CEO Jeffrey Hirsch: Starz Well-Positioned for Standalone Operations

When Lionsgate in early November disclosed it would entertain spinning off Starz (with 18 million SVOD subscribers) as a standalone publicly held company, the studio/distributor was looking to jumpstart investor interest in what it considered to be an undervalued asset.

Speaking Dec. 8 at the virtual UBS Technology, Media and Telecom conference, Starz CEO Jeffrey Hirsch said the decision underlined Lionsgate senior management’s desire to align with shareholders and “do something structural” to the business.

Hirsch, together with vice chairman Michael Burns, has been out front on investor forums touting the Starz brand and its focus on creating content targeting black and female viewers.

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Starz, which Lionsgate acquired in 2016 for $4.4 billion, has transitioned the brand from pay-TV distributor to over-the-top video, including StarzPlay Arabia, a non-consolidated equity method investee. StarzPlay International subs grew 97% year-over-year to 7.5 million across 60 countries.

“That’s exciting for everybody at the company because obviously if you look at the stock price and the valuation, we weren’t getting credit for the tremendous work we’re doing at Starz but also what we’re doing on the studio side,” Hirsch said.

While providing no updates on any possible asset sale, Hirsch said Starz is prepared to operate as a standalone company when that time comes.

“We have a CFO, we have a head of HR, we have a separate marketing group,” he said. “So, all of the personnel stuff that would have to happen to actually break the company apart is already in place. I think that’s something pretty easy to do.”

As a separate company, Starz would remain significantly linked with Lionsgate. Ten of the platform’s current 12 original series are produced by Lionsgate.

“We talk to them almost daily about all aspects of the business,” Hirsch said. “We’ve done a couple of early renewals. And we really are tied-at-the-hip partners.”

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