- **Content-Driven Growth**: Blood of my Blood added 3rd-highest subscribers in Starz history, with 40% higher viewership than Outlander finale.
- **Margin Ambition**: 20% OIBDA margin by 2028 via 30% lower per-episode costs for new shows like Fightland.
- **Financial Health**: $33.4M adjusted OIBDA, 3.2x leverage, and $200M annual free cash flow at 4x OIBDA valuation.
- **Strategic Focus**: No rate hikes in 2025-2026; prioritizing subscriber growth through new distribution platforms and content slate optimization.

**【CEO Opening Remarks】**
- Starz is positioned as a digital-first, profitable network catering to women and underrepresented audiences, with a focus on content that avoids linear advertising dependency.
- 2025 adjusted OIBDA target of $200 million, with 70% conversion to free cash flow in 2026, aiming for a 20% margin by 2028.
- Valuation at 4x adjusted OIBDA is undervalued compared to peers, despite generating $200 million in annual free cash flow.

**【CFO Financial Update】**
- Q2 2025: 12.18M U.S. OTT subscribers (-120,000 QoQ), total revenue $319.7M (-2% QoQ, -7.4% YoY), adjusted OIBDA $33.4M.
- Sequential revenue decline due to BMF Season 4 underperformance, but Blood of my Blood driving subscriber growth.
- Net debt $573.5M, leverage 3.2x (12-month trailing), targeting 3.1x by year-end.

**【Q&A Highlights】**
- **M&A Strategy**: Focus on deleveraging to 20% margin by 2028 before pursuing acquisitions; current focus on content slate optimization.
- **Margin Targets**: 20% OIBDA margin by 2028 via reduced content costs (e.g., Fightland at 30% lower per-episode cost) and subscriber growth.
- **Content Performance**: Blood of my Blood added 3rd-highest subscribers in Starz history, Spartacus reboot expected to attract 12-year fanbase.
- **ARPU Trends**: Stable ARPU due to multi-month subscription offers, no rate increases planned for 2025-2026.
- **Franchise Success**: Spin-offs (e.g., Outlander prequels) retain 85%+ of original audience, vs. industry average of 50%.
- **Lionsgate Relationship**: Strong collaboration on Spartacus, Origins, and Ballerina, with cost-effective 18-episode season structure.

Starz Entertainment (STRZ)-14 Aug 25-2025 Q2 Earnings call transcript

- **Studio Recovery**: Mid-budget films drive 22% YoY library growth to $954M, with *Ballerina* and *Michael* set to launch.
- **Starz Momentum**: Sequential OTT growth of 170K, new Amazon bundle, and Q4 slate poised for subscriber gains.
- **Q4 Surge**: Studio OIBDA expected +45% YoY, fueled by film carryover and TV deliveries.
- **Separation Readiness**: Studio debt to $1.6B (5.5x leverage) post-separation, Starz as digital-first platform with 3x leverage.
- **Cost Efficiency**: Tax incentives, backend deals, and bundled distribution reduce costs across businesses.


**【CEO Opening Remarks】**
- **Motion Picture Recovery**: Mid-budget films like *Den of Thieves 2* and *Flight Risk* drove strong profitability, with trailing 12-month library revenue hitting $954 million (22% YoY growth). Upcoming films include *Ballerina* (John Wick spinoff) and *Michael*.
- **Television Growth**: 16 scripted series in production, including *The Studio* (Apple TV+), *Ghosts* (CBS), and *The Rookie* (ABC). New models with Blumhouse and MGM+ expand into fresh markets.
- **Starz OTT Momentum**: Sequential subscriber growth of 170,000 to 12.6 million, driven by *Outlander* and Lionsgate films. New bundles with Amazon Prime, Vizio, and YouTube TV enhance distribution.
- **Ancillary Revenue**: *John Wick Experience* launching in Vegas, stage plays (*Hunger Games*, *Dirty Dancing*), and video games to diversify income streams.

