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CNBC Transcript: CNBC Exclusive: CNBC’s David Faber Sits Down with Starz CEO Chris Albrecht on CNBC’s “Squawk on the Street” Today

WHEN: Today, Wednesday, September 16th

WHERE: CNBC's "Squawk on the Street"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Starz CEO Chris Albrecht on CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET) today. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000420063 and http://video.cnbc.com/gallery/?video=3000421428.

All references must be sourced to CNBC.

SIMON HOBBS: DAVID FABER CONTINUES TO PICK UP EXCLUSIVE INTERVIEWS THIS MORNING. HOT OFF THE HEELS OF MEG WHITMAN FROM HEWLETT-PACKARD IN THE FIRST HOUR OF THE SHOW, HE'S NOW MADE HIS WAY OVER TO THE COMMUNACOPIA CONFERENCE IN UPTOWN MANHATTAN WHERE THE MAJOR MEDIA CEOs ARE GATHERING TO DELIVER US A SECOND. HI, DAVID.

DAVID FABER: HI, SIMON. YEAH, UPTOWN FROM YOU, ALTHOUGH STILL DOWNTOWN. I'M HERE AS YOU SAID AT COMMUNACOPIA, GOLDMAN'S ANNUAL CONFERENCE MEDIA AND TELECOM. MY FIRST GUEST IS CHRIS ALBRECHT THE CEO OF STARZ. NICE TO SEE YOU.

CHRIS ALBRECHT: THANK YOU, DAVID. GOOD TO SEE YOU.

FABER: GOOD CHOICE ON YOUR SUIT, BY THE WAY.

ALBRECHT: YES, YOU GOT THE MEMO.

FABER: WELL DONE. STRANGELY, EACH TIME WE SPEAK, TWICE IN THE LAST YEAR, THERE ARE STORIES INVOLVING YOUR COMPANY AND CONSOLIDATION IN THE INDUSTRY IN WHICH YOU ARE APART. THE LATEST, A BLOOMBERG STORY YESTERDAY SAYING YOU'RE IN TALKS WITH AMC ABOUT GETTING TOGETHER. IS IT TRUE?

ALBRECHT: YOU KNOW, IF I HAD A DOLLAR FOR EVERY TIME THERE WAS A RUMOR ABOUT STARZ, YOU AND I COULD BOTH RETIRE. I MEAN, I THINK IT IS FAIR FOR PEOPLE WHO ASSUME THAT IN AN INDUSTRY WHERE PEOPLE ARE AS CLOSELY ALIGNED, WE ALL DO BUSINESS TOGETHER, THAT CONVERSATIONS ARE GOING ON ALL THE TIME. THAT BEING SAID, I'M NOT HERE TO ANNOUNCE ANYTHING TODAY. I DO THINK ALL THIS CHATTER DOES HIGHLIGHT THE FACT THAT THE PREMIUM BRANDS, STARZ BEING ONE OF THEM, ARE MORE VALUABLE THAN EVER BEFORE. MORE PEOPLE INTERESTED IN DISTRIBUTING US, MORE PEOPLE LOOKING TO INNOVATE THE WAY THAT TV GETS TO CONSUMERS. AND WE HAVE BEEN AN A LA CARTE PRODUCT SINCE OUR INCEPTION, WE ARE A SUBSCRIPTION MODEL. I THINK THOSE TWO THINGS TOGETHER ARE A REALLY GOOD STORY FOR STARZ.

FABER: YEAH, SOME WOULD SAY THOUGH THE TALK OF CONSOLIDATION IS ALSO ONE BECAUSE OF PERCEIVED WEAKNESS. THE IDEA BEING THAT AMC OR STARZ OR LIONSGATE, OR EVEN A DISCOVERY, A SCRIPPS, ALL OF THESE COMPANIES NEED TO START TO FIGURE OUT A WAY TO GET TOGETHER, TO EXERT MORE POWER WITH THE CARRIERS AND TO HAVE MORE OF A PRESENCE IN THIS CHANGING LANDSCAPE. DO YOU BELIEVE THAT?

