Liberty Media CEO Debates Merits of a Starz-Netflix Merger

 

Would Starz, which will soon be a separately traded company, consider a merger with Netflix?

The scenario was mulled over during an investor conference on Tuesday, and Greg Maffei, CEO of Starz' parent company Liberty Media, didn't dismiss the notion.

"You could could make a case that Netflix needs Starz' cash flow and that Netflix would benefit from being able to distribute Starz original programing more broadly," Maffei said at the Citi Global Internet, Media & Telecommunications Conference in Las Vegas.

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Analysts have sensed that there's no love lost between Starz and Netflix since the two failed to extend a licensing agreement. Netflix said a month ago it will license Disney content directly through Disney when its Starz deal expires, and Maffei didn't seem impressed with the Netflix-Disney arrangement, which is estimated at $300 million annually.

The announcement of a Disney-Netflix deal came as Liberty prepares to spin off Starz, and Maffei suggested the timing was fishy.

"If you were Netflix, was that motivated perhaps by some sort of PR? One could guess that that might have been on their minds," Maffei said, "since, you know, it doesn't become effective in terms of seeing films on Netflix until 2017. That is a virtual lifetime in premium television."

Maffei was asked if the Netflix-Disney announcement "was designed to intentionally impinge upon the value the market will ascribe to Starz."

"You know, maybe," he said. "That would suggest Reed is more evil than some people think," Maffei said, referencing Netflix CEO Reed Hastings. "I think he did it for his own set of reasons and less about us."

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Liberty Media announced Tuesday just prior to Maffei's presentation that it expects to change its name to Starz and begin trading under the symbols STRZA and STRZB for its Series A and Series B stock beginning on Jan. 14.

The company is spinning off its non-Starz assets and the spin-off company will be named Liberty Media. Those shares will trade under the symbols LMCAD and LMCBD beginning Jan. 14, then they'll each drop the "D" on Jan. 22 and beyond.

Both Starz and Liberty Media will trade on Nasdaq.

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