Thursday, June 30, 2016

Starz Deal Demonstrates The Value Of Content

Lionsgate believes that content and distribution are intertwined and so have announced their deal to buy cable pay provider Starz for $4.4 billion.  According to Multichannel, " Although anticipated for months, the combination will give Starz the production heft it has craved as well as a vast content library – the merged entity will have 16,000 movie and TV titles – while Lionsgate gets a distribution arm in the Starz and Encore premium channels. It also paves the way for a broad range of new content partnerships and accelerates the growth of Lionsgate and Starz’s own OTT services."  A win-win for both companies and one that leverages the strengths of each other.   The deal should be approved by end of year.  

This deal comes as a result of the work done by John Malone, CEO of Liberty Media , who invested in Starz, spun it off into a separate company and ultimately put Lionsgate together with Starz to finalize a deal.  Not surprising, Malone's Discovery Channel also has a piece of Lionsgate making this deal more of a family affair for Liberty Media.  Given John Malone's MIdas Touch with content and distribution, the newly combined entity will do quite well.