Lionsgate Entertainment is inching closer to finalizing the separation of its Starz and Lionsgate Studios businesses, according to a recent filing with the Securities and Exchange Commission (SEC) spotted by Deadline. The company has submitted an amended registration statement incorporating the SEC’s latest comments, paving the way for a shareholder vote on the proposed split.
Timeline for Separation
The SEC is expected to declare the joint proxy effective soon, after which Lionsgate will set a date for a special shareholder meeting within 30 days. If shareholders approve the separation, the two businesses will operate as independent publicly traded companies.
Rationale for the Split
The split will allow each entity to focus on its core strengths and pursue growth opportunities independently, including potential mergers and acquisitions.
This move also joins a growing trend of studios who want to distance themselves from their cable TV networks.
Starz: A Standalone Streaming Powerhouse
Starz, which will trade under the stock symbol STRZ, will be led by current CEO Jeff Hirsch. The company operates a premium streaming platform and pay TV channel, offering a diverse library of original series, movies, and documentaries. Hirsch has indicated that Starz could become an aggregator of other smaller streaming platforms, further expanding its reach and content offerings.
Lionsgate Studios: A Resurgent Film and Television Studio
Lionsgate Studios, which was spun out into a separate public company last year under the stock symbol LION, comprises the company’s television studio, motion picture group, and film and television libraries. The studio has recently experienced a resurgence with successful films like “Best Christmas Pageant Ever,” “Den of Thieves 2,” and “Flight Risk.”
Industry Trend: Spinoffs and Standalone Businesses
Lionsgate’s move to separate its businesses reflects a broader trend in the media and entertainment industry. Comcast is also planning to spin off most of NBCUniversal’s linear channels into a standalone company, and Warner Bros. Discovery appears to be positioning itself for a similar move.
These spinoffs reflect the challenges faced by traditional media companies in the evolving entertainment landscape. By separating their businesses, companies can create more agile and focused entities better equipped to compete in the streaming era.
Looking Ahead
The separation of Starz and Lionsgate Studios marks a significant milestone for Lionsgate Entertainment. The move will create two independent companies with distinct strategies and growth trajectories.
The success of both entities will depend on their ability to navigate the challenges and capitalize on the opportunities of the rapidly changing media landscape. As the entertainment industry continues to evolve, Lionsgate’s strategic decisions will play a crucial role in shaping its future and that of its newly independent businesses.
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