AMC Networks reported its fourth-quarter 2024 earnings Friday, revealing a $268.7 million devaluation of the media company’s U.S. cable channel business, which consists of AMC, BBC America, IFC, SundanceTV, WE tv and IFC Films.
At the same time, the company says AMC Networks’ U.S. streaming revenue increased 8% between October and December. The company’s total combined streaming subscribers reached 12.4 million by the end of the year, which counts customers across AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK and HIDIVE.
For the full year, AMC Networks took a total of $399.5 million in impairment and other charges, including the above-mentioned $268.7 million goodwill charge for domestic operations, as well as $102 million charge for international division AMCNI and $29.2 million for long-lived asset impairment charges at BBC America, which AMC Networks acquired in full in November.
Per AMC Networks, “The decrease in the estimated fair values reflected current and expected trends across the media industry, including continued softness in the domestic linear marketplace and across the International television broadcasting markets, resulting in lower expected future cash flows, as well as a decrease in the valuation multiples used to estimate the fair values using the market approach for the Domestic Operations reporting unit.”
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Restructuring and other related charges were $49.5 million for the year, with $44.2 million of that being content impairment charges and $5.3 million of severance and employee-related costs.
When AMC Networks bought out BBC America last fall, the company says it took a restructuring charge of $43.2 million “pertaining to certain scripted original programming that no longer aligned with the channel’s go-forward strategy” and additional content charges “were recorded in connection with We TV shifting to a reduced originals strategy.”
Looking at the domestic business, overall revenue decreased 11% to $520 million. Subscription revenue was down 4% ($314 million), as streaming revenue rose 8% ($156 million) and affiliate sales dropped 13%. Content licensing fell 30% ($67 million). Ad sales declined 12% to $139 million.
International revenue was down 14% ($86 million). Subscription revenue dropped 5% ($48 million). Content licensing and other sales fell 85% to $4 million due to the sale of 25/7 Media in December 2023. Ad sales increased 43% ($34 million) with a one-time retroactive adjustment in the U.K., without which, the increase was 12%.
Wall Street forecast earnings per share (EPS) of $1.05 on $611 million in revenue, according to analyst consensus data provided by LSEG. AMC Networks reported adjusted EPS of 64 cents on $599 million in revenue. Revenue was down nearly 12% from the prior year.
“We are pleased and encouraged by our results in the fourth quarter and across all of 2024. We achieved our full-year guidance across all key financial metrics, including generating healthy free cash flow of $331 million,” CEO Kristin Dolan said in a letter to shareholders. “Our free cash flow performance to date has been strong and we are increasing our expectations to approximately $550 million of cumulative free cash flow over the ’24/’25 two-year period. We forged and expanded innovative partnerships that are helping to drive our company forward amidst a period of change that is challenging all media companies. In addition, we continued to delight fans by delivering high-quality and distinctive shows and films across our own targeted offerings as well as an array of partner platforms, and to expand our targeting capabilities to differentiate our advertising business.”