Starz: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 29, 2026, Starz (NASDAQ:STRZ) reported top-line revenue growth driven by digital streaming expansion and renewed distribution deals. Managing content production costs directly lets the network convert steady subscriber payments into real free cash flow. Three things management said on the call stand out.

1. Content Ownership Expands Margins and Unlocks International Licensing

Producing proprietary shows cuts reliance on outside studios and opens up high-margin international licensing deals. Owning original programming gives the network full control over production budgets while preserving intellectual property, or IP, rights for long-term monetization.

We are just beginning to unlock the financial potential of these owned titles. Owning more of our own content gives us greater control over costs and allows us to retain more of the long-term value of successful IP. We are already seeing the benefits.
-- Jeffrey Hirsch, President and Chief Executive Officer

2. Strategic Bundling Drives Revenue and Boosts Customer Retention

Combining service offerings with partner platforms keeps subscribers connected longer and lowers churn, or customer cancellation rates. Selling through multi-service packages yields higher overall revenue than relying strictly on stand-alone subscriptions.

We see improved retention, north of 20%, with a lot of these bundles. And most importantly, bundling is accretive to revenue when compared to a la carte sales.
-- Alison Hoffman, President of Starz Networks

3. Balance Sheet Deleveraging Prepares Platform for Cash Flow Step-Up

Paying down high-interest corporate debt reduces ongoing interest burdens and speeds up cash generation. Disciplined debt repayment builds financial flexibility before legacy studio distribution contracts expire in 2028.

Even after incorporating this additional $67 million of term debt, we achieved 2.8x leverage at the end of the third quarter, and we still expect to end 2026 with leverage of approximately 2.7x. Importantly, we expect to achieve our leverage target of 2.5x or lower during the back half of 2027.
-- Scott MacDonald, Chief Financial Officer

Looking Ahead

Digital streaming revenue's expanding alongside disciplined expense controls, and executive leadership isn't hiding its satisfaction with the trajectory. A consistent slate of original releases, deeper platform integration, and strict budget limits position the business to capture lasting economic value.

We program Starz deliberately using our portfolio approach to sustain engagement year-round while maintaining disciplined investment. A consistent offering of compelling titles builds deeper engagement, which supports retention and a more durable revenue base.
-- Jeffrey Hirsch, President and Chief Executive Officer

Debt reduction stays ahead of target as operational efficiency turns steady subscriber retention into dependable cash flow.

Our financial story is simple, growing OTT revenue, expanding margins, growing free cash flow and reducing leverage.
-- Scott MacDonald, Chief Financial Officer

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