Market Overview

Blackout Averted: AMC and Verizon Make Peace

by Sterling Wong, Minyanville staff writer

Fans of The Walking Dead can breathe a sigh of relief. When the hit AMC (NASDAQ: AMCX) zombie series returns in February, Verizon (NYSE: VZ) FiOS subscribers will be able to catch every gruesome decapitation because AMC and Verizon have reached an agreement to renew their carriage deal.
 
In late November, in the midst of renegotiating a contract that is set to expire at the end of the year, AMC had Verizon customers in a frenzy when it started warning them through commercials and a crawl on AMC channels that they would soon lose their favorite programs and that they should contact Verizon to urge the pay TV operator to keep AMC.
 
Verizon, in retaliation, said that there was no danger of AMC being dropped and that AMC, a network with “a history of using their viewers as pawns in their negotiations with distributors,” was simply trying to “scare our FiOS TV customers into thinking that they will lose their programming.”
 
In a statement announcing the new deal, Verizon said, “AMC Networks has agreed to an agreement with Verizon that is both reasonable and in our FiOS TV customers’ best interests. This means that there is no risk of losing any AMC Networks channels. We’ve worked hard on behalf of our FiOS TV customers to reach an agreement with AMC. We’ll continue to fight for our customers to ensure they continue receiving all of the great programming they’ve come to expect.”
 
AMC, which had clearly been angling for an increase in carriage fees from Verizon, must have been happy with the deal. No financial details were disclosed, but the network, whose channels include AMC, IFC, Sundance Channel and WeTV, said in a statement that the new long-term agreement “recognizes the value of our networks.”
 
According to Deadline, Susquehanna Financial Group’s Vasily Karasyov estimates that AMC will collect 6% more in fees from Verizon, although we will only find out for sure when AMC posts its first-quarter earnings in 2013.
 
Cable TV blackouts have occurred with some degree of frequency this year, as content providers and pay TV operators go head to head. AMC networks only recently went back live on Dish Network (NASDAQ: DISH) after having been dropped by the cable TV operator since the summer over a legal dispute. Last month, the issue of content providers asking for sharp carriage fee increases in contract negotiations also reared its ugly head when DirecTV (NASDAQ: DTV) and Dish refused to meet the demands of Time Warner Cable (NYSE: TWC) for the right to carry the latter’s regional sports channel, SportsNet, which screens Los Angeles Lakers games.

As of 12:45 p.m. EST, Verizon was up 0.64% to $44.72 while AMC Networks was down 1.57% to $51.93.

 

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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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