AMC Networks has entered into a partnership with BET Networks founder Robert Johnson’s RLJ Entertainment, agreeing to loan the SVOD company $65 million while also acquiring the ability to purchase a controlling stake in the operation within several years.
RLJ Entertainment operates Acorn TV, a popular SVOD service in the UK focused on mystery and drama genre programming. Its also operates UMC (Urban Movie Channel), an African-American targeted SVOD service available in the U.S.
According to SEC documents, RLJ will use the loan to refinance a debt load that stood at about $61 million as of the end of June. RLJ lost $13.6 million on revenues of $33.5 million in the first half of 2016.
Acorn TV has seen its subscriber base rise by 92 percent this year to 370,000.
AMC received warrants that could result in it controlling 50.1 percent of the company, if fully exercised.
As operator of the flagship AMC Channel, as well as IFC, SundanceTV and WE tv, AMC Networks is looking to make in-ways into digital distribution that don’t involve Netflix.
“Much like the early days of cable, and AMC Networks' own history of providing quality programming to targeted audiences, RLJ Entertainment's Acorn TV and UMC appeal to consumers with quality programming that represents diverse voices,” said Josh Sapan, president and CEO of AMC Networks. “Our investment is a strategic opportunity to provide capital and additional resources to RLJ Entertainment as they continue to explore their many opportunities for growth, and while we consider the many potentially powerful synergies with our innovative partners at the BBC, and our own WE tv network."
As it builds its ability to self-distribute programming through SVOD channels, AMC still has to live in the linear here and now. The company simultaneously announced that its most important programming asset, the aging yet enduring series The Walking Dead, has been renewed for its eighth season.
AMC will launch the seventh highly anticipated season of the show on Oct. 23.