Lionsgate has received shareholder approval to separate its studio and Starz businesses, creating two independent publicly traded companies.
The approval paves the way for Lionsgate to split its entertainment assets into two distinct entities: Lionsgate Studios, which will oversee the film and television production operations, and Starz, which will continue as a premium subscription platform. Lionsgate Studios will encompass the Motion Picture Group, Television Studios, and the company’s significant content library, including over 20,000 titles. Starz will continue to operate as a subscription-based service, both for its traditional cable offerings and its streaming platform.
The move reflects the evolving media landscape, where the company aims to better compete in an industry dominated by streaming services, digital platforms, and changing consumer viewing habits, and is a direct response to the growing shift from traditional cable TV to streaming services, which have rapidly gained popularity among consumers.
The split allows each new entity to focus on its unique market segment: Lionsgate Studios will prioritize content creation, while Starz can focus on distribution and subscription growth.
A Financial and Operational Shift
From a financial perspective, the restructuring involves a significant realignment of resources.
Lionsgate Studios will operate with an estimated enterprise value of $4.6 billion, with the company securing up to $800 million in a revolving credit facility and $300 million in term loans to support its business operations. Starz will similarly be financed to support its operations and growth initiatives.
The aim is to provide each entity with the financial flexibility to capitalize on opportunities in their respective industries.
In an official statement, Lionsgate CEO Jon Feltheimer expressed confidence in the move: “This strategic transformation will better enable each business to execute its own distinct strategy in a rapidly evolving media environment.”
The decision reflects broader trends across the entertainment industry, where companies are restructuring to better meet the demands of a streaming-centric world. The Lionsgate-Starz restructuring offers several key takeaways that highlight the ongoing transformation of the media sector:
Shifting Focus to Streaming: The move signals a further pivot to digital platforms. With consumer viewing habits increasingly favoring on-demand streaming services over traditional cable and broadcast, executives will need to reassess their content delivery strategies to stay relevant in the market.
Operational Efficiency: By creating two distinct, focused entities, Lionsgate can pursue operational efficiencies tailored to each business model. This separation presents an opportunity for broadcast and cable TV executives to explore similar restructuring or strategic shifts within their own companies, ensuring they remain agile and competitive.
Content Strategy: Lionsgate Studios’ vast content library gives it a substantial edge in the entertainment landscape. Broadcast and cable TV executives will need to consider how they can leverage content—whether through acquisitions, partnerships, or expanding their own libraries—to ensure their platforms can compete with the growing number of streaming services that have access to both exclusive and catalog content.
Financial Flexibility: As Lionsgate separates its operations, both companies will have the ability to independently manage their financial resources. This approach could provide greater flexibility in pursuing growth opportunities or investments that are tailored to each business. Cable and broadcast TV executives might want to consider similar strategies in managing the financial resources of their own companies in the face of increased competition from streaming platforms.
The separation of Lionsgate Studios and Starz comes at a time when many companies in the industry are reevaluating their strategies. Comcast’s recent move to spin off NBC Universal’s cable networks is another example of a company adapting to the changing media environment. As traditional broadcast and cable TV models face increasing pressure from streaming services, it is clear that flexibility, operational efficiency, and content-driven strategies are more important than ever.
