As Lions Gate Entertainment Corp. explores options to maximize value for its assets, including selling stakes in its holdings, the company now seems to favor separating its studio operations from its pay TV and streaming service, Starz / Starz Encore (US).

Vice Chairman Michael Burns told investors on Sept. 7 that "We're talking about not necessarily selling a stake here or there. We're talking about separating the businesses."

Should there be a Starz spinoff, Lions Gate could still sell a stake in either business or both. "That is obviously something that we'll consider. We talked about, for a long time, delevering and we're going to continue to delever," said Burns at an investor conference. "We don't think that we're getting the value of both of our core businesses."

While the companies could separate through a spinoff, they would continue to do business together as a relationship between the studio and Starz would remain. "And all of those things are either set in place or in the process of being set in place," said Burns. "So yes, in many cases we'll be 'separated' but in many instances, we'll be very much together."

At the same time, Starz could become an acquisition target or look to become a bigger entity.

Acknowledging continued industry consolidation, Starz President and CEO Jeffrey Hirsch said Lions Gate has done "a phenomenal job" in forging a 17,000-title library. That arsenal is hard to replicate and valuable for those looking to build out a subscription video-on-demand service or ad-supported video-on-demand service, Hirsch said.

Splitting from the studio will allow Starz "to really focus on what we do and what we do well, and that's either become part of something bigger or actually get bigger very quickly," Hirsch said.

Relative to the timing of the deal, Lions Gate had originally pointed to it being announced by summer's end and completed by the close of the calendar year. But the company did not provide any updated specifics.

"We're not going to do a dumb deal on one or both sides of the business," said Burns.

Lions Gate completed the acquisition of Starz in a cash-and-stock transaction valued at about $4.4 billion in December 2016.