Kenneth Li and Arjun Panchadar of Reuters had the news:
The counter offer was made by the film studio behind the Hunger Games movies after CBS made an informal $5 billion bid for the cable network, the sources said.
CBS’s informal offer was made by Joseph Ianniello, the interim chief executive officer of CBS, about six weeks ago and Lions Gate Entertainment sought a higher valuation, the sources said.
Both companies declined to comment.
The approach underscores the scope of CBS’s ambitions to compete more aggressively in a world in which it is squeezed by deep-pocketed tech companies on one side and rapidly consolidating peers on the other.
Cynthia Littleton of Variety reported that Starz is attractive because it’s a stable business:
It’s no secret that the prospect of CBS reuniting with Viacom remains strong, given the stated preference of controlling CBS and Viacom shareholder Shari Redstone. The news of CBS’ hunt for Starz suggests that the CBS board of directors is actively looking at more than Viacom for M&A and strategic options.
CBS expressed its interest in Starz back in 2015 and 2016 when it was on the block. Lionsgate was long seen as the most likely buyer for Starz given the two companies’ common links to investor John Malone. In the years since, the dawn of the skinny bundle era has validated CBS’ strategy of focusing on fewer powerhouse channels, compared to Viacom’s raft of nearly two dozen basic cablers.
But Starz is a purely subscription business, something that appeals to CBS as it is less vulnerable to cyclical swings. The collection of 17 Starz- and Encore-branded channels has seen its subscriber base grow to about 25.1 million in the U.S., per Lionsgate’s most recent disclosure, in the past year, thanks largely to the company’s push in launching its standalone streaming app. Lionsgate has also been investing in a global rollout of Starz as a streaming option — something CBS is in the midst of ramping up for its CBS All Access service and Showtime.
Etan Vlessing of The Hollywood Reporter reported that Starz recently lost an executive:
Lionsgate in 2016 acquired Starz for $4.4 billion in cash and stock to create what the studio has called a global content powerhouse.
At the time, Lionsgate in a regulatory filing revealed another unnamed company (widely considered to have been CBS) made a rival bid for Starz, only to be turned down by billionaire investor John Malone, who at the time was a major shareholder in both Lionsgate and Starz.
Chris Albrecht recently left Starz over an apparent reluctance to cede precious few hours of original programming to Lionsgate TV originals. That left Hirsch, COO of the premium cable channel, to oversee Starz and pursue a content acquisition strategy more in line with the wider strategy at Lionsgate as Starz is brought into the studio fold.
That has the development and production pipelines from Lionsgate TV and Starz begin to merge as their respective operations are combined. Besides Power headed to a sixth and final season, Starz’s scripted roster includes Outlander, Vida, Sweetbitter, The Rook, The Spanish Princess, Now Apocalypse and American Gods, among others.
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