Roku Reportedly Eyeing 20% Stake in Starz

Roku has reportedly partnered with Apollo Global Management to submit a bid for a 20% stake in Lionsgate-owned multiplatform digital distributor Starz. Roku, which co-launched the subscription streaming video-on-demand market with Netflix in 2008, has been looking to up its presence as a digital content distributor, in addition to streaming gateway for third-party streaming services.

The Wall Street Journal, citing sources, said Roku and Apollo are looking to act on Lionsgate’s decision to spin-off Starz, which the studio/distributor acquired for $4.4 billion in 2016. Apollo acquired Redbox from Outerwall for $1.6 billion in 2016, before spinning the kiosk vendor off last year to SPAC Seaport Global Acquisition.

Lionsgate, which believes Starz is undervalued, has been busy licensing digital rights to original and catalog content to The Roku Channel and Amazon Freevee, previously partnered with Roku for original movie, Zoey’s Extraordinary Christmas, which Lionsgate produced.

Starz ended 2021 with about 20 million subscribers. Lionsgate in March sold its majority stake in subsidiary Starz Play Arabia for an undisclosed amount. The service has about 2 million subscribers.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Verizon Exiting Media Biz, Selling Dotcom Pioneers Yahoo, AOL to Private Equity Group

 Verizon is leaving the media brands business. The telecom and Apollo Global Management on May 3 announced an agreement for Apollo to acquire a majority stake in Verizon Media for $5 billion. Verizon will retain a 10% stake in the company, which will be known as Yahoo at close of the transaction and continue to be led by CEO Guru Gowrappan.

Verizon Media brands include Yahoo, AOL, Huffpost, TechCrunch, Yahoo Finance and Yahoo Sports, among others. Under the agreement, Verizon will receive $4.25 billion in cash, preferred interests of $750 million and retain a 10% stake in Verizon Media. The transaction is subject to satisfaction of certain closing conditions and expected to close in the second half of 2021.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Apollo Global Management also owns Redbox, which it acquired in 2016 for $1.6 billion.

The corporate carve out will allow Verizon Media to pursue growth areas and stands to benefit its employees, advertisers, publishing partners and nearly 900 million monthly active users worldwide.

“The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem,” Gowrappan said in a statement. “With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long- term success of the company.”

Reed Rayman, private equity partner at Apollo, said the deal will help the company expand “tremendous potential” of Yahoo and its collection of media brands.

“We have enormous respect and admiration for the great work and progress that the entire organization has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo’s growth in its next chapter,” Rayman said.

“Apollo has a long track record of investing in technology and media companies and we look forward to drawing on that experience to help Yahoo continue to thrive,” added David Sambur, senior partner and co-head of private equity at Apollo.

“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous,” said Hans Vestberg, CEO of Verizon. “The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”

Verizon Media reported strong, diversified year-over-year revenue growth the past two quarters, driven by innovative ad offerings, consumer ecommerce, subscriptions, betting and strategic partnerships. Yahoo, one of the best recognized digital media brands in the world and the fourth most visited internet property globally, continues to evolve as a key destination for finance and news among Gen Z. This was most recently marked by Yahoo News becoming the fastest growing news organization on TikTok.

Redbox Owner in Talks to Buy AT&T’s DirecTV Business

Apollo Global Management, the investment group that acquired Redbox in 2016 for $1.6 billion, reportedly is in the running to acquire AT&T’s satellite operator DirecTV.

Apollo, along with Churchill Capital Corp. IV, have submitted separate bids around $15 billion for control of the El Segundo, Calif.-based DirecTV, which AT&T acquired in 2015 for $66 billion, including debt, according to The Wall Street Journal. AT&T would still be majority owner while relinquishing operational control of the pay-TV unit. A decision is expected early next year.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The telecom is attempting to reduce its triple-digit billion-dollar debt load after acquiring Time Warner for $85 billion in 2018, which led to the creation of WarnerMedia.

DirecTV, like most pay-TV distributors, is losing video subscribers to less-expensive over-the-top video platforms such as Netflix, Disney+, Hulu and Amazon Prime Video. AT&T is staking much of its future on streaming video through the launch of HBO Max and separately as a major distributor of high-speed Internet.

Speaking Dec. 8 on a virtual investor event, AT&T CEO John Stankey said that he is pleased with the company’s progress in managing costs and corporate structure and overhead and will continue these efforts. He said a focus on corporate efficiency has resulted in lower distribution costs even as volumes continue to improve and that the coronavirus pandemic has further accelerated a move to digital customer engagement that was already underway. Stankey reiterated that AT&T continues to take a deliberate and thorough approach to monetizing non-core strategic assets such as DirecTV.

“We still have opportunities to do some things around rejiggering our portfolio,” Stankey said. “We’ll continue to force ourselves to look at those hard decisions.”