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Starz Providing Surprise Merger Bonus as Lionsgate Beefs Up Global Licensing

A $100 million check is a nice way to start a relationship. That’s the amount generated for Lionsgate, from the licensing of Starz original series “Power” and others to Hulu — a sum unanticipated at the time of the $4.4 billion pact that combined Lionsgate and Starz in December.

The Hulu deals are a reflection of how the enlarged studio is capitalizing on new opportunities, from the addition of key hires such as Jared Goetz to help drive distribution, to synergizing with Liberty Global, which under John Malone owns a 3.4% stake in Lionsgate.

Capitalizing on Starz content is one of the challenges facing Goetz, who has just joined Lionsgate to lead sales in North America. Having overseen film and TV sales to Netflix, Amazon and Hulu during his long tenure at Disney, he has the digital experience Lionsgate craves as potential new buyers, including Facebook and Apple, enter the market.

“He did billions of dollars’ worth of deals,” says president of Lionsgate’s worldwide TV and digital distribution group Jim Packer, to whom Goetz reports. “We need that expertise. In one way, his hire future-proofs our team.”

Goetz has worked in electronic sell-through, where Lionsgate just had its biggest ever property with “John Wick: Chapter 2,” which grossed $92 million at the box office, then minted more than even the studio’s blockbusters such as “The Hunger Games: Mockingjay” have earned in EST.

“I have been fortunate enough to work with some of the best distribution executives in the business,” Goetz says. “I look forward to using what I have learned from each of them to continue developing an already strong distribution team at Lionsgate.”

Packer has also moved Gene George, formerly head of sales at Starz, to executive vice president of international, reporting to Peter Iacono, president of international TV and digital distribution. All that programming in the Starz library helps justify foreign outposts for Lionsgate, which has opened a Canada office, run by Susan Hummel. The studio is also evaluating getting boots on the ground in Southeast Asia, India and Australasia.

Having premium dramas for worldwide distribution will also help Liberty Global, which counts Virgin Media in the U.K., UPC in the Netherlands and UnityMedia in Germany among its platforms. The distribution team’s deal for “The Rook,” the new supernatural drama series from “Twilight’s” Stephenie Meyer, makes it the first to air on Starz in the U.S. in addition to being Liberty Global’s first international original series, playing across all of its cable platforms. It bows on Starz and Liberty Global in early 2018.

Lionsgate has six other shows in development at Starz and on the distribution side wants to do more with Liberty Global. “We’ve done some licensing deals with Liberty Global, but this is a big deal on ‘The Rook,’” Packer says. “This is a one-off agreement, but not the last one.”

For Liberty Global, creating premium drama is new ground. The move comes weeks after it joined forces with TPG Growth to launch a new U.S. indie studio, Platform One. It will  generate originals for Liberty Global and will be working with third parties.

“We have been somewhat opportunistic in terms of our content strategy, but ‘The Rook’ and Platform One are far from random,” Liberty Global chief programming officer Bruce Mann says. “We want to be more vested in content.”

Liberty Global isn’t about to get into a programming arms race with Sky or Netflix, which is actually available on several of its cable systems, but it has placed a handful of programming bets. Four more originals are coming through from All3Media, the British super-producer, with the first bowing late next year. “The Rook” is leading the charge.

For Lionsgate, the Starz-Liberty Global deal for “The Rook” is proof of the synergy created by its marriage to Starz. “The Starz acquisition not only allowed us to grow our content platform exponentially but provided us with great executives to round out our global distribution presence,” Packer says. 

Lionsgate CEO Jon Feltheimer adds that the expansion underlines the increased distribution opportunities that his company now has with Starz in the fold.

“Jim and his team have shown great leadership in building a sales and distribution business that continues to expand our brand around the world,” he says. “It is being driven by a massive content platform, complemented by visionary global partners and executed with a high degree of planning and foresight.”

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