Streaming TV company Roku and the private equity firm Apollo Global Management have expressed an interest in acquiring a minority stake in the premium cable network Starz, according to a report published this week.
On Tuesday, the Wall Street Journal said Roku and Apollo Global had formed a pact that could lead to acquiring up to 20 percent of the LionsGate-owned movie network. The Journal said its information came from anonymous sources who were familiar with the strategy.
The move comes after LionsGate expressed interest in a possible sale or spin-off of Starz, which offers a standalone, direct-to-consumer streaming service along with the multiplex cable movie network. It follows media consolidation in other parts of the industry, including Amazon’s recent purchase of MGM Studios, which allowed it to own MGM’s studio content as well as a controlling interest in the Epix movie network.
Starz currently has more than 19 million subscribers who pay for its domestic streaming service as well as a global variant called StarzPlay. The service offers access to the same content that appears on the Starz cable network, with the lineup mostly consisting of LionsGate-produced and distributed shows and movies as well as licensed content from Paramount Global, the Walt Disney Company and Warner Bros Discovery.
Three years ago, Paramount Global (then ViacomCBS) expressed interest in acquiring Starz, but negotiations ended without a potential deal in place.
Some media experts said Roku landing a minority investment in Starz could amount to a “try before you buy” strategy ahead of a fuller acquisition.
Over the last several years, Roku has shifted its focus from its budget streaming devices toward content acquisition and development for its ad-supported Roku Channel, with the latter seen as a primary driver of long-term revenue.