Feb. 11 (Bloomberg) -- Starz, the premium cable-TV channel spun off by John Malone’s Liberty Media Corp. last month, extended a contract with Sony Pictures Entertainment for first-run movie rights through 2021.
The deal provides content for all Starz platforms including Encore and online streaming services Starz Play and Encore Play, the companies said today in a statement. Financial terms weren’t disclosed.
The agreement guarantees a library of movies for Starz after Walt Disney Co. said in December it was ending a deal with the channel for first-run rights in 2016 and shifting to Netflix Inc. Starz, along with its Encore and Movieplex channels, has about 55 million TV subscribers, who typically pay an additional monthly fee. Chief Executive Officer Chris Albrecht is also focusing on original programming with shows including “Spartacus,” “Boss” and “Party Down.”
Starz rose 7.4 percent to $17.91 at the close in New York. Sony Corp.’s American depository receipts rose 0.5 percent to $14.99.
Greg Maffei, Liberty’s CEO and Starz chairman, has signaled that the spinoff may be a precursor to an eventual sale of the cable channel. Maffei said in September that another company with more content “might be able to do more” with Starz.
It’s a surprise Netflix didn’t also win the Sony rights, Richard Tullo, an analyst at Albert Fried & Co. in New York, said in a note to clients. Netflix needed the rights “to limit churn and grow subscribers,” wrote Tullo, who rates the shares underweight, the equivalent of a sell rating.
Joris Evers, a Netflix spokesman, didn’t return a phone call seeking comment. Netflix fell 1.7 percent to $177.89.
The previous contract between Englewood, Colorado-based Starz and Sony Pictures, secured the rights through 2016.
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