The relationship between Comcast and Starz has long been on the verge of division. Last year, the two companies struggled to secure a fair market agreement that would allow Comcast to continue offering Starz programming to customers as part of its cable packages. On February 11, this separation will be official after Comcast announced a new program agreement with Starz. Comcast`s contract with Starz was scheduled to expire on December 31. Discussions about premium service pricing, often superior to what the channel charges for its standalone streaming app, appear to have stalled earlier. Comcast began informing customers in October that it would be releasing Starz channels in early December in favor of an expanded agreement with another premium service, Epix. When some local governments raised objections, Comcast agreed to keep the channels on the program until at least December 31. Starz is in the middle of the final season of the power series, which returns for the final five episodes on January 5 and is expected to stay on Xfinity for the final. “We look forward to continuing our long-standing partnership with Comcast to provide our customers with excellent content and value,” said Jeff Hirsch, President and CEO of Starz.
“Our ongoing relationship with Comcast reflects our ability to open opportunities in all of our businesses for the benefit of our subscribers.” Doug Creutz of Cowen and Co. said he predicted that a horse-drawn carriage deal would be reached. In a statement to clients, Mr. Sichutz shared several positive comments, including the expectation of a return of a “M-A premium” on Lionsgate`s shares, as “potential candidates for the AM now make the company`s cash flow visible.” In early 2019, Lionsgate shares fell to a low of about $7 over several years, with new film exploitation and questions about Starz. She spoke to CBS about a possible starz acquisition, but those discussions failed because of the price. Lionsgate`s Class A shares jumped more than 8% on the news and closed at 10.87 $US. Discussions with Comcast have cooled shareholder morale in recent weeks, although there are signs that companies would avoid disruption, which would have been costly on both sides. Comcast Corp.
and Lions Gate Entertainment Corp., the owner of the Premium Starz cable chain, have reached a new distribution agreement for the network after months of tense negotiations. Wall Street observers also praised the new horse-drawn carriage deal with Comcast, which allowed Lionsgate to arrange equity financing and possibly a minority investor for Starz`s much-vaunted international deployment, and even a pure buyer for Starz after a previously notified informal offer from CBS before merging with Via. The short-term disruption of Comcast`s conflict should be offset by Lionsgate if Starz arrives enough new pay-per-view subscribers and positively observe premium service. On the distribution front, Lionsgate has bet on higher revenues for Starz of subscribers with a better single economy. Updated with the movement of stocks, the reaction of Wall Street. Comcast and Starz said Monday that they have entered into a long-term transportation contract, more than a week before the December 31 expiry date for the previous contract. The companies did not disclose the financial terms of the agreement.