AMC Networks in Strategic Pact with RLJ

SILVER SPRING: AMC Networks has invested $65 million in Acorn TV’s parent company, RLJ Entertainment.

According to a statement issued by RLJ, the AMC Networks investment “will accelerate the distribution and development of diverse content and independent films from RLJ Entertainment across multiple platforms.” Acorn TV, Urban Movie Channel (UMC) and AMC Networks serve similar audiences, the release notes. By aligning, Acorn TV and UMC will have the potential to cross-promote, develop and distribute content.

The investment comes in the form of loans to RLJ Entertainment to refinance the company’s existing senior credit facility, add working capital, reduce the cost of capital through lower interest rates, and provide revised covenants that will allow for increased operational flexibility. AMC Networks has received warrants which, if exercised, would provide AMC Networks with at least 50.1 percent of the outstanding RLJ Entertainment common stock on a fully diluted basis.

Bob Johnson, chairman of RLJ, stated, “I am both delighted and excited that RLJ Entertainment is joining with the AMC Networks family to help capitalize on the opportunities that exist to provide consumers with more diverse content across multiple platforms. RLJ Entertainment has a leading position, through Acorn TV with British television programming, and through UMC with quality urban-focused content, and independent films that we will be able to further develop and grow with the capital and support of AMC Networks.”

Johnson continued: “Josh Sapan, who I am proud to call a friend and whom I’ve known for more than 20 years, is a visionary CEO and an absolute advocate for producing and delivering to audiences of all interests the best in quality and award-winning entertainment. As founder of RLJ Entertainment, I look forward to the future of this new chapter in our business and entering into a relationship with one of the most dynamic and creative content companies in the entertainment industry.”

“We have deep respect for Bob Johnson and the many businesses he’s built, from BET to Acorn TV and UMC,” said Josh Sapan, president and CEO of AMC Networks. “Bob is a talented entrepreneur with a real understanding of the power of strong brands and a proven ability to identify and provide premium content to a wide range of audiences by tapping into the demand for content that uniquely fits their specific consumer interests. 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. 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.”