Can Comedies Give AMC Networks Inc. the Last Laugh?

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This March, AMC Networks (NASDAQ: AMCX  ) announced the development of two half-hour scripted shows, indicating that the network known for acclaimed dramas like Breaking Bad and Mad Men is now getting into the comedy game. There are good reasons for the network to incorporate comedies into its schedule, and reason to believe two of its current 30-minute pilots will perform well.

The as-of-yet untitled John Leguizamo-starring project follows a group of guys in New York wrestling with careers and relationships. Leguizamo also co-wrote the pilot script, which is inspired by the lives of the comedian and his friends.

AMC's other project, No Money Down, stars Wyatt Cenac of The Daily Show as a guy who hits rock bottom and starts over with a job at a car dealership in Austin, Texas.

Following broadcast's trends?
The Leguizamo project shouldn't come as a surprise for anyone following the broadcast network pilot season. Right now, shows based on the lives of comedians are garnering a lot of attention. For example, Disney's ABC is close to ordering a pilot based on the life of comedian Kevin Hart, with Hart also executive producing.

Two other comedians, Jim Gaffigan and Jerrod Carmichael, also have semiautobiographical projects in contention this pilot season. Gaffigan's pilot is at CBS and gaining more buzz after the comedian's April 27 stand-up special on Comedy Central reached 1.1 million viewers and hit a .85 in the 18-49 demographic. This was the highest-rated stand-up special for the comedy network this month. For his part, Carmichael's pilot at Comcast's NBC might get a boost as the up-and-coming comedian just landed a stand-up special on HBO directed by Spike Lee.

Cable rival FX, which is owned by Fox, also enjoys success with its comedy Louie. The show, based on the life of comedian Louis CK, has garnered three Emmy nominations and enough critical praise that the network signed an overall deal with Louis CK at the end of last year.

Reaping the benefits of repeats
Comedies perform better in syndication than do serialized dramas. In the week ending April 20, the only scripted drama in the Top 20 syndication ratings was Law & Order: Criminal Intent. But comedies Modern Family, The Big Bang Theory, Family Guy, and Two and a Half Men all made the list.

This is significant because networks like AMC can make money by selling their wholly owned shows into syndication.

How much money is involved in such sales? It depends on a variety of factors, but the deal for FX to carry the hundreds of episodes that make up The Simpsons is believed to cost the cable network an estimated $800 million to $1 billion over 10 years.

That, of course, is an extreme example, but still, cable network USA paid approximately $1.4 million per episode of Modern Family. TBS reportedly spent about $1.5 million per episode of The Big Bang Theory as well as $1.7 million per episode of 2 Broke Girls.

An overdue move
It seems like moving into comedies should have been a no-brainer for AMC, which, like any good investor, wants to diversify its portfolio and open up new sources of revenue. Time will tell if these particular comedies succeed, but based on current successful trends in television, the network seems to be on the right track.

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9/4/2015 3:59 PM
AMCX $72.13 Up +0.54 +0.75%
AMC Networks CAPS Rating: ****