RLJ Entertainment Looks to Ramp Up Content Investments

RLJ Entertainment, the parent company of Acorn TV and Urban Movie Channel, has expanded its strategic relationship with AMC Networks in order to be able to invest more in content.

AMC Networks has upped its loan to RLJ from $13 million to $23 million and extended the maturity date on the base amount to 2021 from 2020. RLJ’s founder, Robert L. Johnson, has converted his preferred stock into common stock, eliminating dividend payments to him. And AMC Networks has exercised $5 million of its Tranche A Warrants into RLJE common stock. These transactions should result in $5 million in savings annually, allowing RLJ to expand its content investments.

Johnson stated, “AMC Networks has proven a stellar partner and collaborator in RLJ Entertainment’s drive to more firmly establish Acorn TV and UMC as must-have destinations and impactful brands, and we thank AMC Networks President and CEO Josh Sapan and AMC Networks for their increased support. I believe in RLJE’s ability and opportunity to accelerate digital channel market penetration and steepen our overall growth trajectory, and I am demonstrating my support by participating through pure common equity.”

Miguel Penella, CEO of RLJ Entertainment, noted, “With OTT adoption gaining increased acceptance amongst consumers, we see a unique window of opportunity to take advantage of this trend. This financing reallocates significant levels of cash and limits the company’s level of financial leverage while increasing shareholders equity. We will use these additional resources to intensify our planned investments in original, exclusive and compelling content to expand Acorn TV and UMC programming, in marketing to support awareness and subscription, and in broadening our digital channels’ domestic and international distribution. Accelerating our digital channel growth should, in turn, drive faster emergence of our higher-margin business model. Our partnership with AMC Networks has not only been financially beneficial but also extremely productive in terms of our strategic collaboration on programming opportunities.”