ALBRECHT: YES, I DO THINK THAT THERE'S A GOOD BUSINESS RATIONALE FOR DIFFERENT COMPANIES COMING TOGETHER AND THAT'S THE BEGINNING OF ANY CONVERSATIONS AROUND A DEAL. I DON'T THINK THAT COMES OUT OF WEAKNESS, THOUGH. I THINK THAT COMES OUT OF LOOKING AND SAYING HERE'S MORE OPPORTUNITY. SO WE GO TO WORK EVERY DAY THINKING WE'RE A STANDALONE COMPANY. AT THE SAME TIME, WHEN YOU PUT TWO GOOD COMPANIES TOGETHER THAT HAVE COMPLIMENTARY AND SUPPLEMENTARY BUSINESSES AND HAVE GOOD MANAGEMENT TEAMS AND ARE BOTH EXECUTING WELL ON THEIR OWN, I THINK THAT'S AN OPPORTUNITY. SO THERE IS SOME RATIONALE FOR PEOPLE SPECULATING ABOUT THIS KIND OF STUFF, BUT THAT DOESN'T MEAN IT IS GOING TO HAPPEN. YOU KNOW THAT.

FABER: YEAH. WELL, IF IT DOESN'T HAPPEN, DO YOU THINK YOU'RE STILL WELL POSITIONED?

ALBRECHT: I THINK WE'RE BETTER POSITIONED THAN EVER BEFORE.

FABER: WHY?

ALBRECHT: I MEAN, IF YOU LOOK AT THE PREMIUM BRANDS – I DON'T THINK THERE'S A LOT OF CHANNELS OUT THERE THAT ARE MORE VALUABLE THAN THEY HAVE EVER BEEN. I MEAN, HBO 40 YEARS LATER, MORE VALUABLE THAN IT HAS EVER BEEN. SHOWTIME, NOT QUITE AS LONG, BUT MORE VALUABLE THAN IT HAS EVER BEEN. STARZ, WE HAVEN'T BEEN AROUND THAT LONG, BUT WE HAVE MORE OPPORTUNITIES THAN EVER BEFORE. I MEAN, THERE ARE MORE PEOPLE INTERESTED IN DISTRIBUTING OUR PRODUCTS THAN EVER BEFORE IN INNOVATIVE WAYS. WHETHER WE TAKE ADVANTAGE OF THOSE OPPORTUNITIES WILL BE DETERMINED BY WHERE WE SEE THE MOST INCREMENTAL VALUE CREATED –

FABER: WELL, HOW YOU GO ABOUT EVALUATING THAT? WHEN YOU ARE IN A POSITION WHERE YOU CONCEIVABLY COULD TICK OFF SOME OF THE CABLE PROVIDERS, OF WHOM YOU ARE A PART IF YOU GO WITH SOME OF THESE NEW OTT PLATFORMS, SO TOO SPEAK, AND SAY FORGET YOU, I'M GOING THERE. DOES IT RISK HURTING THE RELATIONSHIP THAT'S BEEN VERY KIND TO YOU OVER THESE YEARS?

ALBRECHT: YEAH. LOOK, I THINK THAT WE HAVE SAID TO THE OPERATORS, YOU NEED TO INNOVATE WITH US. THIS IS A REALLY HIGH MARGIN PRODUCT. LET'S ALL MAKE MORE MONEY TOGETHER.

FABER: BUT THEY HAVEN'T BEEN DOING THAT, THOUGH.

ALBRECHT: YOU'RE RIGHT. IF THEY TAKE A BUNKER MENTALITY, THEN I THINK WE HAVE THE OBLIGATION TO LOOK ELSEWHERE. BUT WE THINK THAT THE MVPDs ARE STILL THE BEST POSITIONED TO INNOVATE. BUT THAT'S THEIR BUSINESS. THAT BEING SAID, THERE ARE A LOT OF BIG COMPANIES THAT ARE INTERESTED IN DISTRIBUTING TELEVISION OVER THE INTERNET. SO THIS IS NOT THE END OF TELEVISION. THIS IS THE BEGINNING OF TELEVISION BEING DELIVERED IN NEW WAYS. THAT'S SOMETHING THAT WE'RE GOING TO HAVE TO CONSIDER MORE SERIOUSLY IF WE DON'T SEE THE KIND OF MOVEMENT THAT WE'VE BEEN LOOKING FOR WITH MVPDs.

