A major cable network operator is working on a possible acquisition of the premium channel Starz, Bloomberg reports. The story cites unnamed sources saying AMC Networks Inc. is in preliminary discussions with Starz, whose largest individual investor is veteran cable executive and entrepreneur John Malone.
“An AMC-Starz deal would put Malone, who has driven cable and telephone industry consolidation in the past, in the thick of the action as film and TV companies weigh mergers,” Bloomberg reports. “A combined AMC Networks and Starz would gain leverage in negotiating fees from pay-TV carriers, which have already paired off to lower costs as customers defect to online players like Netflix Inc.”
Similar talks late last year between AMC Networks and Starz failed to result in a deal, Bloomberg notes, with the two sides reportedly at odds over the company’s valuation. Starz owns the premium movie channels Starz and Encore.
“Starz’s enterprise value has increased since then to more than $5 billion from about $4 billion, partly on speculation that Lions Gate Entertainment Corp. may buy the Englewood, Colorado-based company,” the story notes.