Back to top

Analyst Blog

Liberty Media Corp. (LMCA - Analyst Report) has completed the spin-off of its Starz Entertainment segment as a separate entity. According to management, the spin-off of Starz will unlock the latter’s value by optimizing its capital structure and enabling Starz to find several alternative ways and partnerships for both content creation and distribution. At the end of the third quarter, total subscribers base of Starz increased 9% to 20.8 million while its sister TV channel Encore had 34.3 million subscribers, up 5% year over year. Together, these two channels command 55.1 million subscribers.

Starz is currently trading at NASDAQ as Starz Inc. (STRZA - Snapshot Report). The company is famous for its premium movie channels and competes primarily with HBO of Time Warner Inc. (TWX - Analyst Report) and Showtime of CBS Corp. (CBS - Analyst Report). At present, HBO has about 39.5 million subscribers whereas Showtime has nearly 21.3 million subscribers.

Last October, Starz launched its two TV Everywhere services with Cox Communications Inc. The two online authenticated services are known as STARZ PLAY and ENCORE PLAY. Later, the company also launched its third streaming services called MOVIEPLEX PLAY with Cox. All these three services collectively offer 1,500 premium movies and TV programs every month.

Initially, STARZ PLAY and ENCORE PLAY will be accessible through Internet and iPhone, iPAD, and iPod through Wi-Fi and wired broadband connections. However, Starz stated that mobile connectivity, access through gaming consoles and availability of these services on Android-based devices will be launched later on. Furthermore, Starz is trying hard to enter into similar types of deals with other large pay-TV operators.

Starz currently has about $1.1 billion of debt and access to a $450 million bank credit facility. Liberty Media earlier stated that the spin-off is envisioned to provide a cash dividend of $1.8 billion to the company. We believe that the spin-off of Starz will help Liberty Media to increase its stake in Barnes & Noble Inc. (BKS - Snapshot Report) and Live Nation Entertainment Inc. (LYV - Snapshot Report), together with SIRIUS XM Radio Inc. (SIRI - Analyst Report). Liberty Media recently got regulatory approval to control more than 50% stake of SIRIUS XM.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%