Billionaire John Malone is starting his first motion-picture studio through his Starz cable- television unit, with a plan to spend as much as $240 million a year on feature films.
Overture Films will distribute eight to 12 live-action films a year, with budgets of $15 million to $20 million, Starz spokesman Tom Southwick said today. Chris McGurk and Danny Rosett, both of whom worked for the Metro Goldwyn Mayer studios, will be chief executive officer and chief operating officer.
Malone chose to create his own studio after his bid to buy Universal Pictures from France’s Vivendi SA fell through in 2003. The move will expand Starz’s operations beyond the traditional cable-TV business, building on the August purchase of IDT Entertainment Inc., an animated-film company.
“It’s a good way for them to diversify their pipeline,” said Andrew Baker, a Cathay Financial analyst in New York, who rates Liberty Capital shares “neutral.” The purchase also may help Starz cut costs to buy films as it competes with CBS Corp.’s Showtime and Time Warner Inc.’s HBO, he said.
Malone, 65, controls Englewood, Colorado-based Liberty Media, which operates the QVC shopping network and owns stakes in News Corp. and Time Warner Inc. Three years ago he bid for Vivendi’s Universal assets, which General Electric Co. won.
Shares in Liberty Capital gained 19 cents to $89.71 as of 11:16 a.m. New York time in Nasdaq Stock Market composite trading. Before today, they had gained 28 percent since the tracking stock started trading in May.
McGurk McGurk, who joined Starz as a senior adviser in August when the company acquired IDT, came up with the idea to create the studio, Southwick said. McGurk was chief operating officer at MGM from 1999 to 2005. Before that he worked at Universal Pictures for three years and Walt Disney Co. for eight.
Malone made a fortune building up Tele-Communications Inc. into the second-largest U.S. cable-TV operator before selling it in 1999. In May, he separated his Liberty Media businesses into two tracking stocks.
