Entertainment heavyweight Lionsgate revealed details on Thursday about its plans to spin off its STARZ streaming unit by the end of summer 2022. The company confirmed its intention during an investor call following its fiscal fourth-quarter earnings.
CEO Jon Feltheimer told the firm’s backers that Lionsgate is “engaged in a robust and productive process with our bankers and a number of potential strategic and financial partners” to take the company solo. Feltheimer did not disclose the identities of the possible collaborators, but the confirmation follows earlier reports that Roku and DIRECTV are among a slew of media companies looking to purchase a stake in the new operation.
Lionsgate acquired STARZ in the summer of 2016 for $4.4 billion, the coda to a more complex investment deal with its previous majority owners. Still, though STARZ has steadily grown its customer base since then, Lionsgate has had some bumpy quarters of late, posting a $45.6 million loss for fiscal Q3 2022.
With this in mind, it’s possible that Lionsgate is choosing this moment to send STARZ out on its own because the unit is continuing to post healthy numbers; STARZ added 4.3 million streaming subscribers between January and March, bringing it to 24.5 million worldwide. Indeed, in the U.S. alone, it now has 11.5 million customers tuning in over an internet connection, rather than a cable box.
With bedrock shows such as “Outlander” and the seemingly ever-expanding “Power” franchise, STARZ has a strong content base to stand on its own.
But if it is to compete against Netflix, Disney+, HBO Max, and the rest of the premium field, the new company will almost certainly require deep pockets — something Lionsgate seemingly can’t provide without support. The question now is, will the firm find the partners who believe there’s still enough value for STARZ to unlock? Perhaps more importantly, can they stomach the costs?
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.”