Lionsgate, Starz Detail Integration Plans

Jon Feltheimer Getty H 2016
Mike Pont/FilmMagic

The two companies revealed merger-related details in internal communications to employees, with no word on possible layoffs.

Lionsgate and Starz aren't waiting for their $4.4 billion merger deal to close before unveiling an integration plan, according to disclosures in regulatory filings made Friday related to the transaction.

The two companies in virtually identical Sept. 1 employee memos, published in the Friday filings, said Deloitte Consulting has been hired to assist with integration planning. And Lionsgate and Starz have agreed on the leadership and structure of an integration planning team to make recommendations on possible synergies and cost savings.

Lionsgate and Starz in a previous SEC filing indicated that operating cost synergies from the proposed merger should reach $50 million and annual cash tax savings will exceed $150 million through fiscal year 2021. The annual cost savings are expected to come from eliminating jobs and the advantages of scale in production, manufacturing and marketing costs.

There's no word on merger-related job losses in the employee bulletins following the transaction, which is expected to close before the end of 2016. "During this initial planning phase, the integration team members will develop function-specific plans and recommendations for integrating and aligning policies, procedures and technologies," employees were told.

The combined Lionsgate and Starz entity will operate or be invested in 30 channel platforms around the world, including the flagship Starz platform that reaches 24 million U.S. subscribers, the Starz Encore network with over 32 million subscribers and five OTT services.

Lionsgate earlier said that CEO Jon Feltheimer will become CEO of the combined entity, while Michael Burns will remain vice chairman. Chris Albrecht, whose current contract as head of Starz runs through 2020, will remain president and CEO of Starz, running the premium cable network as he joins Lionsgate's executive committee with expanded duties.

Starz and Lionsgate will remain separate companies until the transaction is completed, with the merged company headquartered in Santa Monica, according to the SEC filings. Starz employees were told the company will have a "continued presence" in Denver, New York and London, as well as other offices.