AMC Networks (NASDAQ: AMCX) is betting big on “The Walking Dead.”
Last week, CEO Josh Sapan said at an investor conference that the cable network plans to continue the series in some form for another 10 years, according to a report from Bloomberg. AMC plans to produce multiple TV shows and movies based on the graphic novels that “The Walking Dead” is based on.
Going into the ninth season of the series, “The Walking Dead” remains one of the most popular shows on television, and in some years has consistently scored as the highest rated drama on TV despite being on a paid-cable network.
The popularity of the show, as well as the network’s past hits including “Mad Men” and “Breaking Bad,” has seen the company’s revenue double over the past five years on ad sales, increased fees from cable TV providers, and syndication deals for reruns.
But beginning with Season 7, the series’ ratings began to slip in a big way.
The show peaked at 19 million nightly viewers in 2015, and has since fallen to an average of 11 million for the most recent season of the show.
So, why, when this show has been showing signs of fatigue for the last couple of years, is AMC planning to continue to kick this undead horse for the next ten years?
It’s plan to finance “The Walking Dead universe” may give us some clues.
According to Bloomberg, “AMC has told potential partners that all rights to ‘The Walking Dead’ are on the table,” and the company is holding talks with large media companies about partnering on these projects.
With all rights to the network’s biggest show and content plan for the next 10 years on the table, AMC Networks might as well just put a ‘for sale’ sign on its doors.
AMC Networks is a relatively small, independent network valued at $3.6 billion. If larger media partners are going to bid on “The Walking Dead” content, which is the heart of AMC’s content offering, why not just bid on the whole company?
After losing the bidding war for 21st Century Fox’s film and entertainment assets to Disney, Comcast (NASDAQ: CMCSA) may be in the market for new content and could be a potential buyer for AMC. “The Walking Dead” could easily fit into Comcast’s NBCUniversal – just imagine the zombie-themed amusement park rides at Universal Studios.
Amazon (NASDAQ: AMZN) could also be an interesting buyer. Buying AMC Networks could beef up Amazon’s content. Apple (NASDAQ: AAPL) or Netflix (NASDAQ: NFLX) could be suitors as well. Netflix has already licensed “The Walking Dead,” forking over millions for the content.
A larger media company would be better equipped to continue producing a popular but waning franchise—just think Disney with “Star Wars” and the Marvel franchise—and if the bidding war over Fox taught us anything it’s the value of content. Given that, AMC Networks may want to just sell itself along with the rights to “The Walking Dead.”