According to a report from Coming Soon, Lionsgate has acquired Starz, an American premium cable and satellite television network that features mainly theatrically released motion pictures and some first-run original television series. The deal was for a combination of cash and stocks worth $4.4 billion. Continue reading below for the full report.
“The two companies combined will now encompass: a 16,000-title film and television library; the largest independent television business in the world, including 87 original series on 42 U.S. networks; a feature film business that has generated over $7 billion at the global box office over the past four years; operation of or investment in 30 channel platforms around the world, including the flagship STARZ platform reaching 24 million U.S. subscribers, the STARZ ENCORE network with over 32 million subscribers and five OTT services; and a growing presence in location-based entertainment and video games driven by the company’s deep portfolio of brands and franchises.
“The combination of Lionsgate and Starz brings significant scale to our portfolio of content and distribution assets and will enable us to compete successfully in today’s rapidly evolving global entertainment marketplace,” said Dr. Mark H. Rachesky, Lionsgate’s Chairman of the Board. “By bringing together complementary resources, premium quality intellectual property and exceptional management, this strategic transaction positions us extremely well to unlock the underlying value of our content to create substantial lasting value for our shareholders.”
“This transaction unites two companies with strong brands, complementary assets and leading positions within our industry,” said Lionsgate Chief Executive Officer Jon Feltheimer and Vice Chairman Michael Burns. “We expect the acquisition to be highly accretive, generate significant synergies and create a whole that is greater than the sum of its parts. Chris Albrecht and his team have built a world-class platform and programming leader, and we’re proud to marshal our resources in a deal that accelerates our growth and diversification, generates exciting new strategic content opportunities and creates significant value for our shareholders.”
Greg Maffei, Chairman of Starz, said, “Chris Albrecht and his team have grown Starz into an industry leader that provides highly-rated and diverse content, drawing critical claim and brand recognition for Starz. Together, Lionsgate and Starz form an entertainment powerhouse with a world-renowned studio that produces blockbuster movies and channels with must-have programming that will be able to capitalize on content opportunities across multiple platforms. The combined company will be well-positioned to return more value to our shareholders and effectively compete in the global media marketplace.”
“Jon, Michael and the rest of the Lionsgate team have built the first major new Hollywood studio in decades, and we’re thrilled to join with them in a transaction that multiplies the strengths of our respective businesses,” said Starz Chief Executive Officer Chris Albrecht. “Our similar entrepreneurial cultures and shared vision of the future will make this alliance an incredible fit that creates tremendous value for our shareholders, great content for our audiences and limitless opportunities for our newly-combined company. I am very appreciative of the work, passion and dedication of both of our companies’ employees and more enthusiastic than ever about the future of our business.”
The agreement has been approved by the boards of directors of Lionsgate and Starz and will be submitted to their respective shareholders for approval as well as to regulatory authorities. The proposed creation of Lionsgate non-voting stock is also subject to shareholder approval. Closing is expected to occur by year-end.”
So what does this mean for film and TV viewers, not much. Lionsgate has become a bigger player in the cinematic world following the huge success of Hunger Games. However, their would-be franchises following that juggernaut haven’t fared well and this provides then with a large catalog of additional titles. The question of acquiring Starz is that now with a larger percentage of television viewing coming from streaming media services like Netflix/Amazon/Hulu/etc., how will that eat into the profits from a pay television service like Starz? So on the plus side, it makes Lionsgate a larger studio that can better compete with the likes of Disney, Time Warner, Comcast, etc. and makes them a potential buyer in the future with a smaller likelihood that they’d be gobbled up by one of the large studios. On the flip side, this doesn’t solve their problem of bankable film franchises and they will need to re-evaluate Starz moving forward to make sure it remains profitable in a changing media landscape.
What do you think about the deal? Do you think this merger is mutually beneficial to both Lionsgate and Starz? Share your thoughts below.