AT&T (NYSE: T) said it hopes to strike a deal with AMC Networks by June 30 that would allow it to continue distributing AMC, WE tv and IFC to U-verse TV subscribers, but the telco is refusing demands that it nearly double the license fee it pays to carry the cable networks.
"AMC Networks is asking that AT&T pay nearly double what we believe other competitors pay—including a smaller-sized competitor. We believe the rates they are seeking are disproportionate compared to the viewership we see across their channels," AT&T said in a statement.
Formerly known as Rainbow Holdings, AMC was spun off by Cablevision (NYSE: CVC) last year. The company is waging battle with Dish Network (Nasdaq: DISH), whose contract is also set to expire on June 30. AMC has seen ratings increase from the popularity of original programs such as Mad Men and Breaking Bad. But the fact most U-verse TV viewers subscribe to bundles of high-speed Internet and telephone service from AT&T makes it doubtful that a significant number of subscribers would switch providers in order to watch AMC programming.
AMC's distribution disputes – and the impact that they could have had on ad revenue – has hurt its stock, which has dropped about $10 per share since March. AMC shares were trading at $35.35 at noon ET on Thursday, down about 3 percent for the day.
- see AT&T's statement
AT&T 'optimistic' that it can grow U-verse subscribers
Dish threatens to drop AMC Networks
Cablevision sets June 30 as the end of the Rainbow
Netflix outbids AMC, HBO for original programming