AMC Networks' (AMCX -0.60%) $1 billion bid for Chellomedia may pay off sooner than anyone thinks, Fool contributor Tim Beyers says in the following video.
In buying, AMC gets access to an array of international channels that deliver service to some 390 million households in 138 countries. Adding distribution in this way allows AMC to expand the footprint of its most popular original programming without giving away profits to those who might have broader reach.
Consider The Walking Dead. The popular zombie drama is a self-produced show, but AMC has already struck distribution arrangements with 21st Century Fox (FOXA) and E1. Those deals will persist even as the Chellomedia acquisition closes. AMC won't have to suffer that burden with future properties, which could juice margins as distribution fees and advertising revenue grow, Tim says.
Do you agree? Do you believe in AMC's expansion plans? Please watch the video to get Tim's full take, and then leave a comment to let us know what you think.
