AMC turnaround will trigger US$350m-US$475m in restructuring charges

Having announced plans that could lead to a cut 20% of its workforce, AMC Networks has now issued an SEC Filing in the US which estimates that the company will incur US$350m-US$475m in pre-tax restructuring charges as it seeks to turn the company around.

James Dolan

Management said the restructuring plan is designed to achieve “significant cost reductions, in light of “cord cutting” and the related impacts being felt across the media industry as well as the broader economic outlook.”

The plan encompasses initiatives that will include, among other things, “strategic programming assessments and organisational restructuring costs. As a result of the plan, the programming assessments pertain to a broad mix of owned and licensed content, including legacy television series and films that will no longer be in active rotation on the Company’s linear or digital platforms”. The Company added that it may realise some future licensing and other revenue associated with the owned titles.

The extent of AMC Networks’ problems only became clear earlier this week, when CEO Christina Spade stepped down after just three months in the job. Company chairman James Dolan announced “significant cutbacks” saying: “It was our belief that cord cutting losses would be offset by gains in streaming. This has not been the case.”

The restructuring efforts are ongoing, including further strategic assessments of programming that could result in additional charges above the estimate. The company said it expects the restructuring to be substantially completed by the end of 2023.

In related news, CNN also commenced planned lay-offs this week. In a memo to staff, CEO Chris Licht said it was “incredibly hard to say goodbye to any one member of the CNN team, much less many.” The cutbacks at CNN are part of a wider process of restructuring taking place across parent group Warner Bros Discovery.