Lion Gate CEO Jon feltheimer disclosed the details of the company's plan to spin off the Starz streaming media department before the end of the summer at the investor conference call on Thursday, May 26, local time In addition, he also hinted that if Lions Gate and Starz were separated, there might be more mergers and acquisitions.
"Our goal is to announce our plans by the end of the summer and we expect the transaction to be completed as early as our fourth quarter," feltheimer said In addition, he added, the company is in dialogue with bankers and some potential strategic partners.
Although he did not disclose who these potential partners were, this confirmation followed previous reports. As early as a earnings conference call in the autumn of 2021, the company announced that it was exploring the strategic choice of cable TV network and streaming media because it failed to provide power for Lions Gate. One solution is to sell all or part of the assets. Michael burns, COO of Lions Gate, said: "although we continue to achieve a lot of synergy from the merger of Lions Gate and Starz, we also see that it is possible to release a huge shareholder value when investors are able to evaluate our studio assets and Starz separately."
Feltheimer pointed out last week that the expectation is that the lions keeper will retain some ownership of Starz, but he also said that "anything can happen". DirecTV is one of many media companies that want to buy shares, as well as roku and Apollo global management, who have jointly bid. Another potential acquirer is canal+ under Vivendi, a French conglomerate.
Lions Gate acquired Starz at a price of US $4.4 billion in 2016. With the passage of time, its customer base has grown steadily, with an increase of 4.8 million in this quarter, reaching a total of 35.8 million. In a conference call last week, the CEO said that they predicted that by the end of fiscal 2025, Starz's global users (TV and streaming media) would reach 50million to 60million. The healthy number is another reason for Shimen to choose to separate Starz at this moment.
Feltheimer stressed that Starz's goal is not to compete with larger streaming media competitors, but to "layer" them as a niche, ad free service.
Although Starz has strong content, the new company certainly needs the support of other partners to succeed. As for which company thinks Starz has enough value to pay the necessary expenses, let's wait and see.