FABER: ALL RIGHT. WELL, YOU'RE 32% VOTE HOLDER IS A GENTLEMAN NAMED JOHN MALONE, WHO HAS BEEN TALKING ABOUT THIS VERY THING, IMPLORING THE CABLE INDUSTRY TO COME ON, GET IT TOGETHER. EVEN SAYING THINGS LIKE THERE SHOULDN'T EVEN BE A NETFLIX. WE SHOULD HAVE FIGURED THIS OUT. WHEN YOU TALKED TO HIM, DOES HE SOUND LIKE HE IS GOING TO BE ABLE TO BRING ABOUT THE CHANGE HE WANTS? NOW OF COURSE, YOU HAVE CHARTER, A COMPANY HE'S VERY INVOLVED WITH, BUYING TIME WARNER CABLE?

ALBRECHT: LOOK, I THINK JOHN IS RIGHT IN SAYING THAT THE CABLE INDUSTRY, THE MVPD INDUSTRY, COULD OWN THIS SPACE IF THEY WOULD BE MORE AGGRESSIVE IN INNOVATING. HE'S A SHAREHOLDER, NOT AN OWNER OR HE'S NOT OPERATOR. SO WHAT HE HAS INFLUENCE, I DON'T NECESSARILY KNOW THAT HE'S GOING TO HAVE THE LAST WORD ABOUT THIS. BUT AS A SHAREHOLDER, I GET TO TALK TO HIM A LOT. AND I THINK HE AND I ARE ALIGNED IN WHAT WE SEE ARE THE OPPORTUNITIES AND THE POTENTIAL FOR STARZ. AND I THINK HE'S EXCITED ABOUT WHAT'S GOING ON.

FABER: BUT WHEN HE SEES A POTENTIAL FOR STARZ, DOES IT INVOLVE CONSOLIDATION? I THINK HE WAS QUOTED AT THE SUN VALLEY ALLEN & COMPANY CONFERENCE SAYING LIONSGATE WOULD MAKE SENSE. HE OWNS PART OF THAT, OBVIOUSLY AS WELL.

ALBRECHT: YEAH.

FABER: DOES THAT MAKE SENSE? I MEAN, IS HE PUSHING YOU TO FIGURE OUT A MERGER PARTNER?

ALBRECHT: I THINK WHAT JOHN SEES IS THAT THERE IS THE BIG MEDIA COMPANIES UP TOP AND THEN THERE ARE WHAT HE CALLS THE FREE RADICALS. YOU KNOW, COMPANIES LIKE STARZ, LIONSGATE, AMC, OTHER COMPANIES. JOHN, WHO IS A DEALMAKER, HE IS A VISIONARY, HE CAN SEE THE BENEFITS OF ALIGNING SOME OF THESE COMPANIES MORE CLOSELY. WHETHER THAT'S JV ON SOME BUSINESS OR WHETHER THAT IS A COMPLETE MERGER, YOU KNOW, THAT REMAINS TO BE SEEN. BUT I DO THINK THAT JOHN BELIEVES THAT PUTTING THESE COMPANIES TOGETHER COULD REALLY RESULT IN ENORMOUS VALUE CREATION.

FABER: SO WHY AREN'T YOU JUST MAKING IT HAPPEN?

ALBRECHT: WELL YOU KNOW, FIRST OF ALL, YOU SHOULDN'T ASSUME I'M NOT MAKING IT HAPPEN. BUT AT THE SAME TIME, LIKE I SAID, IT'S NOT SO EASY TO TRY TO PUT THESE THINGS TOGETHER.

FABER: WELL SOMETHING OF COURSE YOU HAVE MADE HAPPEN IN THE PAST IS CREATING HIT SHOWS. PEOPLE MAY FORGET WHEN YOU WERE IN HBO, THE INCREDIBLE RUN THERE, WHETHER IT WAS "THE WIRE," WHICH OF COURSE I THINK WAS THE GREATEST SHOW EVER CREATED, ALTHOUGH IT DIDN'T DO THAT WELL. "THE SOPRANOS," "SEX AND THE CITY." WHAT ABOUT NOW? I DON'T HEAR AS MUCH BUZZ ABOUT STARZ PROGRAMMING CHRIS, AS I DO PERHAPS ABOUT NETFLIX OR EVEN AMC.

