S&P lowers AMC Networks

S&P said it downgraded its ratings on AMC Networks Inc. and its senior unsecured debt to BB- from BB and lowered the unsecured debt’s recovery rating to 4 from 3. The agency also trimmed AMC’s secured debt to BB+ from BBB-. The 1 recovery rating on the secured debt is unchanged.

“AMC's announced restructuring efforts and programming changes will reduce its costs but also slow its revenue expansion. In December 2022, the company announced content programming write-downs of $300 million-$400 million and charges related to headcount reductions of roughly $50 million-$75 million. We expect that roughly $75 million-$100 million of these charges will be cash costs to be paid in 2023 and anticipate the headcount reductions will be broad-based across the organization,” S&P said in a press release.

S&P said it considers this restructuring indicative of a weaker competitive position for the issuer.

The agency also said it expects AMC's revenue will decline by 2%-5% in 2023 and 7%-9% in 2024 due to losses in its linear business.

The outlook is negative.

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