October 31, 2019
RLJ Entertainment has struggled to be profitable ever since BET founder Robert L. Johnson acquired Acorn Media and Image Entertainment in 2012 to form the home entertainment distributor.
Spurred by over-the-top video successes of Acorn TV and Urban Movie Channel (UMC), AMC acquired majority ownership of RLJ Entertainment in 2018 for $65 million.
AMC Oct. 31 reported RLJE posted third-quarter (ended Sept. 30) net revenue, operating loss and adjusted operating income of $31 million, $1 million and $3 million, respectively.
For the nine months of the fiscal year, RLJE recorded net revenue, operating loss and AOI of $79 million, $6 million and $5 million, respectively.
RLJE operates under AMC’s “International and Other” segment, which includes AMC Networks International, the company’s international programming businesses; Acorn TV, Shudder, Sundance Now and UMC; Levity Entertainment Group, the company’s production services and comedy venues business; and IFC Films, the company’s independent film distribution business.
“We are optimizing the value and reach of our content in a variety of ways and executing on a plan that will enable us to thrive in a very dynamic and competitive environment,” Josh Sapan, CEO of AMC Networks, said in a statement.
Indeed, Acorn TV recently surpassed 1 million subscribers in North America.
International and Other revenue for the third quarter increased 20.5% to $183 million, operating loss decreased $5 million to a loss of $12 million, and adjusted operating income (AOI) increased $6 million to $13 million, all compared to the prior year period.
International and Other revenue for the nine months increased 30.2% to $533 million, operating loss increased $8 million to a loss of $53 million, and adjusted operating income increased $24 million to $35 million, all compared to the prior year period.
Third quarter revenue primarily reflected $31 million related to the acquisition of RLJE.
Third quarter operating loss and adjusted operating income reflected the increase in revenue as well as an increase in operating expenses. The increase in operating expenses were primarily attributable to the acquisition of RLJE.
As previously disclosed, in connection with the acquisition of RLJE, the AMC acquired RLJE’s 64% interest in Agatha Christie Limited (“ACL”), which manages the intellectual property and publishing rights based on the late author’s works.
As a result of the RLJE acquisition, AMC modified its definition of AOI to include majority owned equity investments. For the third quarter, the company recorded adjusted operating income of $1 million related to ACL. For the nine months of the fiscal year, AMC recorded adjusted operating income of $4 million related to ACL.