Lionsgate Files Paperwork to Spin Off Starz, Movie Studio into Separate Companies; Could Sale of One Be Coming?
After more than a year of speculation and maybes, there is finally concrete action to report on Lionsgate and its plans for its premium cable channel and streaming service Starz. The company filed a public Form 10 with the SEC this week, which — if approved by regulators — would allow the company to split into two entities.
One of these entities will be purely focused on Starz, while the other would continue to focus on the Lionsgate movie and TV studio. According to the filing, the two new firms will be creatively named “New Starz” and “New Lionsgate.”
“We remain excited by the prospect of separating Lionsgate and Starz into standalone companies with strong financial foundations that will allow each company to pursue its own distinct strategy while offering investors the opportunity to own both a pure-play publicly traded content studio and a premium subscription platform,” Lionsgate CEO Jon Feltheimer said.
Splitting the company into two allows Lionsgate to be more flexible with the constituent parts. Last summer, Lionsgate stoked speculation that it would attempt to spin off Starz in order to make it more attractive to potential buyers. In the fall, the situation flipped on its head as it began to seem the company was more interested in keeping Starz and spinning off its movie studio instead.
It’s been a mixed bag in terms of subscriber additions this year for Starz. In the fourth quarter of 2022, the streaming service lost more than a million customers, causing some talk that the company was running out of options. But in the first quarter of 2023, it surprised by adding 700,000 users, and doubled down on that success by announcing a price increase from $8.99 per month to $9.99.
There is still popular intellectual property that comes with the Starz brand, like the “Power” franchise and the time-travel action/romance series “Outlander.” The price increase may have been intended to show potential buyers of Starz that the company can monetize its users effectively, or it may have been the first in a series of moves designed to make Starz the centerpiece of a new company.
Only time will tell, but at least the new SEC filing to split Lionsgate into two companies shows that more movement is soon to come. Now that Lionsgate is set to become “New Lionsgate” and “New Starz,” viewers might find themselves hearing new news on a potential sale of one of those entities before too long.
STARZ
STARZ offers a subscription video streaming service that gives access to content on the STARZ channel without the need of a cable subscription. With your subscription, you’ll get access to 7,500+ films and episodes, including all of their current originals like “Outlander,” The Serpent Queen,” “BMF,” and “Power.”