Lionsgate Enters the Mix of Media Companies Looking to Merge — With Amazon, Verizon and CBS/Viacom Circling

By Scott Porch @scottporch
Published Jan. 18, 2018, 3:00 p.m. ET

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With several big media mergers already underway and a fresh push to recombine CBS and Viacom already in motion, there’s another new entrant this week in the 2018 media-consolidation sweepstakes. Lionsgate — which owns the John Wick film franchise, STARZ premium channel and Tribeca Shortlist SVOD service — is seeing its share price pop on rumors that it may be a merger target.

Wall Street pushed Lionsgate’s share price up 5 percent in early trading today following Deadline’s report Wednesday afternoon that Amazon, Verizon and a CBS-Viacom combo are all considering an acquisition of the company. Amazon and Verizon are both looking for content, and a CBS-Viacom-Lionsgate team-up would be a U.S. powerhouse with broadcast, cable, premium and streaming channels plus a more competitively sized film and TV studio.

Although small as media companies go, Lionsgate ($6.8 billion) has made itself a prime acquisition target over the last year with a global film franchise in John Wick; a prestige film in La La Land; a surprise hit in the Julia Roberts film Wonder; a growing TV catalog that includes Mad Men, Orange Is the New Black and Nashville; booming subscriber growth at STARZ (which has a John Wick series in development); and a portfolio of streaming services that includes Tribeca Shortlist, Kevin Hart’s Laugh Out Loud and Pantaya.

Netflix’s success in building a global, direct-to-consumer service with 109 million worldwide subscribers, and Morgan Stanley media analyst Benjamin Swinburne in a research report out this morning raised his Netflix forecast to 231 million worldwide subscribers by the end of 2025. That land grab for streaming subscribers drove Disney’s $52.4 billion deal in December for 21st Century Fox’s entertainment assets, and it’s driving other media companies toward similar deals.

Media analyst Rich Greenfield wrote in a December research note he expected Lionsgate and MGM — the two most significant indie studios — would be major acquisition targets in 2018.

Scott Porch writes about the TV business for Decider, is a contributing writer for Playboy, and hosts a weekly podcast about new digital content called Consumed with Scott Porch. You can follow him on Twitter @ScottPorch.