*AMC Networks has announced a partnership agreement with Robert Johnson’s RLJ Entertainment that calls for AMC to provide RLJ with $65 million in loans and obtain the right to acquire as much as half of the company, reports Variety.
RLJ Entertainment, headed by the founder of BET Networks, consists of the streaming services Acorn TV, which offers British programming, and Urban Movie Channel. AMC sees those SVOD outlets as a fit with its BBC America and We TV cable channels, respectively. AMC will use its programming and distribution clout to benefit Acorn and UMC. RLJ will remain a separate entity that is publicly traded on the Nasdaq.
“This capital infusion will allow us to continue to grow the value of our businesses,” Johnson told Variety. “We both recognized the synergies in our content. This partnership gives us the potential to develop other opportunities in digital (content).”
Johnson and AMC Networks president-CEO Josh Sapan reportedly go way back. Johnson was among the first entrepreneurial programmers to recognize cable’s potential for serving niche audiences with the launch of Black Entertainment Television in 1980. The RLJ-AMC partnership will allow for greater investment in content from African-American creatives, Johnson emphasized.
Sapan said he was impressed with the level of business activity the RLJ team had generated in a short time.
“When we look at the assets, it’s remarkable how sympathetic they are,” Sapan said. AMC and RLJ’s TV and digital platforms make film production more feasible “because you can move them through different windows.”
The agreement calls for AMC to provide RLJ with a $60 million loan on a seven-year term and $5 million on a one-year term. AMC has received warrants to purchase at least 20 million shares or the equivalent of 50.1% of the company. The time frame for exercising those warrants is open-ended, AMC said.
The agreement was hammered out in August and approved by RLJ shareholders on Friday.
“There is tremendous talent out there that is under-employed,” Johnson said. “To bring about a business model that responds to a social need and a creative opportunity — that’s what makes this deal something that is so exciting and important.”
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