WSJ News Exclusive | Roku and Apollo Global Team Up to Bid for Stake in Cable Channel Starz

Roku, known for its set-top boxes that power streaming apps, has been stepping up investments in original programming. Lions Gate and Roku recently announced a deal that would see the studio’s films run exclusively on the free, ad-supported Roku Channel, after being aired on Starz.

Roku last fall announced plans to develop more than 50 original shows over the next two years for its Roku Channel. In December, Roku released its first original movie, “Zoey’s Extraordinary Christmas,” a spinoff of NBC series “Zoey’s Extraordinary Playlist,” which was produced in partnership with Lions Gate.

Selling a stake in Starz would help Lions Gate raise cash and place a value on the premium channel, the people familiar with the situation said. Roku and

Apollo

could acquire up to a 20% stake in Starz, but the tandem doesn’t agree on valuation with Lions Gate, one of the people said.

It couldn’t be learned whether other bidders have emerged for Starz.

Selling Starz could potentially make Lions Gate an acquisition target, as big players across the entertainment landscape, from streamers to TV networks, hunt for fresh content. Lions Gate is the studio behind the “John Wick” and “Hunger Games” movie franchises, and its shows include

CBS’s

“Ghosts” and Apple TV+’s “Mythic Quest.”

Lions Gate Vice Chairman

Michael Burns

has said recent deals in the media space gave the company confidence that it was the right time to consider selling or spinning off Starz.

Amazon

purchased the MGM studio for $6.5 billion while Discovery Inc. merged with

AT&T Inc.’s

WarnerMedia,

deals that closed this year.

Starz, whose premium cable channel competes with HBO and Showtime, entered the direct-to-consumer streaming game and said its global streaming subscriber count increased 44% year-over-year to 19.7 million as of Dec. 31.

In 2019, Lions Gate was in talks to potentially sell Starz to CBS, now part of Paramount Global, but the discussions never came to fruition.

—Joe Flint

contributed to this article.

Write to Lillian Rizzo at [email protected] and Miriam Gottfried at [email protected]