Lionsgate is working towards separting the company’s studio division from its pay TV and streaming divisions. The company bought Starz for $4.4 billion in 2016 and is already are parting ways as it deals with the growth of Cord Cutting. Now Lionsgate has started the process of breaking Starz off into its own company by using a special purpose acquisition company that focuses on taking companies public, according to a report from Deadline.
Back in July, Lionsgate announced the studio business will be rebranded as StarzPlay and rename the streaming service Starz as Lionsgate+ in 35 countries back in September 2023. Starz will remain as is in the U.S. and Canada, as will Starzplay in Arabia and Asia’s Lionsgate Play.
Now the cable network Starz will become its own company, freeing Lionsgate Studios from the network as it struggles in the world of cord cutting.
The companies will run as separate entities yet still “align in strategies at the end of the current sales process,” as reported by The Hollywood Reporter. Liongate filed a Form 10 registration statement at the U.S. Securities and Exchange Commission filled over the summer.
This form restructures the divisions into separate corporations, somewhat un-merging the companies into a separate studio and media network brands, dubbed New Lionsgate and New Starz.
As for how this will affect shareholders, The Hollywood Reporter states:
“We remain excited by the prospect of separating Lionsgate and Starz into standalone companies with strong financial foundations that will allow each company to pursue its own distinct strategy while offering investors the opportunity to own both a pure-play publicly-traded content studio and a premium subscription platform,” said Jon Feltheimer, CEO of Lionsgate when this move was first announced back in July 2023.
This move would make Lionsgate Studios a standalone publicly traded company with roughly $350 million of gross proceeds.
This deal is subject to regulatory approval and approval from the shareholders.