**【CFO Financial Update】**
- **Q3 2025 Results**: Revenue $971 million, Adjusted OIBDA $144 million, Free Cash Flow $13 million. Studio OIBDA up 45% YoY to $112 million.
- **2025 Outlook**: Studio OIBDA $300-320 million, Starz NA OIBDA $200 million. Q4 Studio segment profit expected to jump 45% YoY, driven by film carryover and TV deliveries.
- **Balance Sheet**: Studio net debt $1.8 billion (6.5x leverage), Starz $568 million (3.3x). Post-separation, Studio will have $800M ABL and Starz $300M Term Loan.

**【Q&A Key Takeaways】**
- **Starz Separation**: Targeting mid-April 2025 close, with Starz as a digital-first platform. Amazon Prime deal secures 4 films from 2025 slate and full 2026-2028 slates, boosting pay TV window revenue.
- **Cost Control**: Studio leveraging tax incentives (e.g., New Jersey), backend participation deals, and efficient production models. Starz reducing marketing spend via bundled partnerships.
- **Borderlands Post-Mortem**: Failed to adapt to shifting IP landscape; future films will prioritize risk-adjusted budgets and timely execution.
- **Subscriber Trends**: Starz OTT growth to continue with Q4 slate (*Canaan*), while linear subs decline driven by industry-wide cord-cutting.


Lions Gate Entertainment Corp. (LGF.A) Q3 2025 Earnings Call Transcript

- **Content Success**: Blood of My Blood drives 40% higher viewership than Outlander finale, with subscribers added at higher price points.
- **Margin Target**: 20% adjusted OIBDA margin by 2028 via 30% cost reduction in owned/produced content (e.g., Fightland) and modest subscriber growth.
- **Financial Health**: $33.4M Q2 OIBDA, 3.2x leverage, and $573.5M net debt; 2026+ free cash flow conversion to 70% of OIBDA.
- **Strategic Focus**: Digital-first model, under $4x OIBDA valuation, and 2025-2027 deleveraging plan differentiate STARZ from peers.

**【CEO Opening Remarks】**
- STARZ is positioned as a digital-first, profitable network targeting women and underrepresented audiences, with a focus on content that punches above its weight class.
- Q2 2025 adjusted OIBDA of $33.4M (down 63% sequentially) due to underperformance of BMF Season 4, but confident in recovery driven by Blood of My Blood and upcoming slate.
- Blood of My Blood exceeded expectations, generating 3rd-highest subscriber additions in STARZ history and 40% higher viewership than Outlander Season 7 finale.
- 2028 target: 20% adjusted OIBDA margin through cost improvements (e.g., Fightland at 30% lower per-episode cost than recent premieres) and modest top-line growth.
- 2025 outlook: ~$200M adjusted OIBDA, 70% conversion to free cash flow in 2026, and leverage reduction to 3.1x by year-end.

**【CFO Financial Commentary】**
- Q2 2025 metrics:
  - OTT subscribers: 12.18M (down 120K sequentially)
  - Total revenue: $319.7M (down 2% Q/Q, 7.4% Y/Y)
  - Adjusted OIBDA: $33.4M (down 63% Q/Q)
  - Net debt: $573.5M (down $42.1M Q/Q)
  - Leverage: 3.2x (12-month trailing basis)
- 2025 transition year: content payment timing causing cash flow volatility, but 2026+ normalization expected.
- Federal tax benefits from One Big Beautiful Bill Act eliminate near-term cash tax payments.

**【Q&A Highlights】**
- **M&A Strategy**: Focus on delevering to 20% margin by 2028 before pursuing scale; STARZ's tech stack and demo focus make it a valuable platform.
- **20% Margin Risk Factors**: Success of Fightland (first owned/produced show with 30% lower cost structure) and content slate execution critical.
- **ARPU Dynamics**: Stable at ~$11.50/quarter, with multi-month subscription offers reducing churn.
- **Spartacus Return**: 12-year hiatus show benefits from fan demand and diverse casting (African American female gladiator), positioning for long-term success.
- **Lionsgate Relationship**: Strong collaboration on Spartacus, Origins, and Ballerina; 18-episode Origins order reflects cost-effective partnership.


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