Lilly Stuecklen

 

Lions Gate Entertainment

2700 Colorado Ave Ste 200

Santa Monica, CA 90404

http://www.lionsgate.com/

 

Corporate Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company Overview

While the “Big 6” film studios have reigned for decades at the top of the box office, one “mini major” is quickly working its way into their usual territory, Lionsgate Films.  Formed in 1997, Lionsgate stayed mostly under the radar as a producer of independent and niche films such as “American Psycho” and Tyler Perry’s “Madea” films until 2012. This was the year of Lionsgate, where it released “The Hunger Games” and acquired Summit Entertainment, the studio behind the “Twilight” franchise.  Since 2012, Lionsgate has mingled at the top of the studio market share with the Big 6, being the youngest and smallest studio (550 employees vs. Warner’s 10,000), to gross over $1 billion in a year. [1]

 

In addition to being Hollywood’s youngest film powerhouse, Lionsgate also operates its own television group. Its shows, such as “Orange is the New Black”, “The Royals”, and “Nashville”, currently dominate the digital, cable, and broadcast platforms. Their television library now contains 30 shows spanning 20 different networks that have brought in nearly 30 Primetime Emmy wins for this on-the-rise company. [5]

 

RIGHT HERE, RIGHT NOW

Financially, Lionsgate’s television and film units continue to grow exponentially.  Their production revenue from TV increased to $580 million, up 30% from 2014.  Television revenue is only expected to increase as all current shows in production have already been renewed for new seasons, and one, “Nashville”, has just been sold into syndication whilst still in production. [7]

So far in 2015, Lionsgate ranks 7th among all studios for the market share of the film industry, and has stayed within the top seven for the past 3 years [3].  This steady success comes mainly thanks to their film franchises, which include the “Hunger Games”, “Twilight”, and “Divergent” series.  Together they’ve raked in over $10 billion at the global box office, and this number continues to rise as the final “Hunger Games” installment turns into its third week in theatres. [7]

While still a blockbuster, the final installment of the series “Hunger Games: Mockingjay – Part 2” performed under expectations for its opening weekend.  The $101 million opening fell roughly $19 million short of expectations, and is the lowest of the four-film series [8].  In response to this, shares have dropped from a three-month high of $42.50 to $34.25 [6].   Despite the slight under-performance, “Mockingjay – Part 2” still held on to first-place for a second week through the Thanksgiving weekend, beating out “The Good Dinosaur” and “Creed” on their opening weekends. [9]

Lionsgate, however, is confident that a slight dip in shares will not affect them in the long term. Media mogul and billionaire John Malone recently upped his ante in the studio, becoming its second largest shareholder.  With this purchase comes the buzz that Malone’s company, Liberty Media (in charge of the Starz channel), may potentially attempt a merger with Lionsgate down the line.  As the end of the breadwinning The Hunger Games film series draws near, the studio has been putting more eggs in the television basket than the film one, and Malone wants to capitalize on this.  At the beginning of November, Lionsgate dropped $200 million for a controlling stake in Pilgrim Studios, a producer of several successful reality TV shows including “Ghost Hunters“.  With this purchase and the potential to shift Lionsgate’s in-house produced shows to Starz, the likelihood that Malone is at Lionsgate to stay is high. [10]

While the initial Hunger Games series may be coming to an end, Lionsgate is looking forward to an extremely long tail for the franchise.  Spin-offs films, a theatrical experience, and theme parks are all potential new ways to keep the world of Panem alive and churning out profit.  Following in the successful footsteps of Warner Bros., who licenses its characters to existing parks and developers instead of running their own (like Disney and Universal do), Lionsgate has plans for parks in Georgia and China.  Meanwhile, a Lionsgate-themed area is already under construction at Motiongate, a soon-to-open park in Dubai that also has the rights to DreamWorks and Sony titles.  In addition to utilizing the Hunger Games brand for “location-based entertainment”, “Step Up” dance shows and “Divergent” and “Now You See Me” attractions are in talks as well, all a part of the Lionsgate library. [11]

While the long tail of The Hunger Games will continue to profit Lionsgate for years to come, their primary income is in their theatrical film releases.  “Gods of Egypt“, planned for a February 26 release, is a fantasy epic concerning the lore of ancient Egypt.  Recently though, the film has gotten a backlash of negative press due to a predominantly white casting.  Posters released this month featuring lead actors such as Gerard Butler and Geoffrey Rush drew anger from celebrities and consumers alike, claiming it was both wrong and in bad taste, especially among all the recent racial unrest, to cast a film taking place in Egypt with mostly Caucasian people.  Both Lionsgate and the director of the film, Alex Proyas, issued apologies immediately. [13]

