Starz CEO Addresses Sale Chatter
Chris Albrecht also says HBO and CBS aren't really looking to go direct-to-consumer and says networks were "short-sighted" to sell shows to Netflix
Starz CEO Chris Albrecht on Tuesday addressed recent reports that the company was looking to sell but has failed to sell itself to big industry players.
Speaking at the 42nd annual UBS Global Media and Communications Conference in New York, he called the the reports "rumors and speculation," adding: "I have said from the very beginning that selling your company is not a strategy."
Albrecht also told the conference: "It is a very interesting experience to be the CEO of a company and read something and think, 'I didn’t know that.' " He added: "I wake up one day reading everyone wants to buy Starz, and the next day I wake to find out nobody wants to buy Starz."
There has been much speculation that Starz has been looking to sell itself to a bigger company or find a strategic partner. Recent reports said Starz had talks with CBS Corp. and others about a possible acquisition of the premium TV company.
Indirectly addressing whether he talks to other industry players about possible deals or partnerships, Albrecht said: "There are only about 10 of us left in the media business." He added: "We travel in a pack, and we are always talking to each other."
The Starz CEO also said the company's largest shareholder, Liberty Media chairman John Malone, continues to be "excited about Starz as a business." Added Albrecht: "His views are aligned with the views of the Starz management [team]."
Macquarie Securities analyst Amy Yong recently upgraded Starz's stock to "outperform," similar to other analysts' "buy" rating. "The Black Sheep Deserves a Look" was the title of her report after the stock fell amid reports that CBS and others wouldn't buy the company.
"Our $35 target remains unchanged with potential upside to $42 in the event of M&A," Yong wrote. "Bloomberg disclosed that AMC Networks, CBS, 21st Century Fox, and Lionsgate are lukewarm parties, but the pay TV eco-system has broadened to include international and digital companies."
Albrecht also called Starz's Netflix deal from years ago a "terrible" deal and said he sees Netflix as an "alternative product" rather than a competitor. But he also said it was "really short-sighted" for networks to license their popular content to the streaming service, arguing that Netflix without hit shows wouldn't have anything to attract consumers. The former HBO boss ended the Netflix-Starz deal after he took the helm at Starz several years ago.
He also addressed HBO's plan to launch a standalone broadband service. "I would bet a lot of money they never do it," he said when asked if the service would truly go directly to consumer, indicating that he expected the company would work with pay TV operators to provide the service on their broadband service instead. After his session, he told reporters that offering a premium service directly to consumers without any role for pay TV operators would be "insane."
Discussing consumers' consumption habits, Albrecht said people watch movies on premium TV channels but buy them for the originals. "Movies give you tonnage," he said. He predicted a strong year for Starz, given its slate of originals.