Starz plans to lay off 10% of its staff and exiting the UK and Australia ahead of its separation next year from Lionsgate.
The news was relayed to employees today in a memo from CEO Jeffrey Hirsch (read it below) and confirmed to Deadline by a person familiar with the moves.
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“As difficult as it is, with many of our employees being impacted, we are making these changes to align our organization with the growth areas of the business and to prepare us for our next chapter as a standalone company,” Hirsch wrote in the memo.
Starz was acquired by Lionsgate in 2016 for $4.4 billion, but the parent company has entertained offers for it and explored other strategic options over the past couple of years. The final separation plan, which has been delayed in recent months due to Lionsgate’s purchase of eOne and other factors, is set to take effect in the first part of 2024. The spin will create two separate, publicly traded entities.
After investing in an ambitious plan to expand its streaming service around the world, Starz has been narrowing its scope in recent months. Last summer, Lionsgate announced Starz would exit Latin America, though at that time it was expected that the UK would remain a core territory along with the U.S. and Canada.
Unlike premium cable rivals HBO and Showtime also making the leap to streaming, Starz has sought to secure a place in the marketplace as a complementary offering rather than a broader, general entertainment one. It had 26.3 million subscribers as of June 30, most of them in streaming rather than on linear TV.
In September, Hirsch said he was “excited” for the separation. “I don’t think the Starz story is as clear as it could be because we’re part of a bigger company,” he said during an appearance at the BofA Securities Media, Communications & Entertainment Conference.
Lionsgate is scheduled to report quarterly earnings next Thursday.
Here is Hirsch’s full memo:
This morning we announced a company-wide organizational restructure, including the exit of the UK territory. As difficult as it is, with many of our employees being impacted, we are making these changes to align our organization with the growth areas of the business and to prepare us for our next chapter as a standalone company.
What has been instrumental to our successful transition from a linear only business into the new digital world, has been our laser focus on the changing environment, anticipating what lies ahead and adapting the organization to succeed in this disruptive environment. It’s why we continue to stand out as one of the only profitable premium networks.
As I have said many times before, I believe that we have the best team in the business and appreciate the contribution of each employee, which makes these organizational changes even more difficult. We are committed to ensuring that those impacted today are supported and their transition is as easy as possible.
We will have the opportunity to discuss these changes and more in our upcoming Business Update and in the meantime your leaders will be sharing information specific to your area of the business.
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