Lionsgate, CBS linked with Starz takeover

Starz drama Outlander

US reports are linking CBS Corp. and Lionsgate Entertainment to a US$5 billion (€4 billion) takeover of Starz.

A deal with CBS would mean the US premium pay TV channel would sit alongside rival premium channel Showtime, while Lionsgate is a co-owner in Epix along with Viacom-owned Paramount and MGM.

Discussions are at an early stage, The New York Post reported, and could include options such as a “strategic alignment”, or an asset swap if a deal does not materialise.

21^st Century Fox had previously been linked to meeting with Starz executives, but this was considered nothing more than a courtesy meeting, The Post reported.

The paper added the investments incontent from OTT services such as Hulu, Netflix and Amazon may dampen interest in the business, as it was no longer necessary to buy into cable to gain premium programming assets.

Starz has been understood to be considering a sale for some time. As a major investor in original programming with  56.2 million subscribers across its flagship Starz channel and sister net Encore, the business is one of the only non-vertically aligned TV companies in the US at the moment.

Starz was previously part of John Malone’s Liberty Media, but was spun out last year. Its share price was up 1% at US at US$32.20 on Friday, with a market capitalisation of US$3.32 billion. Malone owns 49% of Starz.