Michael Newberg | CNBC
Lionsgate It is leaning toward separating its studio division rather than its broadcast and cable unit Starz, according to people familiar with the matter.
This will be a change of strategy for the media and entertainment company, which It said in May that it expects to either finish or sell Starz by the end of the summer. In recent months, Lionsgate has been in talks to sell a 20% stake in Starz to a number of potential buyers, including recently Vivendi-owned Canal+, said the people who requested anonymity because the discussions are private. People said those conversations aren’t over, but that no deal is imminent.
People said Lionsgate is in talks with several potential partners about selling a stake in the studio’s business. And people said these conversations are more likely to reach an agreement that Lionsgate is more comfortable with than Starz because there’s a stronger interest. The studio’s work produces films and television series, and includes a library of more than 17,000 titles, such as “The Hunger Games”, “The Expendables” and “Mad Men”.
Lionsgate is expected to make an official announcement of its new plans as early as Wednesday. A Lionsgate spokesperson declined to comment.
In the deposit of securities on Wednesday morningThe company said it was “still on the road” toward separating Starz from the studio’s business. “As negotiations progress, we have increased our focus on the possibility of running our studio business, creating a number of financial and strategic benefits. In this regard, we are continuing fruitful negotiations with potential strategic and financial partners on both sides of our business,” the filing said.
On Wednesday morning, the company’s shares rose about 1%.
Selling a studio stake to a private equity firm or strategy firm will set a valuation floor for the company to trade on its own. It would also bring an immediate capital jolt to Lionsgate, whose shares have plummeted in recent years. The market valuation of Lionsgate is About $1.8 billion, down from about $7 billion in early 2018.
People said Lionsgate is interested in the long-term interest in selling both the studio and Starz. The company competes with much larger entities – including netflix, DisneyAnd the AmazonAnd the apple And the ComcastNBCUniversal – In television and film productions. Lionsgate executives hope the studio and Starz separations will be first steps toward facilitating the sale of both units to maximize shareholder value, the people said.
“We’re not going to make a stupid deal on one or both sides of the business,” said Michael Burns, vice president of Lionsgate. During a media and entertainment conference for Bank of America Last month. “I think our shareholders will be very pleased with the result.”
People said Lionsgate is also planning to rename its international streaming service, Starzplay, to Lionsgate+. One person said the rebranding will take place in 35 countries in Europe, Latin America and Asia Pacific, including the United Kingdom, France, Germany, Australia and Japan. company Confirmed the change later Wednesday morning.
The person said the Starz streaming service will maintain the Starz brand in the United States and Canada. Starz is present in 63 countries and Last quarter ended With 26.3 million global broadcast subscribers.
The Starz rebranding to Lionsgate+ also maintains the association between Lionsgate and Starz even when the businesses are separate.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
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