Lionsgate on Pace to announce the sale of Starz in September; Studio also potentially up for grabs – The Streamable


September is shaping up to be 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 offload the channel and its streaming service, but company executives revealed in a call with investors Thursday that there are also talks of adding the studio’s library to the market. With the MGM/Amazon merger making big money for everyone involved, Lionsgate is sure its library will be much more attractive to investors.

When MGM and Amazon joined forces earlier this year, the $8.5 billion deal whetted quite a few appetites. Lionsgate CEO John Feltheimer believes the treasure kept in the studio’s catalog is the perfect thing to sate its investors’ hunger. With a “fresher and newer” library than MGM, the studio would make a great buy. Even so, Lionsgate is taking hesitant steps in this direction, preferring a “fair, not fast” approach to any transaction.

Streaming arm Starz already has plenty of value, especially after adding 1.8 million subscribers to its roster according to its second-quarter earnings report. In May, Feltheimer said the Starz deal should be finalized by the end of the summer, a prediction that appears to be on track. Lionsgate plans to announce the finer details in September, with the effort finally wrapping up next spring.

The studio may not look as shiny as the gem it’s trying to sell. In its own second-quarter earnings report, profits fell from $901.2 million to $893.9 million, while losses fell from $45.4 million to $119 million. On the movie side, revenue fell 4% to $278.8 million, but profits rose 14%. This is likely due to a slower movie release schedule due to the pandemic, and with less content in theaters, advertising budgets may be reduced. Meanwhile, television production revenue jumped 12% and segment profits rose 500% to $19.6 million.

Among those keen to take over Starz, French conglomerate Vivendi’s Canal+ is at the forefront, with Roku, DIRECTV and Apollo Global also in the mix.

As the streaming industry continues to fluctuate, companies are struggling to find the best ways to monetize their content and platforms. Starz has been on the verge of sale for quite some time, but with renewed interest in the studio itself, Lionsgate looks like the next big risk in the ever stormy sea of ​​digital media distribution.

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