Netflix, Inc. (NFLX) Seeing Starz (STRZA) (You Should, Too)

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In a nutshell, that’s why Starz is already a buy in my book. Monday’s news, though, only further cements the company’s status — and its popularity among astute investors.

Sony Corporation (ADR) (NYSE:SNE) sees Starz
Monday saw a major upset to streaming champion Netflix’s quest for content supremacy — Starz re-signed a huge content deal with Sony that provides exclusive content to Starz through 2021. Netflix was largely anticipated to be at least a part of this deal, if not the only company involved.

As of this writing, financial terms were yet undisclosed, yet we can assume this is a deal similar to Netflix’s estimated $300 million per annum to The Walt Disney Company (NYSE:DIS). (Disney is currently under contract with Starz until 2016.)

With Sony’s valuable properties, Starz will have a very competitive library for its Starz, Encore, Movieplex, and on-demand offerings. This allows Albrecht and his team to focus on original programming, which has great potential to drive growth going forward.

Swift boat
Even company chairman and Liberty CEO Greg Maffei admits that Starz is a great buy for a larger media company. With news of the Sony deal, I would not be surprised to see deal makers knocking on Starz’s door in the near future.

The stock shot up to $17.91, or 7.44% higher than its closing on Friday. While this is unfortunate for some (I like my cheap companies to remain cheap as long as possible), there is still plenty of upside potential given my original thesis with the new bonus of Sony’s catalog through 2021. Stock buyers interested in a relatively short investment horizon would do well to take a closer look at Starz before it’s too late.

The article Netflix Seeing Starz (You Should, Too) originally appeared on Fool.com and is written by Michael B. Lewis.

Fool contributor Michael B. Lewis has no position in any stocks mentioned. The Motley Fool recommends Netflix and Walt Disney. The Motley Fool owns shares of Netflix and Walt Disney.

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