Starz CEO Jeffrey Hirsch has shed light on parent Lionsgate exploring its options for the premium pay TV and streaming platform, including a sale or spinoff of Starz from its studio operations.
“As a stand-alone, there’s opportunities to accelerate growth,” Hirsch told the UBS Global TMT Conference during a session that was webcast on Wednesday.
In an early November regulatory filing, Lionsgate said its management team was exploring possible strategic alternatives for its Starz business, whether that was a full or partial spinoff, split-off or other transaction amid continuing industry consolidation. Lionsgate has also been approached by a special purpose acquisition company (SPAC) looking to spin off Starz, The Hollywood Reporter previously reported.
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“The street reacted positively to the news, so I think our board and our shareholders are aligned on doing something structural to the business,” Hirsch said. The executive added that Starz is already structured as a stand-alone business since merging with Lionsgate and its studio operations.
“We have a CFO, we have a head of HR. We have a separate marketing group. So all the personnel stuff that would have to happen to actually break the company apart is already in place,” Hirsch said. Even if a sale or spinoff of Starz allows investors to value the pay TV and streaming platform separately from Lionsgate’s studio assets, Hirsch said the synergies from bringing Lionsgate and Starz together could still be realized.
“The work we’ve done will continue whether we are the same company or a separate company — we’re a big buyer of content,” Hirsch insisted. Starz is a pay TV channel similar to HBO and Showtime, and also offers an OTT service that counts 18 million global streaming subscribers.
Its programming includes the Power franchise, Blindspotting and Hightown. Lionsgate acquired Starz in 2016 for $4.4 billion.
Hirsch ruled out an advertising video-on-demand version of Starz, as it relied instead on a subscription VOD model being rolled out internationally. “You won’t see us fighting with the Rokus and the Amazons because we’re not trying to control the consumer,” he argued.
