Lions Gate sets fall 2023 timeline for separation of studio, Starz

Lions Gate Entertainment Corp. Vice Chairman Michael Burns said the company is targeting fall 2023 to complete the separation of its studio business from its premium network and streaming unit.

Speaking at the RBC Capital Markets media conference on Nov. 15, Burns said the company anticipates filing a Form 10 with the SEC in March 2023. It then hopes to complete the separation of its studio and Starz businesses by the close of its fiscal second quarter 2024, which ends Sept. 30, 2023.

The executive said the company is undervalued, and it is difficult when operating two distinct businesses to put a "blended multiple on that."

Lions Gate hopes that after the separation, shareholders and Wall Street will better understand the value of both businesses.

"A separation is the cleanest way to do that," Burns said.

In fall 2021, Lions Gate began exploring strategic options that included possibly spinning off Starz. The company shifted gears earlier this fall as investor sentiment favored the studio spin.

Starz CEO Jeff Hirsch said during the Nov. 15 session that the programmer would have optionality through the separation, allowing it "to get bigger or become part of something bigger."

Hirsch expects one of those things will occur. He believes Starz can continue to be successful at its current size but acknowledged that "it's a tough environment out there."

At the close of the quarter ended Sept. 30, the company counted 37.8 million global subscribers, including STARZPLAY Arabia. Lions Gate finished the period with 27.3 million global streaming customers under the Lionsgate+ and Starz banners.

Those totals include 21.0 million Starz subscribers in the U.S. — 8.7 million on the linear side and 12.3 million streaming subscribers.

To hasten its push to profitability, the company is exiting streaming in seven territories. Previously operated under the STARZPLAY banner, Lionsgate+ will no longer operate in Japan, France, Germany, Italy, Spain, the Nordics and Benelux — Belgium, the Netherlands and Luxembourg.