What happened

Shares of Lions Gate Entertainment (NYSE:LGF.A) (NYSE:LGF.B) rose sharply in December. According to data from S&P Global Market Intelligence, the studio's Class A shares gained 14%, while its Class B shares notched an improvement of 14.5%. The gains hinged on an expanded content-licensing deal with Comcast (NASDAQ:CMCSA) subsidiary NBCUniversal.

So what

NBCUniversal renewed its existing licensing agreement with Lions Gate's premium cable network Starz. On top of a simple extension of the older deal's terms, original Starz content will also be available for subscribers to NBC's upcoming Peacock video streaming service. Finally, Lions Gate's international streaming platform known as Starzplay will also get access to some of NBCUniversal's media catalog, and American audiences will be able to consume that content on the Starz network.

Several businesspeople meet and greet in a room dominated by dozens of TV screens.

Image source: Getty Images.

Now what

Comcast's shares hardly moved on the news because it was just one relatively small content contract in NBCUniversal's massive media empire. For Lions Gate, on the other hand, the cross-licensing of content on each company's streaming video services could be a game changer. Starz doesn't have many content partnerships, and none that can match NBC's sheer scale.

That being said, Lions Gate could use a few wins of this caliber. The company's earnings reports have been hit-and-miss in recent quarters, and the two stocks fell roughly 33% each in 2019.