Does MGM+’s new package make Amazon a potential Starz buyer?

Now Amazon MGM+ is playing with ‘Power’. And “Outlander” and “P-Valley” etc.

Starz and Amazon have entered into a “long-term” deal for what the companies call Starz and MGM+ on Prime Video in the US. on Friday. That’s a 20 percent discount compared to subscribing to the two services separately, which would cost $14.99. The financial terms of the deal were not disclosed.

Starz was already available as a Prime Video Channels add-on for $8.99 a month. (The Starz OTT app is also available on Amazon devices like the Fire Stick for the same price.) This arrangement just brings more to the family.

“We are excited to join forces with Amazon to bring Starz together with MGM+ to their millions of customers on Prime Video,” said Alison Hoffman, president of domestic networks for Starz. “Starz is a complementary service to the general entertainment offering, so we are very pleased that bundling has arrived and we believe there will be many more bundled service opportunities in the future.”

Connected

Connected

OK, but exactly how close do you want to “team up with Amazon”, Alison? There have been rumblings about Starz’s potential acquisition of Paramount Global, including one confirmed by IndieWire on Wednesday — but a new leader may have just emerged.

IndieWire asked representatives of Starz, Lionsgate Corporate and Prime Video if there are talks about Amazon potentially buying Starz, as it did MGM a year ago. Starz is certainly for sale and Amazon has the money. The spokespeople all declined to comment on the matter.

Courtesy of Amazon

Starz is home to “Outlander,” the “Power” universe and the returning “Party Down,” among others. MGM+, formerly Epix, presents “The Godfather of Harlem,” “Billy the Kid” and “Belgravia.” But the real MGM+ value is in the film library, which is full of Metro-Goldwyn-Mayer and United Artists classics.

MGM+’s film archive includes the James Bond and ‘Rocky’ franchises, as well as ‘House of Gucci’, ‘Licorice Pizza’, ‘Silence of the Lambs’, ‘Bull Durham’, ‘Platoon’, ‘Robocop’, ‘Mississippi’ Burning’, ‘The Amazing Week’, ‘Barbershop’, ‘The Pink Panther’, ‘In the Heat of the Night’, ‘The Good, the Bad and the Ugly’, ‘Bill and Ted’s Excellent Adventure’ and ‘The Thomas Crown Affair’ .”

MGM, Lionsgate/Starz and Amazon have a lot of intertwined recent histories.

Amazon bought MGM in March 2022 for $8.45 billion. Six months later, Amazon rebranded MGM’s Epix service as MGM+. On the same day, Lionsgate/Starz’s international streaming service STARZPLAY became Lionsgate+, and Lionsgate announced that it was more likely to spin off (probably sell) its studio rather than Starz itself. Spinning off (probably selling) Starz was the parent company’s original plan to “unleash value” in both its studio businesses and media networks.

Wall Street agreed with the switcheroo. According to analysts, not only are Starz and Lionsgate studios worth much more individually than they are together, but the film and TV studio is worth more than 4x Starz. The plan to separate the two by the end of September “remains on track,” Lionsgate CEO Jon Feltheimer said on his company’s earnings call last week.

“The separation gives our two core businesses the opportunity to pursue strategic and financial paths that make sense for each, unlocking greater value by operating as a pure-play entity,” he explained. “We are looking at a number of financial strategies to ensure that both companies have strong balance sheets at the time of the separation.”

Robert Wilson/Starz

The Amazon/MGM purchase is the closest anyone has come across to the true value of a re-split Lionsgate/Starz. Coincidentally, Lionsgate and MGM (and Viacom) owned Epix, now MGM+, until Lionsgate bought Starz in 2017 for $4.4 billion. That’s when Lionsgate sold its 31.2 percent stake in Epix to MGM and Viacom, with MGM buying out Viacom’s stake.

Regardless of what happens after it untangles all of that — and Starz from Lionsgate — one thing is clear: Starz could use the signal boost this current deal brings. Last week, Lionsgate said Starz lost 700,000 subscribers in the last quarter of 2022 (contrary to budget). As of December 31, Starz had 35.1 million subscribers; nearly 25 million of these are from streaming. StarzPlay Arabia gained another 2.1 million subscribers.

Amazon does not report subscriber numbers.

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