EXCLUSIVE: Could CBS, which owns pay cable network Showtime, add another premium cable player, Starz, to its portfolio? I hear that CBS CBS Logohas been kicking the tires on acquiring Starz, one of several content companies CBS had expressed interest in. Details are scarce but I hear what had been discussed is a possible stock deal close to the current Starz stock price. It is unclear how far the conversations have progressed.

If a deal comes to fruition, it would mark the first major acquisition move by Leslie Moonves since he was named chairman of CBS last month, replacing Sumner Redstone. He will address the company’s investors for the first time as chairman at the CBS Investors Day tomorrow.

Starz Media logoStarz, in which John Malone’s Liberty owns 49% of the voting shares and controls the company, was put up for sale in September 2014 when the company hired investment bank LionTree Advisors, reportedly seeking $5 billion, a 43% premium over its market value at the time.

2 months
Very little new movies lately on Starz and no foreign films that I loved. No early premiere...
2 months
I just want to know I hope and I pray that whoever picks up starz that they...
Paul928
2 months
Well, if you want to talk about quality premium television (which you clearly do), I'm with you...

Starz was most recently in merger talks with Lionsgatewhich stalled last month, following a week in which both companies’ market values plummeted by more than 20%. Some observers are wondering whether interest from another company could provide a jolt to re-start those talks. Lionsgate owns 14.7% of the voting shares in Starz following a stock swap early last year with Malone, which gave Malone a 3.4% stake in Lionsgate and a seat on its board.

There had been expectation that Moonves would step up CBS’ buying efforts once firmly in charge of the company. While CBS had been rumored to have kicked the tires on a number of companies over the past decade, there had been very few deals, most notably CBS’ acquisition of 50% of TV Guide Channel, now Pop. CBS is partnered on that with Lionsgate, which owns the other 50%.

CBS previously flirted with buying Starz in 2014. In November of that year, Moonves told analysts that Showtime “is doing extremely well” with its original programming while Starz “is based more on movies. It’s a very interesting asset, but we feel content with what we have right now.”

Since then, Moonves has continued to reassure the Street that he likes his current position with CBS and Showtime and, as he told a gathering last week, “not being encumbered by a lot of other things that aren’t as valuable.”

The company told analysts last month that it likely would reinvest in the business, or distribute cash to stock holders either via a dividend or by repurchasing CBS shares.

Still, at the right price many might like the idea of taking on HBO and digital competitors including Netflix, Amazon Prime, and Hulu by consolidating Showtime with Starz. The flagship Starz channel has 24 million subscribers and its Encore suite has 32 million.

Black Sails Season 3Showtime and Starz share an eagerness to load up on original shows. Starz’s original series lineup include Outlander, Black Sails, Ash vs. Evil Dead and Survivor’s Remorse. The network’s movie distribution deal with Disney just expired, leaving it with Sony.

It’s unclear how CBS shareholders would respond to a possible deal with Starz. Shares in the Tiffany Network lost 12.4% of their value over the last 12 months as Wall Street began to fear that digital rivals might lure advertisers and eyeballs from traditional TV.

CBS is preparing for a possible financial windfall this year. The company expects a revenue boost from local sales of political ads, as well as a jolt of cash from the FCC’s auction of local TV station airwave spectrum.

David Lieberman contributed to this report.