Lionsgate Execs Talk Up Starz Deal And Plan To Bring ‘Divergent’ To TV

Associated Press

Lionsgate used most of its quarterly earnings call with analysts to try and drum up enthusiasm for its $4.4 billion Starz deal — which has been met with mixed reviews on Wall Street.

But they also spelled out their plan to build a TV series from the Divergent movies.

Television Group Chairman Kevin Beggs says that “the performance of the last segment of the theatrical didn’t really create a situation where [Lionsgate] could commit the production resources necessary to really make the production we needed.”

His unit was then invited in and “got excited about the possibility of what the series could look like — resolving the novel in a season across 10 to 13 episodes and then expanding from there into multiple seasons.”

Next week Lionsgate will begin to present about 12 interested networks with the opportunity to pick up the series.

“This is an example of what we call the virtuous cycle of content bouncing back and forth from TV and film,” Beggs says. “The economic upside on a long-term series franchise is very substantial.”

Still, most analysts had Starz in their eyes. CEO Jon Feltheimer says it will be “the largest and most transformative acquisition in our history…We’re even more excited about the deal today than when we first announced it.”

The combined company will spend about $1 billion a year on new TV series, and $1.8 billion when you include movies. They’ll also spend $700 million a year to market the content globally.

Execs reject the theory that the company was pressured by Liberty Media’s John Malone — a major Lionsgate shareholder and director — to buy Starz, which he controls.

“John Malone thought these two assets would fit nicely together, he’s been saying that for a long time,” Vice Chairman Michael Burns says. “But make no mistake: We wanted the Starz deal.”

The studio says it expects to see more than $200 million in annual cash savings.

About $150 million a year will come “immediately” from the lower taxes Starz might pay once it becomes part of Lionsgate. It’s incorporated in Canada, which has a lower corporate rate than the U.S. (Officials here are changing many IRS rules to deter such tax inversions.)

The company also expects to save more than $50 million a year by eliminating overlaps with Starz in areas including production, manufacturing, and marketing.

“We’re actually moving Starz into our building,” Feltheimer says. “We are going to put the cultures together in an effective way.” Starz chief Chris Albrecht will be “five yards away from me…We’re going to be speaking 10 times a day.”

This article was printed from