With Its Zombies, AMC Is the Walking Deal

(Bloomberg Opinion) -- AMC Networks Inc. is the zombie of the merger market. It’s time the company goes toward the light. 

As some analysts and investors have feared, the TV-network operator seems to be staking its future on “The Walking Dead,” its hit series about a zombie apocalypse, which premieres its ninth season next month. AMC Networks wants to make “The Walking Dead” live forever, as my Bloomberg News colleague put it Wednesday, citing people familiar with the matter who say there are plans to produce multiple movies and new TV shows for the franchise and that the company is holding discussions with large media companies about partnering on such projects. 

Milking a single franchise years beyond its prime may be a fine strategy for a unit of a large media conglomerate — just look at Walt Disney Co.’s reboot of “Star Wars” and its string of Marvel-themed blockbusters. But it’s not a long-term vision for a small, independent company in this media landscape.

Josh Sapan, the CEO, is well aware that the biggest criticism of AMC Networks — which previously brought audiences “Breaking Bad” and “Mad Men” — is that it’s now turning into a one-trick, undead pony. Promoting this singularly focused strategy could almost be interpreted as putting a for-sale sign on the company. He’s looking for partners for “The Walking Dead,” but with a total company market value of $3.6 billion and with that franchise at the center of it, they may as well be bidders for the whole thing. 

Given its size and relative simplicity versus the other TV-network operators, any number of companies could take an interest in AMC Networks. Comcast Corp., the parent of NBCUniversal, may be scouting for more content, after losing a bidding war for 21st Century Fox Inc.’s TV and film entertainment assets to Disney. While it may not move the needle much for a company of Comcast’s scale, AMC Networks would fit well within NBCUniversal, which comprises brands such as USA Network and the Universal Studios theme parks — imagine the creepy ride possibilities.

Disney, with its ability to give old characters and story lines new life, would be another logical suitor. Others on the lookout for content include Amazon Inc., Apple Inc. and Netflix Inc., as well as potentially AT&T Inc., the newest conglomerate on the media scene after buying Time Warner. It’s worth noting, though, that some of the companies already have a lot of debt and others have shown less interest in buying versus building businesses in house. 

Still, the Fox bidding war and AT&T’s long-fought deal for Time Warner highlight the value of content and the rich valuations it can fetch. “The Walking Dead” isn’t enough to take AMC Networks into the future, but it could live on under someone else’s roof. 

To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tara Lachapelle is a Bloomberg Opinion columnist covering deals, Berkshire Hathaway Inc., media and telecommunications. She previously wrote an M&A column for Bloomberg News.

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