Starz eyes int’l output deals after building volume with wholly owned strategy

Starz and Sky boxing drama Fightland

US network and streamer Starz is focused on forging output deals with international buyers after building a large enough catalogue under its wholly owned content strategy.

The company has prioritised ownership of projects ever since its split from Lionsgate last year, including its UK boxing drama Fightland that it greenlit with Sky, untitled black rodeo series and an in-development drama titled Kingmaker.

During an analyst call for its Q2 earnings on Friday, Starz CEO Jeffrey Hirsch said the company will look to forge multi-title licensing deals with networks and streamers globally now that it has a growing volume of fully owned projects to sell.

Hirsch said: “A big piece of the strategy of rebuilding our content library and getting ownership back on the network is building volume and scale with the franchises that we will then launch and sell internationally.”

He later added: “As we build our slate back and get volume, it gives us opportunities to do output deals around the world.”

Starz’s wholly owned commissioning model is significantly more cost-effective than some of its other shows, according to Hirsch, who noted that Fightland costs around US$2.5m per episode less due to the partners involved.

“US$2.5m lower cost per episode is meaningful when you look at the number of episodes we do a year,” added chief financial officer Scott Macdonald.

Starz plans to spend under US$600m on content this year, with execs noting that keeping the spend under that amount will be the “trend” in the years ahead.

In addition to Fightland, other key titles for Starz in Q2 included the second season of Outlander: Blood of My Blood, the season-five return of Power Book III: Raising Kanan and Lionsgate psychological thriller The Housemaid, starring Amanda Seyfried and Sydney Sweeney.

On the M&A front, Hirsch reiterated that Starz is on the hunt for “marooned” linear networks. However, he said the company was happy with its current size and in no rush to make acquisitions.

Hirsch said: “We do think there’s an opportunity with a lot of these marooned linear networks that fit our demo very well, to give them a digital future through our technology, our customer acquisition and our ability to transition businesses from linear to digital, like we’ve done with Starz over the last 10 years.

“But the core business is operating so well… we just won’t do it [for the sake of it], because we don’t need to right now.”

In the second quarter, Starz revenue fell 3.7% to US$307.9m, while it posted an operating loss of US$175.5m, driven largely by a restructuring charge tied to the wind-down of its output deal with Universal Pictures. Adjusted operating income before depreciation and amortisation was up to US$59.9m.