AMC To Acquire Robert Johnson’s RLJ Entertainment In Deal Worth $60 Million

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Written by Dana Sanchez

 

AMC Networks announced a deal to acquire majority control of RLJ Entertainment, the streaming-oriented company headed by Robert L. Johnson.

The deal values RLJ at about $60 million.

Johnson is media entrepreneur, philanthropist, and investor who became the first black American billionaire.

RLJ Entertainment operates two streaming-subscription services aimed niche audiences: UMC (Urban Movie Channel) featuring content for African American audiences, and Acorn TV, featuring British TV and film content.

AMC already owns 26 percent of RLJ Entertainment, Variety reported. It’s offering about $16 million to buy the shares it doesn’t currently own and shares unaffiliated with Johnson.

Johnson became the first African American billionaire in 2000 after he sold the company he founded — Black Entertainment Television (BET) — to Viacom for $3 billion in stock and assumed debt.

AMC Networks owns and operates cable TV channels AMC, IFC, SundanceTV, WE tv, and IFC Films, and operates BBC America and AMC Networks International, its global division.

Johnson is no longer a billionaire, Forbes reported in 2009:

Since then, sagging Viacom and CBS stock, plus investments in real estate, hotels and banks–industries pummeled in the recession–have dragged Johnson’s net worth to $550 million.

Forbes’ $550M net worth estimate of Johnson is nine years old. A lot can change in nine years.

From Variety. Story by Todd Spangler

The deal comes after AMC invested $65 million in RLJ last fall to take a 26-percent stake in the form of loans (which have subsequently been increased to an aggregate of $78 million). That agreement gave AMC the option to purchase majority ownership, and on Monday AMC said it will acquire the 27 percent of the outstanding shares in RLJ Entertainment that it doesn’t already own for a purchase price of $4.25 per share in cash. Johnson will retain a minority stake in the company; he currently owns approximately 47 percent of the outstanding shares of RLJ Entertainment common stock.

Shares of publicly traded RLJ Entertainment popped 9.8 percent Monday, to the $4.25-per-share price being offered by AMC Networks.

For the third quarter of 2017, RLJ Entertainment reported net revenue of $20.9 million, up 13.9 percent year-over-year, driven by a 58.6 percent increase in digital channels revenue.

In January, RLJ Entertainment announced that its two streaming services, Acorn TV and UMC, had topped 700,000 subscribers, up 55 percent from a year earlier.

Under the pact, AMC said it would run RLJ Entertainment as a privately owned subsidiary of AMC Networks, with a minority stake held by Johnson. In announcing the deal, AMC Networks said it “has no interest in disposing of its stake in RLJ Entertainment or participating in any other strategic process.”

For AMC, RLJ Entertainment is part of its ongoing push into online-streaming and original digital content.

AMC took a minority stake in “Funny Or Die” last year and led a $16.5 million round of funding in upstart digital studio Adaptive Studios. It operates the Shudder and SundanceNow over-the-top service and AMC Premiere, a commercial-free subscription service offered as an option to pay-TV subscribers.

Read more at Variety.

 

RLJ Entertainment
Photo: AMC Networks President and CEO Josh Sapan/RLJ Entertainment head Robert Johnson