Program Rights and Obligations

12 Months Ended

Dec. 31, 2020

Program Rights and Obligations

Program Rights

Effective January 1, 2020, the Company adopted FASB ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials. The new guidance impacts the Company as follows:

•Allows for the classification of acquired/licensed program rights as long-term assets. Previously, the Company reported a portion of these rights in current assets. Advances for live programming rights made prior to the live event and acquired/licensed program rights with license terms of less than one year continue to be reported in current assets.

•Aligns the capitalization of production costs for episodic television programs with the capitalization of production costs for theatrical content. Previously, theatrical content production costs could be fully capitalized while episodic television production costs were generally limited to the amount of contracted revenues.

•Introduces the concept of “predominant monetization strategy” to classify capitalized program rights for purposes of amortization and impairment as follows:

◦Individual program rights - programming value is predominantly derived from third-party revenues that are directly attributable to the specific film or television title (e.g., theatrical revenues, significant in-show advertising on the Company’s programming networks or specific content licensing revenues).

◦Group program rights - programming value is predominantly derived from third-party revenues that are not directly attributable to a specific film or television title (e.g., library of program rights for purpose of the Company’s programming networks or subscription revenue for AMC Networks Streaming Services).

The determination of the predominant monetization strategy is made at commencement of production and is based on the means by which the Company derives third-party revenues from use of the programming. The classification of program rights as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment.

Total capitalized produced and licensed content by predominant monetization strategy is as follows:


	December 31, 2020
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:
Completed	$	203,388	$	12,808	$	216,196
In-production and in-development	228,713		19,258		247,971
Total owned original program rights, net	$	432,101	$	32,066	$	464,167

Licensed program rights, net:
Licensed film and acquired series	$	8,261	$	551,878	$	560,139
Licensed originals	201,992		—		201,992
Advances and content versioning costs	—		56,313		56,313
Total licensed program rights, net	210,253		608,191		818,444
Program rights, net	$	642,354	$	640,257	$	1,282,611

Current portion of program rights, net					$	13,480
Program rights, net (long-term)					1,269,131
					$	1,282,611

Amortization, including write-offs, of owned and licensed program rights is as follows:


	Year Ended December 31, 2020
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights	$	349,078	$	61,108	$	410,186
Licensed program rights	94,534		419,166		513,700
Program rights amortization	$	443,612	$	480,274	$	923,886

The Company estimates amortization within the next three years will be approximately 88% and 93% of unamortized owned original programming costs and unamortized licensed program costs, respectively, as of December 31, 2020. The Company expects to amortize approximately $115.1 million of unamortized owned original programming costs during the next twelve months. Program rights write-offs of $108.3 million, $40.9 million and $50.5 million were recorded for the years ended December 31, 2020, 2019 and 2018, respectively.

Program Rights Obligations

Amounts payable subsequent to December 31, 2020 related to program rights obligations included in the consolidated balance sheet are as follows:


(In thousands)
Years Ending December 31,
2021	$	259,449
2022	103,986
2023	49,529
2024	26,233
2025	1,931
Thereafter	832
	$	441,960