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Home / Business / Lionsgate shares plunged to seven years low on Starz car scare – deadline

Lionsgate shares plunged to seven years low on Starz car scare – deadline



Shares in Lionsgate fell 5% Friday, closing at $ 9.03, following a week of investor anxiety over Starz's distribution future. The stock has not been so low since late 2011.

One of the culprits was a report in The Information which suggested that Comcast, the # 1 US cable operator, was prepared to drop Starz and Starz Encore after their contract expires at the end of the year. Such a move would reduce the penetration of the premium network by about a third and take top draws such as Power and Outlander outside the linear airwaves.

Sources familiar with the relationship between companies say to Deadline that it is too early to say that Comcast would exercise the nuclear alternative. Often when major carriage renewals come up, there is saber-rattling and maneuvering from both sides, so it's quite possible that this is more of the same.

AT&T and Lionsgate's Starz Strike New Multi-Year Car Deal Deal [19659006] Nevertheless, it is the aggressive efforts of programmers to develop services directly to the consumer that undoubtedly place a strain on the traditional bundle. In particular, Starz has been on a growth curve of late, reporting 400,000 new streaming subscribers in the quarter ending June, bringing it to 4.1 million. Under a long and costly influence with Altice USA in early 2018, Altice went so far as to recommend that customers use the Starz OTT service while the dispute was resolved.

Since that dust up, Lionsgate has managed to package large distribution agreements without interruption. The company re-upped with Dish earlier this year and announced a new transport pact with AT&T on Friday morning.

The much bigger question revolving around Lionsgate is about M&A, including whether Starz will stay on the board much longer. This spring, talks were held between the company and CBS about a potential acquisition, but they collapsed over price and CBS was drawn into the long-awaited merger with Viacom. Lionsgate bought Starz in 2016 for $ 4.4 billion in cash and shares.

Reps for Lionsgate and Comcast had no official comment when contacted by Deadline.


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