Netflix shoots down Lionsgate merger rumours as studio shares swing wildly

Lionsgate shares surged 14% on Tuesday on merger speculation before falling back in after-hours trading after Netflix flatly denied it was pursuing an acquisition of the standalone studio.

A Netflix spokesperson left little room for ambiguity in the company's response to the market rumours. "Netflix is not interested and is not pursuing Lionsgate," the spokesperson said. Netflix shares, meanwhile, closed down 4% at approximately $79 on Tuesday — a pattern that has become familiar each time a new deal rumour surfaces, as investors grow increasingly concerned that the streamer's leadership now believes it needs a major acquisition.

Lionsgate's journey since the Starz split

Lionsgate separated from Starz in May 2025, with both entities positioning themselves as standalone acquisition targets in a consolidating industry. The studio had long been labelled a "free radical" — a term coined by media mogul John Malone — and the split was designed to give it greater strategic flexibility and a stronger stock price. That strategy has delivered results. Shares were trading at around $6 at the time of separation and closed at over $16 on Tuesday, before retreating 3.5% in late trading after Netflix's denial.

Scale concerns and a strong IP slate

Lionsgate Chief Executive Officer Jon Feltheimer has openly acknowledged that the studio lacks the scale of Hollywood's major players. However, the company holds valuable intellectual property, including the John Wick franchise, and carries a strong film and television slate.

Box office hit Michael is approaching the $1 billion mark globally, with a second film on the life and career of Michael Jackson already in development. The Hunger Games: Sunrise on the Reaping is set for release this autumn, and Mel Gibson's two-part The Resurrection of the Christ — having just completed filming — is lined up for spring 2027 and 2028.

What Wall Street thinks

Industry insiders suggest Lionsgate's willingness to sell has always been conditional on price. "Lionsgate has been a willing seller at the right price. But, in the past, whenever they got close, they were asking more than the market was ready for," one Wall Street source told Deadline.

Questions also persist over whether rights to certain titles in the studio's extensive library are entangled or shared with third parties — an allegation the company has previously pushed back on. The sharply higher share price may present an additional obstacle to any deal. Lionsgate declined to comment.

Netflix also rules out Imax and Roku

The streamer's denial extended beyond Lionsgate. A Netflix representative told Deadline the company is not interested in acquiring Imax either, as the large-format exhibitor explores its own strategic options. Private equity has been widely speculated as a likely buyer, though Deadline understands that Imax's long-standing adviser Raine is fielding interest from a range of strategic and entertainment sector buyers. Imax declined to comment. Netflix also did not bid for Roku, which on Monday announced plans to sell itself to Fox Corp, according to sources familiar with the situation.

Sony not for sale — but Netflix is interested

Deadline has heard that Netflix would potentially be interested in Sony Pictures if it came to market — and would be far from the only suitor. However, Sony Pictures Entertainment is not for sale. Parent company Sony Group unveiled what it described as a new Creative Entertainment Vision several years ago, placing the studio division at the centre of its corporate strategy, and has remained firmly committed to retaining it. SPE declined to comment.

A wider wave of consolidation

The speculation around Lionsgate is part of a broader industry realignment that analysts had anticipated following Comcast's announcement of plans to spin off Versant and separate its studios and streaming operations from its global networks business.

Major deals announced or completed in the period since include Paramount-Skydance, Paramount-Warner Bros., Charter-Cox, Nexstar-Tegna — which faces legal challenge from state Attorneys General — and Fox-Roku. Netflix itself walked away from a pursuit of Warner Bros. Discovery with a $2.8 billion break-up fee after declining to outbid David Ellison's Paramount.

The streamer has maintained that Warner Bros. was an unusual asset and that even that deal was a "nice to have," not a "need to have." Further consolidation across the sector is widely expected.