Lionsgate and Starz will be officially parted this year, in a $4.6B deal that will see the studio and its 20,000-strong library of titles separate from Starz entirely. Blake & Wang P.A. entertainment lawyer, Brandon Blake, shares the news.
Brandon Blake
Lionsgate to Become a SPAC
We’ve known a move was coming for a while now, but it is official. Lionsgate will spin off its studio business into what is known as a Special Purpose Acquisition Company (SPAC), allowing the creation of a fully separate publicly traded company. This will leave their existing library, together with Lionsgate’s TV production and Motion Picture Group divisions, to be combined by Screaming Eagle Acquisition Corp. It will trade as Lionsgate Studios Corp., and remain a public entity.
The Value of a Library
Under this new structuring, the worth of their weighty library has been pinned at $5.2B- more than the whole new entity is valued! In turn, it is theorized that Starz will be better positioned to realize its full potential. In doing so, Lionsgate retains an attractive structure to its capital and control over the studio business, too.
The result will be one of the largest indie content platforms in the world. Paired with their very recent acquisition of the eOne company and its platform, and their ongoing interest in 3 Arts entertainment, the deal should allow for a thriving stand-alone content company with strong financials. It’s hard to see where that could go wrong. Screaming Eagle will take over around 12.7% direct ownership, with 87.3% of existing Lionsgate Studios shares remaining under Lionsgate’s control.
The new entity will operate completely separately from Starz, although the parent company retains control of the streaming platform. The SPAC transaction is expected to close by the spring of this year, with further details to be revealed in time.
