Lionsgate, Starz near long-awaited split

Lionsgate’s long-standing plan to split from cablenet Starz is nearing completion after the US studio’s shareholders approved the move.

The plan to split the studio operations of Lionsgate from the subscription services of Starz had been seen as a way to unlock value, with shareholders believing its stock price belied the company’s true worth.

The deal had first been pencilled in to complete in 2023 but has been beset by delays caused by the pandemic and the Hollywood strikes.

However, Lionsgate shareholders voted in favour of the separation on Wednesday, while also approving board director nominees and compensation for execs.

Lionsgate had previously spun off its Mad Men, Yellowjackets and John Wick production outfit Lionsgate Studios in a merger with a special purpose acquisition company (SPAC) named Screaming Eagle Acquisition Corp, which saw it become a separate entity valued at $4.6bn.

Its assets, which include a library that tops 20,000 titles as well as a TV and film production arm, are controlled by Lionsgate shareholders.

They will retain stakes in both the US studio company – to be known formally as Lionsgate Studios Corp – and the newly formed, standalone, Starz Entertainment Corp.

Lionsgate will trade on the New York Stock Exchange, while Starz will be listed on Nasdaq, with the deal now expected to formally close in early May.

Both companies have been adjusting operations ahead of the proposed split over recent months, with Lionsgate trimming its scripted team in March.

Starz and Lionsgate also extended an output deal earlier this year, meaning the former has pay TV and SVOD rights to the latter’s movie output.

Starz, which operates cable networks and a streamer, was acquired for $4.4bn in 2016 and will be led by its existing chief exec, Jeffrey Hirsch, following the split.

Lionsgate’s Jon Feltheimer is to remain as its chief exec.