However, Starz chief executive officer Chris Albrecht, formerly the boss of HBO, knows expanding the company’s original programming slate must be the focus if fully leveraging all the aforementioned assets is the goal. Said Albrecht during the company’s recent earnings call: “original programming…is key to fortifying the Starz brand, expanding our global content portfolio and ultimately growing our already healthy business.”
The downside to this thrust is a swelling of production costs which should eat into operating income and net income in out years, but with HBO and to a lesser extent Showtime well ahead on the originals front Starz has some catching up to do. On tap to buttress “Magic City” and make up for the 2013 completion of the “Spartacus” brand: “DaVinci’s Demons,” a look at a young Leonardo from David Goyer, co-writer of the “Dark Knight” trilogy; “The White Queen,” based on the book by Philippa Gregory; and pirate adventure “Black Sails,” the first scripted TV project from filmmaker Michael Bay.
Savvy investors know, however, that I could erase all the previous paragraphs and counsel a purchase of Starz shares based solely on the chance that a media conglomerate could move to purchase Starz at any time—and likely at a handsome premium to the company’s current share price. What we have then is a healthy business armed with myriad growth prospects amid a pay-TV space marked by consistent growth. Plus, few know the premium channel business better than Chris Albrecht, and Liberty Media patriarch John Malone is among the shrewdest businessmen around. If he spun off Starz to unlock additional value, well, I believe there’s more value to be gleaned through Starz shares.
The article Starz Gazing originally appeared on Fool.com and is written by Chad Heiges
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.