Lionsgate has made progress towards its plan to separate its studio operations from Starz, its pay TV and streaming division.

On Wednesday, the Hollywood studio announced the public filing of a Form S-4 registration statement with the U.S. Securities and Exchange Commission (SEC) regarding the anticipated separation of its studio business, which will be renamed Lionsgate Studios Corp., from its media networks business, primarily Starz.

The SEC filing includes a joint proxy statement and prospectus proposing that Lionsgate’s studio business, referred to as LG Studios, will officially separate from Starz, leading to the establishment of two publicly traded companies. The first, LGEC, will be renamed Starz Entertainment Corp., while the new entity will be called Lionsgate Studios Corp.

Previously, Lionsgate separated its film and TV studios business through a Special Purpose Acquisition Company (SPAC) to create an independently traded public company, with the intention of a formal separation from Starz in the future. This maneuver enabled Lionsgate Studios to operate as a standalone entity listed on NASDAQ, boasting a significant library of films and TV franchises as its primary assets.

The SPAC transaction was arranged so that the parent company retained 87.3% of the shares in Lionsgate Studios, while the SPAC, Screaming Eagle Acquisition Corp., held the remaining 12.7% equity stake.

Lionsgate has been assessing its options for Starz, including the official separation of the pay TV and streaming business from its studio operations. The objective seems to be the creation of two independent companies, allowing investors to evaluate the Starz and studio assets separately in a shrinking media and entertainment market.

While some potential buyers view Starz as a streaming service, others see value in Lionsgate and its programming library as a potential acquisition target for indie studios, particularly as digital giants like Apple and Amazon expand their influence in Hollywood.

Following the anticipated formal separation, pre-transaction shareholders of Lionsgate will possess shares in both newly formed public companies. The transactions, which involve a sophisticated share exchange structure for shareholders, are expected to be “generally tax-free for U.S. federal income tax purposes” for holders of LGEC and LG Studios common shares.

The prospectus outlines additional details concerning the proposed corporate structure of the separated studio and media networks businesses. Lionsgate intends to hold an annual general and special meeting for its shareholders at its Vancouver headquarters on a yet-to-be-determined date to seek approvals for the separation agreement, as per the SEC filing.

The Lionsgate board of directors endorses the plan for the formal separation of the studios business from Starz. After the transactions are finalized, Lionsgate anticipates that the studios business will be managed by CEO Jon Feltheimer, Vice Chair Michael Burns, and CFO Jimmy Barge, among others.

Feltheimer, who has led Lionsgate since 2000, recently extended his contract, which now runs through July 31, 2029. Post-separation, Starz is expected to be led by Jeffrey Hirsch, President and CEO, Starz Networks President Alison Hoffman, and CFO Scott Macdonald, among others.

Person

Jon Feltheimer, Michael Burns, Jimmy Barge, Jeffrey Hirsch, Alison Hoffman, Scott Macdonald

Company Names

Lionsgate, Starz, LG Studios, Starz Entertainment Corp., Screaming Eagle Acquisition Corp.

Titles

Lionsgate Studios

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