By Stuart Thomson

Lionsgate confirmed on Friday that its plan to spin off its studios business from the Starz television arm is on track by filing a draft registration document with the Securities and Exchange Commission (SEC).

While the filing is not public, Lionsgate said that “a wholly-owned subsidiary of Lions Gate Entertainment Corp confidentially submitted a draft registration statement on Form 10 with the Securities Exchange Commission (the “SEC”) relating to the proposed spin-off of the Company’s studio business, consisting of its Television Production and Motion Picture segments”.

It said that it “expects the spin-off to be completed on previously communicated timelines, subject to market and other conditions”.

Lionsgate shares climbed on Friday. The studio has been on a high of late thanks to the success of the latest film in the John Wick franchise.

Lionsgate executives have said that a separation of the two businesses makes sense, with Starz CEO Jeffrey Hirsch arguing that a separate valuation of that business would enable it to grow or merge with another entity more easily.

Lionsgate CEO Jon Feltheimer had originally stated an intention of spinning off the Starz business from the studio but last year reversed this formula with a plan to spin off the studio and rename streaming offering Starzplay as Lionsgate+.

In its most recent fiscal Q3 results to the end of December, Lionsgate’s media networks business posted revenue of US$380.3 million, down from US$388.9 million for the prior year, with growth in streaming revenue from Lionsgate+ offset by declines in domestic linear channel revenue.

The studio business, comprising motion picture and television production activities, posted revenue of US$894.2 million, up 25 per cent year-on-year, driven primarily by library sales and timing of scripted content.

While the motion picture business was up 5 per cent to US$288.8 million, TV production was up 38 per cent to US$605.4 million.