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Starz Nears Realignment: Why Lionsgate Won’t Hire a CEO to Replace Chris Albrecht

Nearly six months after Starz CEO Chris Albrecht exited in February, Lionsgate brass is moving closer to a revamp of the premium TV network’s executive structure.

According to insiders, at least one thing is clear: Albrecht is not expected to be replaced as CEO. Instead, Lionsgate chief executive Jon Feltheimer is taking a more active role in overseeing the channel.

As part of his increased involvement, Feltheimer is believed to have had exploratory meetings a few months ago with several Hollywood players — including YouTube global head of original content Susanne Daniels and former HBO programming president Michael Lombardo — to potentially install a new creative at Starz. (Lombardo isn’t believed to be interested, however, and said to be happy with his current job building out Film 44’s TV slate.)

That person would work alongside Starz chief operating officer Jeffrey Hirsch, and the two executives would share day-to-day oversight and report to Feltheimer. That two-pronged structure would allow Hirsch to continue to oversee the business and operations side of Starz, while the new exec would focus on programming. What that might mean for Starz programming president Carmi Zlotnik is unknown, although he could segue into more of a production role.

Feltheimer and Lionsgate have not been in a rush to name an exec to the top creative post, but are believed to now be ramping up their search. For his first step after Albrecht’s exit, Feltheimer moved forward in merging some of Starz’s key physical production units, as well as legal and some business affairs and finance, under Lionsgate Television Group chairman Kevin Beggs and president Sandra Stern. That integration is ongoing.

Also perhaps giving Lionsgate reason to hold off on major changes: ongoing scuttlebutt that CBS may be interested in purchasing Starz. CBS previously offered $5 billion for the channel, and Lionsgate is believed to have countered with a $5.5 billion price tag. There’s also media speculation that Lionsgate might turn around and pursue a merger with MGM.

Insiders stress that CBS and MGM aren’t factors in why Feltheimer hasn’t yet made post-Albrecht executive changes. But the uncertainty may limit the number of candidates interested in taking a chance on the job until it’s clear who they might report to in a year.

Other observers say Lionsgate hasn’t made a move because there’s still internal conversation on the direction of Starz, as execs such as Feltheimer, Hirsch and Beggs voice their opinions on what Starz needs — and what executive might be right for the job, depending on what it is.

Albrecht, who was forced out at HBO in 2007 after being arrested and charged with assaulting a girlfriend, joined Starz in 2010 when it was owned by Liberty Media. Liberty eventually spun off Starz into a separate business, which Albrecht continued to run.

Under Albrecht’s watch, Starz grew to more than 25 million subscribers. He helped push the premium cable network into an original fare strategy including “Power,” “Outlander,” “American Gods,” “Black Sails,” “Ash vs. Evil Dead” and “Vida.” The success of “Power,” which features a primarily black cast, and critical acclaim for shows like the Latino-themed “Vida” have enabled Starz to position itself as the home of “original programming for under-served audiences.”

Observers say Starz would be wise to lean further into those demographics, particularly as it’s unlikely the channel will have the same kind of resources to compete against the volume of an HBO or a Netflix. And if it does go that route, Lionsgate might contemplate pursuing an executive with experience in targeting African American, Latino and female audiences. 

Lionsgate acquired Starz in December 2016 in a $4.4 billion deal. Albrecht was said to be looking to keep Starz somewhat independent, while Feltheimer wanted a more active role in overseeing the channel. That clash led to Albrecht’s exit earlier this year.

And now that Starz is a fully owned company inside Lionsgate and no longer on its own, the CEO role is seen as unnecessary. 

Starz offers 17 pay TV channels (including Starz Encore) in the United States and has 4 million domestic streaming customers. The channel has been looking to expand its international footprint via its StarzPlay streaming app, available now in 51 countries. Feltheimer has pledged increased investment in Starz, and said in a May earnings call that Lionsgate was “executing on [a] plan” for the network.

At the same time, Lionsgate has been trimming costs, including announcing layoffs in its film division earlier this year, following a string of disappointments at the box office (with the exception of recent release “John Wick: Chapter 3 — Parabellum”). That’s led some to speculate that Lionsgate may be ripe for acquisition or slimming down to prepare for one. 

In December, Deutsche Bank analyst Bryan Kraft upgraded Lionsgate stock from “hold” to “buy” based on the potential he saw for Starz’s international strategy. “Starz’s lack of advertising and fully distributed cable network exposure gives it a more secularly insulated business model than other media companies, and we believe there is some potential for Lionsgate to participate in industry consolidation in a manner that creates value for shareholders,” he wrote.

Can Lionsgate find the right creative leader for the pay TV network despite all these distractions? Perhaps if the Starz perfectly align.

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