Lionsgate CEO expects to spin off Starz this summer

Lionsgate expects to have a resolution for Starz, which will either be spun off or sold outright, by the end of the summer, CEO Jon Feltheimer said Thursday during the studio's quarterly earnings call.

Why it matters: The fate of Starz has been up in the air ever since last fall, when Lionsgate first said it was looking to offload the premium cable network/streaming service.

• Feltheimer added that any potential deal could close by the first quarter of 2023.

Details: Feltheimer was light on many specifics, though he did hint that the current plan is to spin off Starz into its own company, with Lionsgate retaining a portion of it.

• "Our sense now is we're not selling all of it," he said during the call.
• As Axios previously reported, Roku is teaming up with Apollo Global Management on a bid for a minority stake in the premium cable network/streaming service. Other known suitors include DirecTV and Vivendi's Canal+.

Yes, and: Feltheimer added he's not worried the current stock market free-fall will affect their plans. Lionsgate's stock price has sunk nearly 40% over the first half of 2022. "We're in an incredibly disruptive environment right now. But based on the conversations we're having, we think that's the appropriate time frame," he said.

Catch up quick: Lionsgate acquired Starz for $4.4 billion in 2016, but it has been a drag on the studio's balance sheet.

• The combined company is currently valued at around $2.25 billion, about half of what it paid for Starz.
• The debt from the acquisition has weighed down the company's stock. Executives think the two would be better valued as separate entities.
• "The main impetus for the separation is that we don't feel that the Street is giving us the value for the sum of the parts," Feltheimer said. "[I] feel like with the companies separated, they can both concentrate on their core businesses, and my sense is they will also see some opportunities, perhaps some strategic opportunities that they might not see with the companies that are combined."