Lionsgate on Pace to Announce Starz Sale in September; Studio Also Potentially Up for Grabs
September is looking like a good month for Lionsgate as it moves forward with its plans to spin off premium cable network Starz. Not only does it aim to unload the channel and its streaming service, but company executives revealed during a call with investors on Thursday that there are also talks of adding the studio’s library to the bargain as well. With the MGM/Amazon merger earning beaucoup bucks for all involved, Lionsgate is sure its library will look far more appealing to investors.
When MGM and Amazon joined forces earlier this year, the $8.5 billion dollar deal whet quite a few appetites. Lionsgate CEO John Feltheimer feels the treasure guarded within the studio’s catalog is the perfect thing to satiate his investors’ hunger. With a “fresher and newer” library than MGM, the studio would make an excellent purchase. Even so, Lionsgate is taking hesitant steps in that direction, preferring a “right, not fast” approach to any deals.
The Starz streaming arm already has a lot of value, especially after adding 1.8 million subscribers to its ledger according to its second-quarter earnings report. In May, Feltheimer stated that the Starz deal should be finalized by summer’s end, a prediction that appears to be right on track. Lionsgate plans to announce the finer details this September, with the effort finally closing next spring.
The studio may not look as shiny as the jewel it’s trying to sell. In its own Q2 earnings report, profits fell from $901.2 million to $893.9 million, while losses widened from $45.4 million to $119 million. On the motion picture front, revenue decreased by 4% to $278.8 million, but profits saw an uptick of 14%. This is most likely due to a slower film release schedule due to the pandemic, and with less content in theaters, advertising budgets can be slashed. Meanwhile, television production revenue shot up 12% and segment profits rose by 500% to $19.6 million.
Of those interested in grabbing Starz, Canal+ of the French conglomerate Vivendi stands in the forefront, with Roku, DIRECTV, and Apollo Global also in the mix.
As the streaming industry continues to fluctuate, companies are struggling to figure out the best ways to monetize their content and platforms. Starz has been on the sales floor for some time, but with fresh interest in the studio itself, Lionsgate appears to be the next big risk in the ever-stormy sea of digital media distribution.
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.”