Starz and Lionsgate Complete the Separation

Starz and Lionsgate completed their separation on 6 May 2025, closing a transaction first announced in December 2022 and repeatedly restructured across 2023 and 2024. Starz Entertainment Corp. now trades on Nasdaq under STRZ. Lions Gate Studios Corp. trades on the NYSE under LION. The previous combined entity, Lions Gate Entertainment Corp., had been dual-listed on the NYSE under LGF.A and LGF.B and has been wound up at completion.

The final transaction structure differs in specific ways from the original 2022 outline. The end-state entities are now sized and capitalised in ways that will determine how each operates across the rest of the decade.

What the separation splits

Under the final transaction, Starz Entertainment holds the Starz premium cable network, the Starzplay Arabia joint venture interest, and international Starzplay streaming distribution. Lions Gate Studios holds the Lionsgate film studio, Lionsgate Television, Pantaya (spun in via an earlier transaction), and the combined library that Lionsgate built through its Summit Entertainment acquisition in 2012 and subsequent additions.

Jeffrey Hirsch continues as CEO of Starz Entertainment. Jon Feltheimer continues as CEO of Lions Gate Studios. Both companies have been capitalised with transitional debt reflecting the specific balance-sheet positions the combined entity carried at separation.

Why it took three years

The original December 2022 announcement contemplated a simpler spin structure with a cleaner split of debt and cash flows. The subsequent three years involved repeated restructurings driven by the 2023 writers’ and actors’ strikes, the continued decline of the US premium-cable subscriber base, the broader streaming-economics reset of 2023 and 2024, and a failed approach from LG Partners that would have taken the combined entity private before separation.

Each restructuring pushed the close back. The May 2025 completion is the specific final version of a transaction that had been close to completion at multiple earlier points.

The Starz numbers

Starz closed its final fiscal year (to 31 March 2025) with approximately 19.2 million total subscribers across the US Starz service (linear and OTT combined), plus roughly 5 million Starzplay Arabia subscribers held through the joint venture. The US base has been in slow decline across the last three years, tracking the broader premium-cable erosion. The OTT subscriber share within the US base has been growing, and the linear share declining, at a rate consistent with the industry pattern.

The network’s programming spend will need to be recalibrated under independent-entity discipline. The 2025 and 2026 slates include renewals of most of the Power universe programming alongside the established Outlander, BMF, and Mary & George drops.

The Lionsgate position

Lions Gate Studios starts its independent life with a library of roughly 20,000 titles, the fourth-largest independent film library in the US market. The 2025 theatrical slate includes Ballerina (the John Wick spin-off), Saw XI, and the continuing Hunger Games prequel activity.

The specific strategic question the independent studio now faces is capital allocation. The library is a cash-generative asset. The theatrical slate requires ongoing P&A and production investment. As an independent entity, the studio’s capital structure will be directly visible to investors in a way the combined entity’s was not.

What the market has priced in

STRZ has traded at a multiple consistent with the broader premium-cable peer group (roughly six to seven times forward EBITDA). LION has traded at a multiple consistent with independent-studio peers (roughly eight to nine times forward EBITDA). The aggregate market capitalisation of the two companies is below what the combined entity traded at in late 2022.

The acquisition question

Both companies are now more clearly defined acquisition candidates than the combined entity was. Starz is the kind of premium-cable asset that a larger streaming platform could acquire; Paramount/Starz speculation has been intermittent across the last three years and will now be easier to price. Lions Gate Studios is the kind of library-plus-production asset that a larger studio or private-equity entity could acquire.

Neither transaction is imminent. The twelve to eighteen months post-separation is the typical window for strategic alternatives to surface after a spin-off of this scale.

What to watch

Three things. First, Starz’s programming-spend trajectory and whether the subscriber base stabilises. Second, the 2025 theatrical performance, particularly on Ballerina and Saw XI. Third, whether either entity becomes an acquisition target across 2026 and 2027. The specific commercial results across the next eighteen months will be the verdict on whether the separation produced the value the transaction was designed to deliver.