The long-pending separation of the Lionsgate studio and Starz businesses will take a little longer, the company said Wednesday. A new acquisition and other factors have pushed the split from September to early 2024.
“With the impact of the eOne acquisition on regulatory approvals, uncertainties surrounding the strike and our efforts to create the most efficient capital structure within a disruptive marketplace, we anticipate that the separation will now take place in the first quarter of calendar 2024,” Lionsgate CEO Jon Feltheimer, said on the company’s fiscal first quarter earnings call Wednesday.
The mini-major recently finalized plans to purchase Entertainment One from Hasbro for $500 million, a lot less than the $3.9 billion Hasbro paid for the studio in 2019. The acquisition gives Lionsgate another batch of titles and IP to add to its already large library.
“The eOne deal allows us to do what we do best: adding 6500 titles to one of the largest and most valuable libraries in the world, growing our portfolio of brands with properties like ‘The Rookie,’ ‘Yellowjackets,’ ‘Naked’ & Afraid’ and film development rights to ‘Monopoly,’ continuing to strengthen our scripted & unscripted television business and scaling our operations in Canada and the U.K.,” Feltheimer said.
On a call discussing the company’s earnings, an analyst asked why the eOne buy couldn’t wait until after the Lionsgate/Starz split. Lionsgate CFO Jimmy Barge cited timing as the principal factor, as well as “the attractive multiple” implied in the price.
“This is when it was for sale,” Barge said. “We felt that this was something we really didn’t want to miss.”
In prepared remarks, Feltheimer said that the company remained “committed to the separation of Lionsgate and Starz.”
