Starz Ends Universal Output Deal, Citing Lower-Than-Projected Viewership

Starz reported first-quarter 2026 earnings Thursday revealing wider losses, largely due to content-impairment charges — but the media company gave indications it’s improving its financial position one year out from its spinoff from Lionsgate.

During a call with analysts later Thursday, Starz president and CEO Jeffrey Hirsch announced Stars has exited its Pay-2 film deal agreement with Universal Pictures. The move is being made to help Starz accelerate its planned path to profitability.

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“The Universal titles which we originally planned to air through calendar ’28 are incredibly popular and bring with them tremendous box office strength,” Hirsch said. “However, due to the high subscriber overlap between Amazon and Starz, these titles are heavily watched before they come to us in the Pay-2 window, this unique dynamic with Amazon has resulted in lower viewership than we originally projected. In order to replace the revenue component of the pay to we will reinvest and acquire high performing titles at superior economics. As a result, I’m pleased to announce that our outlook for reaching 20% margin has moved 12 months forward to the back half of 2027 instead of exiting 2028 we are thankful to our partners at Universal for working with us to find a mutually beneficial solution.”

Variety has confirmed a few select Universal titles will still roll out on Starz this year.

Total revenue dropped 7.2%, to $306.9 million, and Starz posted an operating loss of -$152.8 million versus -$142.3 million in the year-earlier period.

Over-the-top streaming revenue for the January-March quarter was $211.1 million, down from $225.5 million in the year-ago quarter. Linear and “other revenue” came to $95.8 million vs. $105.1 million.

Starz has confirmed it is no longer reporting subscriber numbers, with last quarter’s results being the most recent data: The premium TV media company closed Q4 2025 with 12.7 million U.S. streaming subscribers, an addition of 370,000 customers from the previous period. Total subscribers across Starz platforms reached 17.6 million, up 170,000 subs.

Starz reported a net loss of $164.9 million (versus a net loss of $153.0 million in Q1 2025), translating to a loss per share of $9.83. The most recent quarter included $139.1 million in restructuring charges, including $128.1 million in content impairment write-downs. Excluding depreciation, amortization and the restructuring charges, Starz said its adjusted OIBDA for Q1 was $58.0 million — a 38% decline from $93.3 million a year ago.

But it sounded an optimistic note going forward: In announcing its Q1 financial results, Starz leadership said it accelerated its target for 20% adjusted operating income before depreciation and amortization (OIBDA) margin to the second half of 2027, one year ahead of its prior guidance of the back half of 2028. The company also pointed out that its OTT revenue increased ever-so-slightly sequentially — from $210.3 million in Q4 to $211.1 million in the most recent period.

Equity free cash flow stood at $68.7 million for the quarter. Starz’s current debt totaled $625.1 million, which includes a Term Loan A credit facility and $325.1 million in senior unsecured notes. Net debt was $523 million at the end of the quarter.