Stocks That Won’t Exist in a Decade: AMC Networks (AMCX)
The Way Out: Buyout
It’s hard not to wonder if AMC Networks Inc (NASDAQ:AMCX) hasn’t already missed its window for a sale. AMC and Starz were rumored to be discussing a merger for some time – but Starz sold itself to Lions Gate Entertainment Corp. (USA) (NYSE:LGF).
With AMC’s flagship show The Walking Dead seeing declining ratings, no major hit behind it, and cord-cutting and “skinny bundles” potentially pressuring viewership, AMC’s small portfolio doesn’t seem like enough to manage through a tough time for content providers.
Simply put, it’s going to be very difficult for AMC to navigate all the new online streaming plans: Hulu, Sling TV, YouTube, etc. A bankruptcy is unlikely: AMC does have a reasonable amount of debt, but residual profits from The Walking Dead, Mad Men, and Breaking Bad have real value, and AMC spent $1 billion for its overseas business as well.
But it’s not hard to imagine AMC waiting too long to make a move — and having to settle for any offer necessary to allow it compete amidst content giants. And it’s extremely difficult to picture AMC lasting another 10 years on its own amid what almost certainly will be a massive change in the media landscape.