Aside from the rough patch concerning “Gods of Egypt”, Lionsgate is as optimistic as ever in their endeavors.  Approximately 12 films are slated for a 2016 release, including “The Divergent Series: Allegiant” and “Now You See Me 2” [12].  The Divergent series, based on a series of dystopian young adult novels and also featuring a strong female lead similar to “The Hunger Games”, hasn’t been the monstrous success that its predecessor has (the second film had a $130.2 million domestic box office gross vs. the second Hunger Game’s $424.7 million).  Yet still, the series is Lionsgate’s lone remaining sure-fire breadwinner once “Mockingjay – Part 2” runs its course in theatres. [14]

In the case of “Now You See Me” in 2013, the original film had no built-in book audience to profit off of, and was a surprise hit for the studio, grossing $117 million domestically against a budget of $75 million.  A sequel was immediately greenlit and “Now You See Me 2” is due to be released next summer.  “Harry Potter” star Daniel Radcliffe has joined the cast, and his starpower combined with the returning Jesse Eisenberg, Dave Franco, and Woody Harrelson is expected to bring in promising receipts. [15]

Lionsgate is a true underdog.  Where much of its competition is celebrating centennials, Lionsgate isn’t even old enough to have a drink at the bar.  2015 was a monumental year as their television properties escalated and their signature Hunger Games series came to an end.  2016 is promising and the Lionsgate name is sure to grace the headlines several times in the coming year.

 

Sources

[1]

Hollywood Has A New Star Studio With A Different Approach to the Film Business. Retrieved November 29, 2015. http://www.businessinsider.com/lionsgate-fighting-the-system-2014-1

[2]

Company Website. Retrieved November 29, 2015.http://www.lionsgate.com/

[3]

Lionsgate Film’s Yearly Box Office Standing. Retrieved November 29, 2015. http://www.boxofficemojo.com/studio/?view=company&view2=yearly&yr=2015&p=.htm

[4]

Film’s Gross Ranking. Retrieved November 29, 2015. http://www.boxofficemojo.com/studio/chart/?view2=ytd&view=company&studio=lions_gate.htm

[5]

Lionsgate Television Website. Retrieved November 29, 2015.https://www.lionsgate.com/tv/

[6]

Company Financial Profile. Retrieved November 29, 2015.://www.marketwatch.com/investing/stock/lgf

[7]

Fiscal Year 2015 Financial Report. Retrieved November 29, 2015. ://www.lionsgate.com/uploads/assets/2015%20Annual%20Report.pdf

[8]

Lang, Brett. Hunger Games: Mockingjay – Part 2 Box Office Predictions Lowered. Retrieved November 29, 2015.://variety.com/2015/film/news/hunger-games-mockingjay-part-2-box-office-predictions-lowered-1201646692/

[9]

Bahr, Lindsey. Hunger Games Beats Good Dinosaur. Retrieved November 29, 2015.http://finance.yahoo.com/news/hunger-games-beats-good-dinosaur-174719447.html

[10]

Lang, Brett. As Hunger Games Ends, John Malone and Lionsgate Grow Closer. Retrieved November 29, 2015. http://variety.com/2015/film/news/hunger-games-lionsgate-john-malone-1201643503/

[11]

Barnes, Brooks. Lionsgate Seeks to Build on Its Library of Film Properties With Theme Parks. Retrieved November 30, 2015. http://www.nytimes.com/2015/11/02/business/media/lionsgate-seeks-to-build-on-its-library-of-film-properties-with-theme-parks.html?_r=0

[12]

 Lionsgate Upcoming Releases. Retrieved November 30, 2015. http://www.the-numbers.com/market/distributor/Lionsgate

[13]

Shea, Christopher. Gods of Egypt Casting. Retrieved November 30, 2015. http://artsbeat.blogs.nytimes.com/2015/11/30/gods-of-egypt-casting-prompts-apologies-from-director-and-lionsgate/?_r=0

[14]

Ryan, Patrick. Post-Hunger Hollywood. Retrieved November 30, 2015. http://www.usatoday.com/story/life/movies/2015/11/23/young-adult-film-franchises-hunger-games-divergent-maze-runner/75705482/

[15]

McMahon, Tim. Now You See Me 2 Trailer. Retrieved November 30, 2015. http://www.themovienetwork.com/article/1st-now-you-see-me-2-trailer-promises-more-mind-bending-magical-tricks