Lionsgate Shrinks Quarterly Loss Amid TV Revenue Rise

[ad_1]

Lionsgate has released its first quarterly financial results since completing a spinoff of its studio business into a separately traded stock.

The Hollywood studio posted a fourth quarter net loss attributable to shareholder at $39.5 million, compared to a year-earlier $96.8 million loss, on overall revenue rising to $1.117 billion, against a year-earlier 1.08 billion.

That beat a Wall Street analyst estimate of $1.11 billion in overall revenues by $7 million for the latest quarter. Lionsgate posted an earnings per-share loss of 22 cents, compared to a year-earlier per-share loss of 42 cents.

Starz, which continues to drive into the digital space, ended the fourth quarter with 19.35 million domestic subscribers on cable, satellite and streaming platforms, down from 19.73 million customers at the end of the third quarter of fiscal 2024, due to a decline in linear TV customers. The premium platform had 12.59 million streaming subscribers at the end of the fourth quarter, down from 12.63 million customers at the end of the third quarter.

And the Starz domestic linear subscriber count was 6.76 million for the fourth quarter, down from 7.1 million linear customers for the third quarter. Lionsgate also reported 27.54 million global Starz, Lionsgate+ and Starzplay Arabia customers at the end of the fourth quarter, just down from 27.9 million in the third quarter.

On May 14, Lionsgate Studios debuted as a standalone, publicly traded company, having been formed by combining Lionsgate’s studio business with Screaming Eagle Acquisition Corp. (SEAC), a special purpose acquisition company.

Lionsgate vice chairman Michael Burns on an after-market analyst call said the Hollywood studio was on track to complete a full separation of its studio and Starz businesses by the end of 2024. Burns added a committee of board directors was looking at combining the studios’ twin A and B share classes, to be potentially done along with the planned full separation of the studio and Starz divisions.

Burns added that, after the board committee figures out how to collapse the A and B shares, with a premium offered to class A shareholders, separate boards for the studio and Starz businesses will be established and Lionsgate investors will get to vote on the proposed full separation transaction.

“We all believe the sooner, the better. But we’re putting that outside target by the end of the year and have to follow all these different processes,” Burns said of the timeline for completing the full separation of Starz and the studio businesses, which includes securing regulatory and shareholder approvals.

Lionsgate emerged from the studio spinoff with a 87.2 percent stake in Lionsgate Studios and received $350 million in proceeds, while Screaming Eagle retains the remaining 12.8 percent stake. The fourth quarter results for fiscal 2024 combined those for parent Lionsgate and Lionsgate Studios, with its Motion Picture Group and Television Production Group segments.

During the fourth quarter, media networks revenue, which is mostly Starz Networks, came to $361.5 million, just down from a year-earlier $389 million, while motion picture group revenue was $410.6 million, compared to $532.1 million in the prior year period. The latest quarter saw Lionsgate drive box office revenues from the latest installments of The Hunger GamesJohn Wick and Saw franchises.

And television production revenue rose sharply to $496.3 million during the fourth quarter, against a year-earlier $291.5 million, as the TV business continued to recover after the dual Hollywood actors and writers strikes last year were settled with increased content deliveries.

On the TV front, Lionsgate CEO Jon Feltheimer during the analyst call pointed to ongoing turmoil in the sector after the Peak TV bubble burst. “Turning to television, we’re witnessing the most profound industry disruption in recent memory: shows being cancelled or ‘unrenewed,’ changes in buying patterns and buyer mix, the ad market abruptly transitioning from linear to digital, fewer network series pilots and the after-effects of the strikes changing the calculus of our business in ways that are continuing to unfold,” he argued.  

As a hedge against the TV industry contraction, Feltheimer pointed to his studio diversifying its creator base for Lionsgate originals, “with growing contributions from eOne, 3 Arts and our newly-restructured unscripted business all helping us to weather pressure on any single part of the business.” 

Lionsgate is also pursuing new business models that “draw upon our ability to create noisy brand-defining series like Seth Rogen’s half-hour comedy The Studio for Apple TV+, as well as cost-effective international acquisitions and co-productions like Son of a Critch and Population 11,” Feltheimer argued.

The studio is also leaning into new buyers like MGM+, AMC+, Disney+, FX and Amazon Prime, alongside longstanding acquirers like Apple TV+, Netflix, Hulu, Peacock and traditional networks. And Lionsgate was also directing new TV series to its Starz platform, including the Spartacus: House of Ashur series now shooting in New Zealand.

[ad_2]

Source link