to be paying off big for AMC.
Greenfield says that the networks have been moved to better tiers on Dish, giving them big gains in subscriber counts. And more subscribers mean more money — both in fees and advertising.
AMC, WE tv and ITC each added about 1.3 million subscribers by becoming part of Dish’s America’s top 120 package, according to Greenfield. Sundance added 9.7 million subs, a gain of 24%.
(Dish also boosted distribution of Fuse, owned by MSG — another Cablevision spinoff — by 12 million subs, or 21%.)
Dish chief “Charlie Ergen’s ‘generosity’ in broadening the distribution of AMC, WE tv, IFC and Sundance as part of the Voom litigation settlement illustrates the decisiveness of the Voom victory. In turn, we expect that the new AMC affiliate fees paid by Dish will be quite attractive relative to what Dish was paying and the rates paid by other MVPD,” Greenfield said.
Bottom line: Without a sub fee increase, AMC Network’s distribution revenues from Dish will be up $8 million annually.
With fee growth Greenfield figures that AMC Network’s total distribution revenue should be up 10% this year — even including the $20 million AMC lost from the four-month Dish blackout. And in 2013, Greenfield is estimating sub fee growth of 10.5%.
Sometimes when distributors act like Mad Men, it doesn’t pay.