Hollywood studio Metro-Goldwin-Mayer is to buy Viacom and Lionsgate out of premium cable channel Epix.
MGM will pay around US$1.03 billion to acquire the 80.91% of Epix it doesn’t already own.
The ownership change comes after Lionsgate acquired Epix rival Starz in a US$4.4 billion deal, and made intentions to remove itself from Epix public.
MGM, Viacom and its subsidiary, Paramount Pictures, and Lionsgate jointly launched Epix in October 2009, and saw it reach a profit in its first year of operations.
This week’s deal values Epix at around US$1.28 billion. Viacom’s share in the business is 49.76% and Lionsgate is 31.15%.
Paramount is currently in the process of launching its own premium cable net in the US, Paramount Network, which will replace male-skewed station Spike.
For MGM, the deal comes after it bought United Artists Media Group in 2016, bringing producer Mark Burnett into the fold.
Epix, Epix2, Epix Hits and Epix Drive-In will now come fully under the MGM umbrella.
Under terms of the agreement, first-run theatrical releases from Paramount and Lionsgate will continue to premium on Epix, which has also been pushing into original programming through show such as Berlin Station (pictured), Graves and Get Shorty.
“The addition of Epix provides MGM with a premier distribution platform that complements our strong stable of new and library content in both film and television,” said Gary Barber, Chairman and CEO of MGM. “The acquisition creates increased revenue diversity, new opportunities for growth, and earnings accretion for the benefit of stockholders.
“I would like to thank Jon Feltheimer and his colleagues at Lionsgate and Bob Bakish and his colleagues at Viacom and Paramount, for their unwavering commitment to building the value of this premium service, and their continued commitment to provide their theatrical releases for years to come.”
Bakish, Viacom president and CEO, said: “As Viacom executes against its new strategy, we welcome the opportunity to strengthen our balance sheet by realising the value of our equity investment, while also extending the successful commercial partnership between Epix and Paramount Pictures with a new multi-year output agreement.
“MGM will be an outstanding steward of the network, and we look forward to working with Epix to bring its subscribers even more premium entertainment for years to come.”
Greenberg, Epix’s CEO, meanwhile said the agreement “between our founding partners MGM, Lionsgate and Viacom reflects the significant value already created in this joint-venture, while acknowledging the accelerated growth potential of Epix with a single, focused and committed owner”.
“The Lionsgate and Viacom priorities have evolved in recent months, and now is the right time for them to capitalize on their initial investment and focus their attention on their other businesses, while they continue to provide Epix with great studio movies and original series for years to come, he added.
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20 June 2018 @ 12:15:00 UTC