Roku and Apollo Global Management have teamed up to bid for a minority stake in Starz, Deadline has confirmed.
A person familiar with the situation said a first round of bids was several weeks ago and interested parties were just starting to get access to Starz data. Others are in the mix as well, with interested parties said to include DirecTV, and the process is going rather slowly.
Lionsgate announced last fall it was exploring strategic options for the cable network and streamer, effectively putting it on the block. The company run by Jon Feltheimer acquired Starz for $4.4 billion in 2016. But the combined company now has a market cap of just over $3 billion. Selling all or a part of the asset could unlock value.
That’s been especially true given the big multiples paid for content, including Amazon’s $8.45 billion acquisition of MGM.
Roku launched its first original programming slate last year and just presented a raft of content earlier today at the NewFronts. Its free, ad-supported Roku Channel, which has reach to 80 million homes, swung a deal last month with Lionsgate for an exclusive streaming window for Lionsgate films once they end their pay-1 run on Starz. Lionsgate and Roku have also partnered on a number of other initiatives, including last year’s holiday film Zoey’s Extraordinary Christmas, a feature spinoff of the Lionsgate-produced former NBC series acquired by Roku.
Apollo is a big player in media, recently taking a stake in Dune producer Legendary Entertainment and acquiring Verizon’s media assets as well as TV and radio station owner Cox Media Group.
The Wall Street Journal first reported the bid.
DirecTV’s latest iteration is a venture created early last year by AT&T and private equity giant TPG Capital. Like the revamp of DirecTV, which removed it from the AT&T balance sheet even as the telecom giant retained a 70% ownership stake, the recent spinoff of WarnerMedia from AT&T and merger with Discovery followed a similar path. AT&T owns 69% of Warner Bros Discovery but does not control it. One person familiar with the Starz discussions said a similar scenario under consideration with Starz could enable Lionsgate to hold onto most of it but not have to officially carry its results.
Reps for Lionsgate and Roku declined to comment.
On a call with analysts in February, Lionsgate vice chairman Michael Burns said the company is “working with a terrific team of advisors with complementary strengths and expertise as we continue the process of unlocking shareholder value in our two core businesses” and promised to provide updates “at the appropriate time.”
Starz, home of the Outlander and Power Book series, said in February that its net global streaming subscribers grew 1.7 million for the last three months of the year sequentially to 19.7 million — up 44% year-on-year. It said programming was back on track after Covid-related production delays.
Dade Hayes contributed to this report.
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