AMC and DISH Work Out a New Deal: The Zombies are Back

The zombies are back if you're a DISH Network (Nasdaq: DISH  ) subscriber. So are the crystal meth dealers.

That's what happens when you settle your differences with AMC Networks (Nasdaq: AMCX  ) . The network's slate of popular dramas have been off the menu for DISH customers since June, when the satellite broadcaster blacked out several AMC-managed channels. The contract between the parties expired this summer, and renewal talks broke down over AMC's higher price tag.

"AMC Networks requires us to carry low-rated channels like IFC and WE to access a few popular AMC shows," Dish said at the time. "The math is simple: it's not a good value for our customers."

Moreover, the broadcaster felt that AMC had "devalued" its admittedly popular dramas, like The Walking Dead, Breaking Bad, and Mad Men, by selling them to outlets such as Netflix (Nasdaq: NFLX  ) , Amazon.com (Nasdaq: AMZN  ) , and Apple (Nasdaq: AAPL  ) iTunes. All of these distribution channels are delivered over the open Internet, leaving traditional middle men out of the equation altogether -- and AMC is loving the brand-stretching value of these new alternatives.

But the tenor has changed in a hurry now that the contract and a related lawsuit have been settled. DISH tucked the AMC deal into a press release about defunct high-def channel Voom, which ends up costing Dish $700 million in cash but nets the company some 500 MHz of satellite-grade radio spectrum in return. Voom was a subsidiary of AMC with partial ownership by DISH and Cablevision (NYSE: CVC  ) until DISH walked away from its 15-year distribution agreement after just two years, effectively killing the channel.

As for AMC's current content, "This multi-year deal delivers a fair value for both parties," DISH said. The press release does not state how many years the deal covers.

AMC kept its official response very Spartan: "We are glad to partner again with DISH Network and are delighted to bring back our popular channels and programming to their customers."

So it's curtains on this drama, at least for the length of this long-term agreement. The zombies are back in your living room, just in time for Halloween.

Fool contributor Anders Bylund owns shares of Netflix and has created a bull call spread on top of those shares. Check out Anders' bio and holdings, or follow him on Twitter and Google+. The Motley Fool owns shares of Apple, Amazon.com, and Netflix. Motley Fool newsletter services recommend Apple, Amazon.com, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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10/24/2014 3:59 PM
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