Lionsgate Execs: Altice Re-Up May Be “Imminent,” Others Eyeing CBS Pop Stake, “We’re Paying Attention” To M&A Race
During a conference call with Wall Street analysts about Lionsgate’s strong results in its fiscal third quarter, Starz chief Chris Albrecht noted progress in carriage talks with Altice to end a nearly six-week impasse on Optimum cable systems.
Responding to an analyst’s update that some local Optimum systems appear to have restored Starz, he clarified, “For the record, we’ve never taken the signal away from Altice, and we’re not really sure why they’re doing what they’re doing now,” he said. “But our teams are engaged and we hope that a deal is imminent.”
Several times on the call, the Lionsgate executive team fielded questions about the company’s future in a consolidating landscape. They did not directly address rumors of specific tie-ups with Viacom, CBS, Amazon or Verizon, but vice chairman Michael Burns affirmed, “We’re paying attention as the world says scale matters.”
While Lionsgate is seen as a ripe acquisition target, CEO Jon Feltheimer noted the company produces 40 current TV shows across broadcast, cable, SVOD and digital, meaning it is more partner than rival to many peers. He added, “Everyone has used the term ‘prey or predator.’ I think that is probably appropriate. At the end of the day, we love our business.”
Feltheimer also noted that pulling off a large-scale combination of companies is not a simple matter. In the case of Starz, which joined the Lionsgate fold last year, “the integration has been seamless,” he said. “But with these behemoths, these integrations can be difficult.”
That difficulty can mean talent or executives or entities potentially becoming disenchanted with life elsewhere and migrating to Lionsgate, a concept that has played out plenty during the 18 years of Feltheimer and Burns have run the company. “We have found that disruption is our friend,” he said. “Disruption is going to create amazing opportunities.”
Because of its unique vantage point, unlike some media figures aggrieved by the Department of Justice filing a lawsuit to block AT&T’s $85 billion Time Warner deal, Feltheimer asserted it was an appropriate action.
“We have made it known that we interested in maintaining a level playing field,” he said. “We think it’s really important for the competition that fosters great opportunity for the consumer and we would advocate anything that continues that. Obviously, when the government allowed the first merger, with DirecTV, the second became more problematic so we certainly support them taking a close look at what’s going on here.”
With CBS facing a call option in March on its 50% stake in the Pop cable network, Feltheimer was asked to offer guidance on the partnership. CBS is believed to have paid about $100 million for the stake in the former TV Guide Channel in 2013, before it was rebranded as Pop in 2014.
“We continue to enjoy a great relationship with Les Moonves and his team at CBS,” Feltheimer said, before noting that CBS is in formal discussions with Viacom about a merger. “As you may have noticed, they seem to be a busy with something a little bit bigger. We’ve had some interest expressed from some outside folks getting involved but we’re going to wait and have this discussion when CBS is ready.”
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