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Income Taxes
 3 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The income tax provision for the three months ended June 30, 2025 is calculated by estimating the Company’s annual effective tax rate (estimated annual tax provision divided by estimated annual income before income taxes), and then applying the effective tax rate to income (loss) before income taxes for the period, plus or minus the tax effects of items that relate discretely to the period, if any. For the three months ended June 30, 2024, income taxes have been calculated as if the Starz Business files income tax returns on a standalone basis. The Starz Business’s U.S. operations and certain of its non-U.S. operations historically have been included in the income tax returns of Lionsgate or its subsidiaries that may not be part of the Starz Business.
The Company’s income tax provision differs from the federal statutory income tax rate applied to income (loss) before taxes due to the mix of earnings generated across the various jurisdictions in which operations are conducted. The Company’s income tax provision for the three months ended June 30, 2025 and 2024 were impacted by changes in the valuation allowances against certain U.S. and foreign deferred tax assets, certain minimum taxes and foreign withholding taxes. The Company’s income tax provision for the three months ended June 30, 2024 benefited from the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations. The Company’s income tax provision for the three months ended June 30, 2024 was also impacted by additional deferred tax expense as a result of the Studio Separation that occurred during the quarter ended June 30, 2024.
The Company’s income tax provision can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictions in which the Company operates, changes in tax laws and regulations in those jurisdictions, changes in uncertain tax positions, changes in valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA makes permanent key element of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation, current expensing of domestic research and development costs, and the use of EBITDA as a measure of computing the business interest expense deduction limitation. Accounting Standards Codification 740 requires the effects of changes in tax rates and deferred tax balances due to tax legislation to be reflected in the period in which the legislation is enacted. Consequently, during the three months ended September 30, 2025, the Company will evaluate the impact of the OBBBA on deferred tax balances, and the results of such evaluation will be reflected in the Company’s Form 10-Q for the quarter ended September 30, 2025.