Starz channels MGM library bid

Companies would be equal partners if deal goes through, Sie sez

From Western Cable

John Sie, chairman and CEO of the Starz Encore Media Group, said he’s talking to MGM about creating one or more new all-movie cable networks that would draw on MGM’s vast library of movies.

In response to a question at a press conference during the Western Cable Show at the Los Angeles Convention Center, Sie said, “We believe we’re the best place for the MGM movies,” referring to reports that MGM has also held conversations with Chuck Dolan’s Rainbow Media Services for a new movie channel.

Starz and MGM would be equal partners in the new movie service if the deal goes through, Sie said, with Starz handling the distribution of the channel to cable operators.

Answering another question, Sie said he sounded out 20th Century Fox about wresting the studio’s theatrical-movie output away from HBO. But HBO was able to outbid Starz Encore, Sie said, because HBO’s offer included the four years remaining on the existing contract, which doesn’t expire until 2004. HBO and Fox added six years onto the current deal, pushing it to 2010. Sie said that extensions of existing contracts, particularly ones with as many as four years still remaining, almost invariably go to the incumbent.

Starz used the press conference to announce it was officially changing its name from Encore Media Group to Starz Encore Media Group and was creating a Starz Encore Super Pak made up of the 12 channels it now distributes.

Sie said Starz Encore plans to lay out a marketing budget of $30 million beginning Feb. 28, to brand the Super Pak, urging cable operators to offer it to digital subscribers for $12 a month as a lure to get customers to buy high-tech set-top boxes.

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