Anthem Sports and Entertainment, on the prowl for scale-building assets over the past several months, agreed to purchase a majority interest in AXS TV and HDNet, two cable channels owned and created by internet guru Mark Cuban, in a deal that will substantially boost the reach of the fledgling sports and entertainment networks.
With AXS TV and HDNet, Anthem will be available in about 150 million homes worldwide, including about 110 million homes served by multichannel video programming distributors (MVPDs) in the U.S. and Canada, said Anthem founder and CEO Leonard Asper in an interview. Anthem’s networks were previously available in about 45 million homes in the U.S. and Canada.
Asper said that while it will take some time to digest the AXS deal, it won’t be his last.
“By no means do we want to stop here,” Asper said. “I don’t think we have enough scale. This is a good start, but yes, we are looking for other opportunities.”
That doesn’t necessarily mean U.S. cable channels.
“We want to grow with as much proprietary content as we can,” Asper said, adding that the company's other major purchase -- Impact Wrestling in 2017-- was made in part for its 3,000-hour library of classic wrestling matches. “That’s a very important part of our growth plan, owning content. We believe owning the content and putting it on our channels, but also having it on other people’s platforms as well. I call that untethered vertical integration.”
Asper added that he began looking for potential acquisitions several months ago.
“We’ve been looking for an acquisition for some time to grow and get scale, and do what everybody else in the media business is doing,” Asper said, adding that he ruled out potential targets that could only ever be a cable channel in the U.S. “We looked for things that serve passionate communities, can transform to digital media companies and have no geographical limitations on them.”
That search led Anthem to AXS, initially as a potential programming partner.
“We were talking about a content relationship with them based on some of the other things we do -- wrestling and e-sports and fantasy sports -- and that led to this deal,” Asper said. “There was no investment bank hired or a process at all. This was a discussion that came out of a relationship we were developing with them.”
Cuban will remain an equity participant of the combined company, and the investors brought in another content heavyweight -- TV personality, producer and investor Steve Harvey, who will also receive a board seat with the new entity. While the amount of their equity participation was not disclosed, Asper said all parties have a “reasonably significant interest” in the business.
“Anthem’s combination of targeted brands, enthusiastic audiences, operational expertise, international footprint and vision makes them an ideal partner to take AXS TV and HDNet Movies to their next levels,” Cuban said in a press release. “Given Anthem’s portfolio of premium content and complementary programming networks, we could not ask for a better home, and we are looking forward to the results we will collectively generate for this new partnership.”
Just what content Harvey will contribute is yet to be determined. Asper said the entertainer is a passionate viewer of all of Anthem’s content from MMA to fishing and hunting shows and is heavily involved in the music scene in Atlanta.
“He’s got lots of interests beyond what he’s been doing,” Asper said of Harvey. “He’s more a marketing partner. Its TBD [to be determined] in terms of what content we create together, but we know that once people get in a room they will come up with good ideas.”
In a press release, Harvey seemed eager to seize the Anthem opportunity.
“My team and I see great opportunity in Anthem,” Harvey said in a press release. “They have incredible shows, experiential entertainment, and a huge reach. We look forward to collaborating with Anthem on content development that will surprise and delight this newly expanded audience.”
AXS TV has a wide range of programming. In addition to music shows like TrunkFest with Eddie Trunk, AXS Concerts and Rock and Roll Road Trip with Sammy Hagar, the network has news shows (The Big Interview with Dan Rather) and wrestling programming like New Japan Pro Wrestling and WOW: The Women of Wrestling to round out the card.
The latter two programs should fit in well with Anthem, which has networks like Impact Wrestling, Fight Network, Game TV, Game + and outdoor sports channel The Pursuit Channel.
Asper said some programming from those networks may find its way to AXS TV, but there are no plans to consolidate the channels.
“There are some complementary content opportunities but AXS will remain AXS as people know it. We believe there is a lot of content out there that can find a home on AXS, but it has a great brand and we want to keep it as is. We are effectively entering the music/video space, not trying to transform AXS into something we already have. This is an add-on for us.”
One potential source of content is Anschutz Entertainment, which owns about 500 concert venues globally. It’s advertising and sponsorship sales arm -- AEG Global Partnerships -- will continue to provide support for the combined channels.
“There’s a lot of content there, knowledge [and a] relationship that makes us feel like we’re living in a good family,” Asper said.
Anthem’s board of directors will also include Ted Goldthorpe, head of BC Partners Credit, a lead financier on the acquisition; Rick Ehrman, a former senior executive at Univision and NBCUniversal; Robert Foster, founder and CEO of Capital Canada; Scott Honour, founding principal of Northern Pacific Group; and Loudon Owen, chairman and CEO of DLT Labs.
Asper formed Anthem Media Group in 2010 in Toronto -- it changed its name in 2015 -- after purchasing The Fight Network. The company continued to build its portfolio through acquisition, purchasing the Pursuit Channel in 2013, and in 2017 it bought a majority interest in TNA Impact Wrestling.
Fight Network had been TNA’s Canadian distributor and in 2016 Anthem helped the network settle a messy lawsuit by Smashing Pumpkins frontman Billy Corgan who had loaned the wrestling channel money. Anthem bought Corgan’s loan for an undisclosed sum to settle the dispute.
AXS TV and HDNet Movies will continue operating from their existing facilities in Denver and Los Angeles, and the combined company will include Anthem’s playout and production center in Toronto and production facilities in Nashville and Europe.