Starz Revenue Declines 4% in Q2 as Streaming Stabilizes, Company Takes $147 Million Charge Related to Ending Universal Output Deal
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- Starz reported Q2 2026 total revenue of $307.9 million, down 4% year-over-year, while OTT revenue of $221.3 million was essentially flat versus $221.1 million a year earlier — the company's first streaming revenue growth in 18 months; excluding $3 million in divested Canadian operations revenue, streaming would have grown 1.4%.
- Starz took a $147 million restructuring charge in Q2 2026 tied to the April termination of its Universal Pictures pay-2 output deal, driving net loss to $189.4 million (vs. a $42.5 million loss in Q2 2025); CFO Scott Macdonald called it the expected final major content restructuring charge.
- CEO Jeff Hirsch cited the July 31 premiere of boxing drama "Fightland" (produced by 50 Cent) as Starz's No. 2 best-rated original IP launch ever, behind BMF's Season 1 debut in 2021, alongside strong results from the Outlander finale and Power Book III: Raising Kanan Season 5 premiere.
- Starz raised full-year 2026 adjusted OIBDA growth guidance from low single-digits to mid single-digits, with Q2 adjusted OIBDA of $60 million (up from $33.4M); management projects Q3 in the mid-$30 million range and Q4 in the mid-$60s, with a 20% adjusted OIBDA margin target for the back half of 2027.
- Starz launched two new distribution partnerships during the quarter — an add-on subscription on NBCUniversal's Peacock platform and a discounted bundle with Crunchyroll on Prime Video — as part of its pivot toward wider OTT availability.
- Starz's net debt stood at $566 million as of June 30, 2026, with an adjusted OIBDA leverage ratio of 2.9x; the company secured a $100 million increase in credit facilities ($67M Term Loan A, $33M revolving credit) while still expecting year-end 2026 leverage of approximately 2.7x.
Why it matters: The $147 million Universal exit charge clears the path on what Starz's CFO called the final major content restructuring — with final Universal cash payments due in 2028, Macdonald framed 2029 as a potential inflection year for free cash flow. Management's willingness to lift 2026 OIBDA growth guidance from low to mid single-digits, on the back of streaming's first YoY gain in 18 months and Fightland's strong debut, gives investors a concrete yardstick for whether the owned-IP pivot is working.
