Starz Entertainment (STRZ) risk factors, FY2025 10-K

Risks Related to our Business

1. 01Starz is a smaller, less diversified company than its predecessor Old Lionsgate was, with a different financial profile
2. 02Starz could experience temporary interruptions in business operations and incur additional costs as it builds its information technology infrastructure and transitions its data to its own systems
3. 03The accounting and other management systems and resources of Starz may not be adequately prepared to meet the financial reporting and other requirements to which Starz is subject as a public company
4. 04Starz faces risks related to the restructuring of its business, which have affected and may continue to affect the value of its assets
5. 05Starz’s efforts to attract and retain subscribers may not be successful, which may adversely affect its business, financial condition, results of operations and cash flows
6. 06Starz’s business depends on viewer preferences, which are difficult to predict
7. 07Starz’s success depends upon the availability of quality programming in a highly competitive marketplace, and it may be unable to secure or maintain such programming
8. 08Starz depends on distributors that carry its programming, and no assurance can be given that Starz will be able to maintain and renew these affiliation agreements on favorable terms or at all
9. 09Starz relies on a few major distributors and the loss of any of those could reduce its revenue and operating results
10. 10Starz depends, in part, on distributors to market and present its services, the lack of which may result in reduced customer demand
11. 11Changes in consumer behavior, as well as evolving technologies and distribution models, may negatively affect Starz’s business, financial condition, results of operations or cash flows
12. 12Business interruptions could adversely affect Starz’s business, financial condition, results of operations and cash flows
13. 13Starz relies, in part, on third-party sales platforms as well as third-party internet-connected devices for distribution of its direct-to-consumer service
14. 14Starz is subject to payment processing risk
15. 15Starz faces substantial competition in all aspects of its business, including competition for marketing and carriage of its services
16. 16Starz faces economic, political, and regulatory risks from doing business in Canada
17. 17Starz’s business involves risks of legal claims related to the content included in its programming, which could adversely affect its business, financial condition, results of operations and cash flows
18. 18Starz may fail to adequately protect its intellectual property rights or may be accused of infringing intellectual property rights of third parties
19. 19Starz is, and may in the future become, subject to litigation and other legal proceedings, which could adversely affect its business, financial condition, results of operations and cash flows
20. 20Inflation or economic instability in the markets in which Starz operates could adversely affect Starz’s business, financial condition, results of operations and cash flows
21. 21If the technology Starz uses in operating its business fails, is unavailable, or does not operate to expectations, its business, financial condition, results of operations and cash flows could be adversely affected
22. 22Starz utilizes “cloud” computing services to deliver a distributed computing infrastructure platform for its business operations and any disruption of or interference with its use of its “cloud” computing servicer could adversely impact its business, financial condition, results of operations and cash flows
23. 23Protection of electronically stored data is costly and if Starz’s data is compromised in spite of this protection, it may incur additional costs, lost opportunities and damage to its reputation
24. 24Starz’s activities are subject to a variety of stringent and changing regulatory obligations, which may adversely impact its business, financial condition, results of operations and cash flows
25. 25The loss of any of Starz’s key personnel and artistic talent could adversely affect its business, financial condition, results of operations and cash flows
26. 26Starz’s business could be adversely affected by labor disputes or other union actions
27. 27Starz will be subject to risks associated with possible acquisitions, dispositions, business combinations, or joint ventures
28. 28Purported noteholders have instituted suit against Starz claiming that it breached the indenture governing certain 5.5% senior notes due 2029 by virtue of an amendment executed in connection with an exchange by certain noteholders for new notes

Risks related to Starz's Indebtedness

1. 29Starz may incur debt obligations that could adversely affect its business and profitability and its ability to meet other obligations
2. 30Starz may not be able to generate sufficient cash to service all of its indebtedness and may be forced to take other actions to satisfy its obligations under its indebtedness, which may not be successful
3. 31Despite its current level of indebtedness, Starz and its subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to Starz’s financial condition described above
4. 32The terms of Starz’s corporate indebtedness restrict Starz’s current and future operations, particularly Starz’s ability to respond to changes or to take certain actions

Risks related to Tax Rules and Regulations

1. 33Changes in, or interpretations of, tax rules and regulations could adversely affect us
2. 34Our tax rate is uncertain and may vary from expectations