ALBRECHT: YOU'RE JUST LIKE YOUR AFRICAN AMERICAN FRIENDS. YOU KNOW, WE HAVE A LOT OF – WE ARE DOING GREAT WITH A LOT OF SPECIFIC DEMOGRAPHIC GROUPS. WE HAVE DECIDED TO TARGET WHAT WE CONSIDER UNDERSERVED AUDIENCES. WE HAVE A HUGE AFRICAN-AMERICAN AUDIENCE FOR OUR SHOWS – POWER, SURVIVOR'S REMORSE AND THAT AUDIENCE IS EXPANDING OUT INTO HISPANICS. OUTLANDER, FLESH AND BONE, GIRLFRIEND EXPERIENCE – REALLY GOING TO BE APPEALING TO THE FEMALE DEMOGRAPHIC WHICH I BELIEVE IS UNDERSERVED IN THE PREMIUM SPACE. WE ANNOUNCED HAVANA QUARTET WITH ANTONIO BANDERAS, SET IN CUBA. OBVIOUSLY LOOKING TO GET A SECOND GENERATION HISPANIC AUDIENCE. FOR THE FAN BOYS OF ALL AGES, WE HAVE ASH VERSUS EVIL DEAD THAT IS PREMIERING ON HALLOWEEN WITH BRUCE CAMPBELL AND SAM RAIMI BRINGING BACK THAT FANTASTIC FRANCHISE.

FABER: SO YOU FEEL LIKE YOU HAVE THE SLATE YOU WANT?

ALBRECHT: YEAH. I MEAN, WE DON'T GO FOR PRESSURE STUFF. WE GO FOR STUFF THAT IS FUN, AND POPULAR, AND ENTERTAINING. PEOPLE SHOULD HAVE FUN DOING THIS, I MEAN, COME ON.

FABER: YEAH, ALRIGHT, BUT THEY'RE PAYING FOR IT, TOO, AND THEY WANT SOMETHING THAT IS GOING TO ENTERTAIN THEM AND THAT THEY ARE GOING TO BE ABLE TO WANT TO WATCH.

ALBRECHT: AND MORE PEOPLE THAN EVER BEFORE ARE PAYING FOR STARZ. WE'RE NOW THE SECOND MOST SUBSCRIBED TO PREMIUM CHANNEL. SO WE MUST BE DOING SOMETHING RIGHT.

FABER: YOU MUST BE DOING SOMETHING RIGHT. DOES IT TICK YOU OFF WHEN WE HEAR ABOUT NETFLIX SHOWS THAT WE NEVER ACTUALLY KNOW HOW MANY PEOPLE WATCHED THEM?

ALBRECHT: YOU KNOW WHAT, I DEFINITELY HAVE BUSINESS MODEL ENVY WITH THOSE GUYS. THOSE GUYS HAVE DONE A GREAT JOB AND THEY'RE FRIENDS OF MINE. BUT IT'S ABSOLUTELY AMAZING TO WATCH WHAT THEY GET AWAY WITH.

FABER: THEY DO GET AWAY WITH NOBODY REALLY KNOWING EXCEPT THEM HOW POPULAR A SHOW IS OR NOT. I MEAN, MARCO POLO, YOU PASS ON THAT I THINK AT ONE POINT.

ALBRECHT: YEAH.

FABER: THEY PAID A FORTUNE FOR IT. I DON'T KNOW.

ALBRECHT: I DON'T KNOW EITHER. MAYBE THEY DON'T KNOW.

FABER: MAYBE THEY DON'T KNOW. THEY SPENT AN ENORMOUS AMOUNT ON PROGRAMMING. THEY ARE, I MEAN, SO MUCH OF THE VALUE HAS GONE, IT WOULD SEEM, FROM THE TRADITIONAL PROVIDERS TO THEM AT THIS POINT, INCLUDING THEIR MARKET VALUE, WHICH IS ABOUT $50 BILLION. ARE THEY THE BIG KID ON THE BLOCK NOW, NETFLIX?

