A division of Sony Corp. (NYSE: SNE) and Starz (NASDAQ: STRZB) have extended a multi-year agreement under which Starz will remain the exclusive first-run TV outlet for new movies from Sony. The deal will runs through 2012, replacing a prior agreement that would have expired in 2016.
In December, Netflix Inc. (NASDAQ: NFLX) signed a deal with The Walt Disney Co. (NYSE: DIS), outbidding Starz and its sister Encore channels which were still owned at the time by Liberty Media Corp. (NASDAQ: LMCA). There’s no indication that Netflix was in the running for a deal with Sony, but it would be surprising if the streaming video purveyor hadn’t at least made some initial inquiries.
The Netflix deal with Disney starts in 2016, after Disney’s current contract with Starz expires. Netflix is thought to be paying about $300 million annually for the exclusive streaming rights to films from Lucasfilm’s Star Wars franchise, Pixar Animation Studios, and Marvel Studios among others. Starz had to counter and the deal with Sony is the response.
Maybe Netflix was never in contention or maybe the company just didn’t want to add another hundred million or so to its future financial commitments. The company needs to add about 3.7 million subscribers between now and 2016 to pay for the Disney deal without raising its monthly subscription rate.
Netflix shares are getting a shave today, down about 2.4% at $176.70 after a two-and-a-half week run of nearly daily 52-week highs.
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