Under continued pressure from investors, Lionsgate is thinking about spinning off Starz into a separate company, in hopes of unlocking new value from the network, which it picked up in 2016 for $4.4 billion, The Wall Street Journal reports.
Shares have fallen about 60 percent over the past 12 months, with Wall Street now valuing Lionsgate at roughly $1.9 billion.
That’s partly due to the decision to pump hundreds of millions of dollars into Starz to jumpstart its expansion internationally, and grab new subscribers to Starz’s streaming apps. Lionsgate says it expects to add up to 25 million new subscribers to Starz within 5 years, operating the division at a loss until 2023, when executives say they expect to turn a profit.
In its most recent quarterly report, Starz said it grew its global subscriber base by 2.6 million customers year-over-year. Their global subscriber base now stands at 26.5 million accounts.
The network is best known for Power, Outlander and American Gods, available on Amazon Prime Video through a bundled deal.
In late September, Starz promoted former COO Jeffrey Hirsch to lead the network. The studio’s OTT streaming apps currently have around 4 million subscribers—a number that Hirsch hopes to double in the next two to three years.
This follows unconfirmed reports that CBS had offered to purchase Starz for $5 billion—an offer that Lionsgate turned down because it was too low.