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Does New Bundle with MGM+ Make Amazon a Potential Starz Buyer?

Amazon Prime Video is launching a bundle with Starz and its MGM+. The "long-term deal" could also be a feeler, of sorts.

Lauren Velez as "Evelyn Castillo" in "Power Book II: Ghost" on Starz

Lauren Velez as “Evelyn Castillo” in “Power Book II: Ghost” on Starz

Myles Aronowitz/Starz

Now Amazon’s MGM+ is playing with “Power.” And “Outlander,” and “P-Valley,” etc.

Starz and Amazon have struck what the companies are calling a “long term” deal to bundle Starz with MGM+ on Prime Video in the U.S. The subscription bundle, which is launching “in the coming weeks,” will cost $11.99 per month, the companies said on Friday. That’s a 20 percent discount vs. subscribing to both services on a standalone basis, which would cost $14.99. Financial terms of the deal were not disclosed.

Starz was already available as a Prime Video Channels add-on for $8.99 per month. (The Starz OTT app is also available for the same price on Amazon devices, like the Fire Stick.) This arrangement just brings it more within the family.

“We are excited to join forces with Amazon to offer Starz together with MGM+ to their millions of customers on Prime Video,” said Alison Hoffman, president of domestic networks for Starz. “Starz is a complementary service to general entertainment offerings, so we’re thrilled to see that bundling is now here and believe there will be many more bundling opportunities to come.”

OK, but how close, exactly, would you like to “join forces with Amazon,” Alison? There have been rumblings of a potential Paramount Global purchase of Starz, including one amplified by IndieWire just on Wednesday — but perhaps a new leader has just emerged.

IndieWire asked reps for Starz, Lionsgate corporate, and Prime Video if there are any discussions for Amazon to potentially purchase Starz, like it did MGM a year ago. Starz is most definitely for sale, and Amazon’s got the money. The spokespeople all declined comment on the query.

Amazon's Starz and MGM+ bundle landing page

Amazon’s Starz and MGM+ bundle landing page

Courtesy of Amazon

Starz is the home to “Outlander,” the “Power” universe, and the returning “Party Down,” among other series. MGM+, the former Epix, has shows “Godfather of Harlem,” “Billy the Kid,” and “Belgravia.” But the real MGM+ value lies within its film library, which is chock full of Metro-Goldwyn-Mayer and United Artists classics.

The MGM+ film archives house the James Bond and “Rocky” franchises, as well as “House of Gucci,” “Licorice Pizza,” “Silence of the Lambs,” “Bull Durham,” “Platoon,” “Robocop,” “Mississippi Burning,” “The Magnificent Seven,” “Barbershop,” “The Pink Panther,” “In the Heat of the Night,” “The Good, the Bad and the Ugly,” “Bill & Ted’s Excellent Adventure,” and “The Thomas Crown Affair.”

MGM, Lionsgate/Starz, and Amazon have a lot of intertwined recent history.

Amazon purchased MGM in March 2022 for $8.45 billion. Six months later, Amazon rebranded MGM’s Epix service as MGM+. The very same day, Lionsgate’s/Starz’s international streaming service STARZPLAY became Lionsgate+, and Lionsgate announced it was more likely to spin off (probably to sell) its studio as opposed to Starz itself. Spinning off (probably to sell) Starz was the parent company’s original plan to “unlock value” in both its studio businesses and media networks.

Wall Street agreed with the switcheroo. Not only are Starz and the Lionsgate studio worth much more apart than they are together, the film and TV studio is worth more than 4x Starz, according to analysts. The plan to separate the two by the end of September “remains on track,” Lionsgate CEO Jon Feltheimer said on his company’s earnings call last week.

“Separation will give our two core businesses the opportunity to pursue strategic and financial paths that make sense for each of them, and unlock greater value by operating as pure-play entities,” he explained. “We are exploring a number of financial strategies to leave both companies with strong balance sheets at the time of separation.”

Sam Heughan in Starz's "Outlander" Book 6

Sam Heughan in Starz’s “Outlander” Book 6

Robert Wilson/Starz

The Amazon/MGM purchase is the closest comp anyone has come up with for the true value of a re-split Lionsgate/Starz. Coincidentally, Lionsgate and MGM (and Viacom) were the owners of Epix, now MGM+, until Lionsgate bought Starz in 2017 for $4.4 billion. That’s when Lionsgate sold its 31.2 percent Epix stake back to MGM and Viacom, and MGM bought out Viacom’s stake.

Regardless of what happens after you untangle all of that — and untangle Starz from Lionsgate — one thing is clear: Starz could use the signal boost this current deal brings. Last week, Lionsgate said Starz lost 700,000 subscribers in the final quarter of calendar 2022 (as opposed to fiscal). As of December 31, Starz had 35.1 million subscribers; nearly 25 million of those from streaming. StarzPlay Arabia chipped in an additional 2.1 million subs.

Amazon does not report subscriber numbers.

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