Lionsgate has offered more information about its plans to separate its production company from its multiplex movie network and streaming service Starz.
In a filing with the U.S. Securities and Exchange commission this week, Lionsgate says its movie and television studio operation will be spun off into a separate company, while Starz will be retained by its existing operation.
The spun-off production arm will become a publicly traded company, Lionsgate said. The production firm will take the Lionsgate name, while the existing Lionsgate will be rebranded to Starz. The separation is expected to happen by the end of 2023.
“We remain excited by the prospect of separating Lionsgate and Starz into standalone companies with strong financial foundations that will allow each company to pursue its own distinct strategy while offering investors the opportunity to own both a pure-play publicly-traded content studio and a premium subscription platform,” Jon Feltheimer, Lionsgate’s CEO, said in a statement.
Executives have touted the health of both companies, although with different priorities. The production arm continues to create content that is licensed to third party services, including Netflix, AMC Networks, Paramount Global and Apple, while Starz has focused on building out its streaming television service while maintaining its multiplex pay television network.
In May, Lionsgate revealed Starz added 700,000 subscribers during the first three months of the year, fueled in part by new seasons of hit original series like “Outlander” and shows in the “Power” franchise. Executives affirmed their intention to raise the price of Starz by $1, citing licensing and marketing costs.
“We haven’t changed the rate since we launched into the digital side of the world seven years ago, and in that time, some of our peers have done one — and, some of them, two — rate increases,” Starz CEO Jeffrey Hirsch said on a conference call.
Meanwhile, Lionsgate continues to press forward with its original content development and licensing businesses, which includes a newly-retooled arrangement with film director Quentin Tarantino to distribute remastered versions of his classic films.