Liberty Media said Tuesday that it will reattribute its Starz Media production unit and $15 million in cash to its Liberty Starz tracking stock, a move that some analysts believe is a precursor to a full spin of Liberty Starz.
Starz Media, currently housed within the Liberty Capital tracker, includes Anchor Bay Entertainment, Film Roman, Toronto Animation Studio, Proprietary Productions (which has a library of 42 films and television series) and Overture Films. Liberty said the attribution to Liberty Starz is effective Sept. 30.
Starz Media basically shut down Overture Film's movie operations in July, reaching a deal with independent studio Relativity Media to distribute its three remaining films, scheduled for release in the third and fourth quarters of this year. Overture's library, which currently includes about 16 films, will continue to be distributed to the home entertainment and television markets through Anchor Bay and other Starz units.
"We are pleased with the approval received late last week by the Liberty Board of Directors," Starz LLC CEO Chris Albrecht said in a statement. "Subsequent to the July 2010 Overture-Relativity transaction, we proposed that the remaining Starz Media assets be reclassified under the Liberty Starz tracking group in order to bring a cleaner financial and operating structure for the combined businesses of Starz Entertainment and Starz Media. We continue to make progress in evaluating strategic alternatives for certain remaining Starz Media assets, all with the goal of aligning the company's strengths to fulfill our vision for Starz as a vibrant premium brand and destination for consumers."
In a research note, Collins Stewart media analyst Tom Eagan wrote that while it is unclear when Liberty Starz will be spun into an asset-based stock, the attribution of Starz Media "is a step in that direction."
"The next structural step toward a [Liberty Starz] hard asset spin is the (already announced) ‘spin out' of [Liberty Interactive] from the Liberty Media tracking family, currently expected by end of year 2010," Eagan continued.
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