Lionsgate runs the Starz Spin-off as a multi-competitor ring on the pay-TV platform –

Official: Lionsgate is in talks with several competitors for a potential spin-off of Starz’s premium studio and pay TV operations on the streaming platform.

Lionsgate CEO John Fellheimer briefed analysts on the studio’s plans to create two separate companies so investors could value Starz and the studio’s assets separately.

“We are engaged in a robust and fruitful process with our bankers and many potential strategic and financial partners. “Our goal is to announce our plan at the end of the summer and we expect the transaction to close as soon as our fiscal fourth quarter,” Feltheimer said at the start of the analyst conference call.

The Lionsgate boss was reluctant to give analysts too many details about the potential Starz spin-off as the entertainment industry is hit by falling stock prices on Wall Street. “This is the plan we have now. Our opinion now is that we don’t sell everything. “But anything can happen, so we won’t go into any further details right now,” Feltheimer said.

He added that the current stock market crisis is not expected to have a major impact on the potential timing of Starz’s spin-off. “Obviously, everything can change. We are now in an incredibly devastating environment. “But given the conversations we’re having, we think this is the right time,” said Feltheimer, when a potential transaction could be announced and completed.

Lionsgate executives argued that Studio and Starz should become separate companies because the pay-TV platform was separate from the studios’ business. Chief Financial Officer Jimmy Burge told analysts that “under a separate business structure, each company will focus on its respective core businesses.”

Lionsgate shares rose 43 cents, or just over 4%, to $11.00 after news of a possible spin-off in Starz trading. News of Starz’s spin-off talks came after the studio released its fourth-quarter financial results, including its recent Starz subscribers, as it weighs pay-TV branding options.

The study saw Starz’s global streaming subscriber base grow 47% year-over-year to 24.5 million, while the global pay-TV brand’s subscriber base reached 35.8 million, which includes StarzPlay Arabia.

Starz’s steady rise in digital subscribers will be followed by Roku, Vivendi’s Canal+ and Apollo Global Management, reportedly among some minority bidders for Lionsgate-owned cable and streaming services as it raises capital for its global expansion.

Lionsgate has long been expected to consider selling Starz or Spinoff, which it bought for $4.4 billion in 2016, potentially leading to the creation of two separate businesses. In November 2021, the board authorized Lionsgate management to consider a “full or partial spin-off” of Starz, among other options, pursuant to a then-current regulatory document.

Starz is known for shows like unknown s Ძალა Franchise. Starz and Starzplay Arabia’s global streaming subscriber base was growing at a time when other platforms were worried about falling numbers, with market leader Netflix recently announcing a sudden loss in its customer base.

Investors will watch Lionsgate’s fourth quarter results and analysts will call later this afternoon to see if Starz sees a slowdown in the addition of online TV subscribers amid threats of an internal recession, as well as its addition to Starz’s global supplements. .

“Our biggest investment in content is working on Starz. During the year, we increased our global subscribers by 21% and reduced our national decline by nearly 20%. In fact, for the top two shows in the grand series, March was our fourth fastest-growing month for streaming subscribers, and subscriber acquisition costs dropped significantly,” Feltheimer told analysts.

Starz CEO Jeffrey Hirsch added that the pay-TV brand will not present ad-supported video-on-demand offerings to Starz because the platform is focused on a subscription model.

Lionsgate announced a $107.9 million expansion in net loss, up from $41.8 million a year earlier. The loss per share was 46 cents, down from 17 cents in the three months to March 31 of last year.

Fourth-quarter total revenue was $929.9 million, compared to $876.4 million a year earlier. That fell short of the Wall Street analyst’s forecast of $961 million in revenue last quarter.

Media network revenue, which primarily includes Starz, reached $380.2 million, down 5.2% from $401 million a year earlier, which included revenue from streaming services. Additionally, the decline in domestic linear revenue is offset by higher domestic revenue streams and international revenue from StarzPlay.

Movie segment revenue was $288.1 million, down 1.5% from $292.4 million. And television production revenue increased 75 percent to $370.2 million, up from $210.7 million a year ago.