Lionsgate Clears Last Hurdle For Studios, Starz Split

The Supreme Court of British Columbia, where Lionsgate is officially headquartered, has approved full separation of the company’s studio business from Starz, the final step required to complete the split that’s been in the works for years.

Shareholders approved the operation last month.

Lionsgate Studio and Starz will separate formally tomorrow and begin trading as standalone public companies on Wednesday for the first time — LION on the NYSE and STRZ on the Nasdaq.

The news hits shortly after President Donald Trump threw Hollywood a curve ball last night, asking for tariffs of 100% on movies made outside the U.S. The stated goal of saving a “dying” film industry
would, in fact, squeeze studios big and small along with independent producers in a global business where a wide range of productions rely on foreign tax incentives to hit their numbers.

The administration has since walked back the president’s Sunday social media post some, clarifying this morning that no decisions have been made yet. Trump insisted he did not want to hurt the entertainment industry and would be meeting with unspecified Hollywood representatives. The sector, which boasts a wide trade surplus with the rest of the world, made it through the first 100 days without a hit.

Lionsgate shares are down 5%.

The company started exploring a separation over three years ago but its was slow going with pandemic fallout, Hollywood strikes and the acquisition of eOne intervening. The process started when Lionsgate Studios — the TV studio, motion picture group and film and television libraries — merged with Screaming Eagle Acquisition Corp., a SPAC (special purpose acquisition company) led by Eli Baker. The transaction set a $4.6-billion enterprise value on Lionsgate Studios.

The idea of splitting up studios, led by Jon Feltheimer, from OTT service and linear network Starz, run by Jeff Hirsch, is to ultimately create more market value for both.