The studio is considering separating the business from Starz, which it acquired in 2016, so it can be valued separately.
Lionsgate’s streaming strategy will take a sharp turn at the end of the year, when Lionsgate+ leaves Germany, Belgium, Spain, France, the Netherlands, Japan, Italy, Luxembourg and the Nordic countries, seeking to focus on Latin America, Canada and the United Kingdom, seeking to “stabilize” the Starz business, given the possibility of a future sale.
The news, which emerged during a dialogue between studio executives and investors, did not elaborate on what this will mean for content produced in the territories that will be left behind, both content already produced and projects in production.
As reported, the number of Starz subscribers grew by one million subscribers during the second quarter of the year, reaching 27.3 million, presenting a growth of 52% in the annual comparison.
The investment made in Starz/Lionsgate+ over the last few years has left the company dealing with significant amounts: “These charges are an acknowledgement of current market conditions and the challenges in our environment. But they also represent an opportunity to stabilize our Starz business, reset expectations and drive higher adjusted OIBDA as we move forward”, Lionsgate CEO Jon Feltheimer told investors.
In a similar vein, Jimmy Barge, the company’s chief financial officer, noted that focusing on the aforementioned territories “will provide our international business with a clear path to profitability.” The expectation is that Starz will break even by the end of 2024 or sooner.
Lionsgate paid $4,400 for Starz in 2016 and its goal is to get between 50 and 60 million subscribers by 2025.
For now, the streaming business is affecting the studio’s accounts, so Lionsgate is considering separating it from the structure to be able to evaluate it independently, although this will have an impact in the form of taxes.
