AMC Networks Pulls Trigger on RLJ Entertainment Merger

AMC Networks has agreed to buy majority (50.1%) interest in RLJ Entertainment, including over-the-top video properties Acorn TV and Urban Movie Channel (UMC), for $65 million in cash.

AMC’s $6.25 per share offer represented a 47% increase from its $4.25 per share offer in February. In 2016, AMC entered into a merger-agreement with RLJE, giving $65 million in loans (now valued at $78 million) with the option to acquire the Bethesda, Md.-based home entertainment distributor.

AMC’s move puts a value of $274 million on RLJ Entertainment, which was created in 2012 by Robert L. Johnson through the merger of Image Entertainment and Acorn Media Group. Johnson, who founded and sold Black Entertainment Television (BET) to Viacom, retains a 17% stake in RLJ Entertainment, which becomes a private subsidiary of AMC.

“[Bob Johnson’s] management team is extraordinary, having successfully transitioned Acorn TV from a home video and DVD business to a leading direct-to-consumer subscription service,” Josh Sapan, CEO of AMC Networks, said in a statement.

Acorn TV was launched in 2011 by Acorn Media Group as a competitor to Netflix streaming British TV shows and movies over the Internet. Together with UMC, the two OTT video services have a combined 800,000 monthly subscribers – up 100,000 subs since the end of 2017.

While Sapan appears confused about Acorn TV’s history as a distributor of packaged media (it wasn’t), the CEO is spot on recognizing the value of RLJE’s majority stake in the Agatha Christie library — a brand filled with IP opportunities.

In 2013, RLJE licensed the film rights to Christie’s Murder on the Orient Express to 20th Century Fox, which released a new feature film co-starring and directed by Kenneth Branagh in 2017.

Murder on the Orient Express, which starred Johnny Depp, Michelle Pfeiffer, Judi Dench, Penelope Cruz, Willem Dafoe and Michael Pena, among others, generated $352 million at the global box office. The title generated more than $9 million in combined DVD/Blu-ray Disc sales.

“This acquisition furthers AMC Networks’ digital strategy by meaningfully accelerating our interests in direct-to-consumer ad-free subscription services that we own and control, in addition to providing us with access to strong IP as we continue to diversify our revenue opportunities, placing AMC Networks in a stronger position over the long term,” Sapan said.

RLJ Entertainment in May reported a first-quarter net loss of $6.5 million, compared with a net loss of $6.1 million during the previous-year period. Revenue increased 34% to $18.5 million, from $13.8 million a year ago.

 

 

Combined Subscribers for RLJ’s Acorn TV and Urban Movie Channel Surpass 800,000

RLJ Entertainment announced that combined subscribers to its two proprietary subscription streaming channels, Acorn TV and Urban Movie Channel, have surpassed 800,000.

That is an increase of more than 100,000 subscribers from December 31, 2017, and more than 45% total growth from a year ago, according to RLJ.

“RLJ Entertainment’s subscriber momentum remains robust as we intensify our investments in compelling original and exclusive content, broaden our distribution on both domestic and international platforms, and enhance our marketing to drive awareness,” said RLJ CEO Miguel Penella in a statement. “Viewership across the OTT landscape is growing rapidly as consumers demand more from their entertainment options, offering increased opportunity for Acorn TV and UMC to thrive. Our unrelenting focus on building must-have digital channel destinations, and continued strong subscriber responses to these efforts, coupled with our expanded distribution footprint, puts us firmly on track to achieve our target of 1 million subscribers by early 2019.”

Acorn TV is a subscription streaming service offering British and international television, and Urban Movie Channel is a subscription streaming service for African American and urban audiences.

RLJ Entertainment Retains Fiscal, Legal Advisors in AMC Networks Deal

RLJ Entertainment has retained fiscal advisor Allen & Co. and Greenberg Traurig as its legal counsel regarding the pending proposal from AMC Networks to acquire all outstanding shares of common stock of RLJE not currently owned by AMC Networks or entities affiliated with founder/board chairman Robert L. Johnson.   

RLJE, which was formed in 2012 through the merger of Acorn Media Group and Image Entertainment, said retention of the advisors is no guarantee that a definitive agreement will be reached with AMC Networks or that any transaction involving the home entertainment distributor will be approved by the board’s special committee.

‘The company does not currently intend to announce any developments with respect thereto unless a definitive agreement for a transaction has been entered into or the special committee otherwise has formally completed its review process,” RLJE said in a statement.

Notable assets include SVOD services Acorn TV and Urban Movie Channel (UMC). Subsidiaries include Image Entertainment, Agatha Christie Ltd., and Acorn Productions Ltd.

Indeed, 20th Century Fox in 2013 acquired the theatrical rights to Christie’s Murder on the Orient Express from Acorn Productions, and the subsequent film was released last November and generated more than $350 million at the global box office, including $103 million domestically.

The title was released at retail Feb. 27 by 20th Century Fox Home Entertainment.

RLJ’s Urban Movie Channel Gets Android App

Urban Movie Channel, RLJ Entertainment’s subscription video on demand service created for African American and urban audiences in North America, is now available via an Android app.

Consumers can download it a no cost in the Google Play store at http://bit.ly/2BRPu9b. The channel offers a seven-day free trial and is $6.99 a month or $59.99 a year thereafter. The new app allows subscribers to set their personal content preferences and features UMC All Access, a passport to view behind the scenes interviews, events and other exclusive entertainment content.

“We are very excited to announce UMC’s availability for download on Android devices,” said Traci Otey Blunt, President of UMC in a statement. “As part of our growth strategy, it is important that we reach our audience where they are, and our new Android app will allow us to bring our customers a greater user experience. We will now be able connect with more of the African American and urban audiences who want to access the compelling content we provide for their specific viewing interests.”

In 2017, UMC premiered several new original series including lifestyle and travel series “World Wide Nate: African Adventures,” hosted by travel vlogger Nathan Fluellen; soap opera dramedy “The Rich and the Ruthless,” from Emmy nominated actress Victoria Rowell; and variety clip series “Lawd Have Mercy,” hosted by Flex Alexander and Buddy Lewis. Other notable premieres in 2017 include workplace comedy series “Hard Medicine”; romantic comedy “No Regrets,” starring Brian White and Monica Calhoun; several titles from acclaimed director Ava DuVernay’s ARRAY Releasing entity, including election night drama Big Words and critically acclaimed BP oil spill documentary Vanishing Pearls; and season one of WE tv’s “Braxton Family Values.”

“It’s exciting to partner with a forward-thinking brand like UMC to bring its mobile application experience vision to life,” said Alan S. Knitowski, the company’s CEO and co-founder Phunware Inc., which developed the app. “As the entertainment landscape continues to fragment and move away from traditional content delivery models, it’s critical to meet viewers where they are — which is increasingly on mobile. We’re proud to support UMC on this journey and look forward to our continued partnership.”

Created by Robert L. Johnson, chairman of RLJ Entertainment and founder of Black Entertainment Television (BET), Urban Movie Channel is the first subscription streaming service created for African American and urban audiences in North America that features quality urban content and showcases feature films, documentaries, original series, stand-up comedy, and other exclusive content, according to RLJ. The channel is available on iOS, Apple TV, Amazon Channels, Roku, Amazon Fire TV and Fire TV Stick.