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Starz CEO Talks Potential Lionsgate Merger, Predicts ‘Domino Effect’

Investors have salivated over the prospect that Starz and Lionsgate will hook up.

Starz chief Chris Albrecht believes that talk of a union between the cable company, and the film and television studio is being fueled by a sense that the media business is about to enter a period of consolidation.

“The first piece is that sort of domino effect,” Albrecht said Thursday at the Gabelli & Company movie and entertainment conference in New York.

“Whether it’s with, you know, Viacom or Time Warner or whether it’s with Starz or Lionsgate or AMC … I think once something happens there are going to be more things that happen,” he added.

There are good reasons that Wall Street is predicting wedding bells may soon ring for Starz and Lionsgate. Both are mid-sized entertainment companies at a time when the industry is dominated by sprawling conglomerates that control not just studios, but also theme parks, cable distribution arms, and merchandising fiefdoms. It’s hard to be a publicly traded player when a box office flop or ratings dive takes the stock price with it.

They also have a motivated matchmaker in John Malone. The billionaire is a media consolidation champion. He connected the two companies in February 2015 by swapping a 4.5% stake in Starz for a 3.4% stake in Lionsgate and a seat on the company’s board. Merger talk intensified last winter after Lionsgate made a formal overture to Starz to initiate acquisition talks.

Albrecht joked that the pass may have been made to deflect attention from Lionsgate’s rocky financial results. The studio was hit hard after “The Hunger Games: Mockingjay Part 2” failed to match the box office performers of its predecessors.

“They did the filing the day before their crummy earnings call,” Albrecht said.

Often mergers fall apart because two chief executives can’t find a way to co-exist. That won’t be a problem for Albrecht, who said he was easily satisfied.

“You want me to stay, pay me,” Albrecht said. “You want me to go home, pay me.”

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