ALBRECHT: I THINK THEY'RE BEING VALUED LIKE A TECHNOLOGY COMPANY OR INTERNET COMPANY WHERE THE REST OF US ARE STILL BEING VALUED LIKE TRADITIONAL MEDIA COMPANIES. BUT I THINK WE HAVE SOME OF THE SAME OPPORTUNITIES. MAYBE NOT IN QUITE THE SAME WAY AS THOSE GUYS HAVE, AND I THINK NEW PEOPLE THAT ARE COMING INTO THE SPACE AND WANT TO DISTRIBUTE PRODUCTS LIKE STARZ ARE GOING TO HELP US – HELP NUDGE US IN THE DIRECTION OF EVALUATION THAT MORE CLOSELY RESEMBLES NETFLIX. BECAUSE THERE'S NOT A WHOLE LOT OF – YES, THEY HAVE THE DIRECT TO CONSUMER MODEL. BUT WE'RE A WELL FUNDED COMPANY. THERE'S A LOT OF PEOPLE THAT WANT TO PARTNER WITH US. JOHN MALONE IS, AS YOU SAID, THE BIGGEST SHAREHOLDER. YOU KNOW, IT'S NOT A BAD BET.

FABER: SO WHAT'S THIS WORLD GOING TO LOOK LIKE? I MEAN, WE ARE HERE AT THIS CONFERENCE, WE ARE GOING TO HEAR FROM ALL OF THESE GUYS – BY THE WAY, MOST OF WHOM THEIR STOCKS ARE JUST BEATEN TO HELL LATELY.

ALBRECHT: YEAH.

FABER: WHAT IS THIS WORLD GOING TO LOOK LIKE?

ALBRECHT: WELL, IT SHOULD PROBABLY LOOK A LOT LESS ABOUT BUYING BACK YOUR STOCK AND A LOT MORE ABOUT INVESTING IN YOUR BUSINESS AND GOING FORWARD AND FIGURING OUT HOW TO DRIVE VALUE. SO THAT'S WHAT I THINK ABOUT WHEN I GO TO WORK IN THE MORNING. AND IN ORDER TO DO THAT, YOU HAVE TO BE BOLD. AND I THINK THE MEDIA COMPANIES PROBABLY HAVEN'T BEEN AS BOLD AS THEY MIGHT HAVE BEEN AND MAYBE THIS CHANGE THAT PEOPLE ARE TALKING ABOUT IS GOING TO MAKE PEOPLE BE MORE BOLD.

FABER: DO YOU THINK TIME WARNER WAS BOLD AND SORT OF REALLY SERIOUS ABOUT OVER THE TOP FOR HBO?

ALBRECHT: I THINK THE TIMING WAS CURIOUS. IT WAS RIGHT AFTER OBVIOUSLY THEY WERE ABLE TO FEND OFF RUPERT. BUT I THINK HBO IS A GREAT PRODUCT, AND WHEN I WAS RUNNING IT IN 2005, WE STARTED THE PLANS TO GO OVER THE TOP IN BOTH A WHOLESALE AND A RETAIL MODEL. SO THE FACT THAT TEN YEARS LATER THEY'RE DOING IT, ISN'T A SURPRISE TO ME, AND WE'RE LOOKING AT SOME OF THE SAME THINGS. YOU KNOW, SHOWTIME IS DOING IT A LITTLE BIT DIFFERENTLY. BUT THERE MAY EVEN BE DIFFERENT WAYS TO DO IT.

FABER: AND THE NEXT TIME I SEE YOU IS JOSH SAPAN GOING TO BE SITTING OVER HERE AND AM I GOING TO BE INTERVIEWING THE TWO OF YOU?

ALBRECHT: ONLY IF HE IS WEARING A BLUE PLAID SUIT.

FABER: ALRIGHT, WE WILL LEAVE IT THERE.

ALBRECHT: IT IS GOOD TO SEE YOU, DAVID.

FABER: YOU TOO. CHRIS ALBRECHT OF COURSE, CEO OF STARZ.

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