Lions Gate Entertainment Corp. announced Wednesday that it intends to spin off its Lionsgate studio business amid a larger overseas rebrand of its Starz streaming service. Currently known as Starzplay outside the U.S., the streaming platform will rebrand to Lionsgate+ beginning Sept. 29.
“Despite the volatile market environment, Lions Gate Entertainment Corp. remains on a path to separating our Starz and studio businesses,” the Santa Monica-headquarterd entertainment company said in a filing with the Securities and Exchange Commission. “As negotiations progress, we have increased our focus on the possibility of spinning our studio business, creating a number of financial and strategic benefits.”
“In that regard, we are continuing productive negotiations with prospective strategic and financial partners on both sides of our business,” the filing continued. No prospective partners were named in the filing.
Looking ahead, Lionsgate’s studio and streaming services are expected to operate separately but remain strategically aligned, the goal being to create two singular companies for investors to separately value assets of Starz and those of the film and TV production studio.
Spinning off the production studio Lionsgate and keeping the Starz streaming operation is counter to what many expected as Lions Gate Entertainment Corp.’s next move. It had long been speculated that to reduce debt, the parent company would spin off the streaming service, which it acquired in 2016, and remain in the content-making business with its film and TV studio.
But Lionsgate also boasts a library of 17,000 titles, from the “Hunger Games” film franchise to “Mad Men,” and could be an attractive acquisition target for a streaming service in the wake of Amazon’s $8.5 billion acquisition of MGM earlier this year.
The overseas rebranding will cover the majority of the company’s 63 countries, with Lionsgate+ available in over 35 markets, including the U.K. and Canada. Starzplay Arabia will remain in place, along with Lionsgate Play in South and Southeast Asia.
Lionsgate President and CEO of Starz Jeffrey Hirsch also addressed the rebrand of Starzplay to Lionsgate+ in foreign markets. “Operating under Lionsgate+ internationally brings a distinct and differentiated identity in an increasingly crowded international marketplace and builds on the brand equity in the Lionsgate name that our extensive research has proven is strong around the world,” he said in a statement. “Even with the separation of Starz and the Lionsgate studio business, the Lionsgate brand will continue to be valuable to the ongoing success of our international platform.”
Superna Kalle, president of international networks for Starz, added: “Our commitment to deliver bold, curated stories where we push boundaries and defy expectations remains the same. We have built strong relationships with our viewers and look forward to continue providing them premium storytelling as Lionsgate+.”