Shareholders meet held in Toronto during fest
The promise of digital dollars has arrived with “The Hunger Games,” Lionsgate CEO Jon Feltheimer told shareholders, adding that the mini-major is doubling down on young-adult projects and forecasting a $1 billion domestic theatrical gross this year — which would make Lionsgate the first non-major ever to hit that milestone.
During Lionsgate’s annual meeting Tuesday, Feltheimer also announced a raft of upcoming foreign-territory output deals and said strong box office has lifted its home entertainment business to new heights.
“‘The Hunger Games’ home entertainment launch last month was the best in Lionsgate’s history,” Feltheimer said. “DVD sales have met or surpassed our expectations and, when you see the final ‘Hunger Games’ digital numbers, you’ll realize that the significant monetization of the digital platforms we’ve been talking about for the past two years has finally arrived.”
Lionsgate’s 2012 films have led the domestic weekend B.O. eight times — more than the pics of any other studio — and Feltheimer predicted that it will top $1 billion in domestic gross by year’s end. In 2003, before New Line merged to become part of Warner Bros., the studio grossed $931 million domestic (thanks to “Lord of the Rings” movies playing in the same calendar year), the closest any non-major has ever come to reaching that number.
The November release of “The Twilight Saga: Breaking Dawn — Part 2” will be key to hitting the milestone.
“By acquiring Summit Entertainment and launching ‘The Hunger Games,’ fiscal 2012 became a transformative year for Lionsgate that set in place the key elements for translating our content leadership into long-term profitability,” Feltheimer said.
The meeting was the first since Lionsgate acquired Summit for $412.5 million in a leveraged buyout in January, creating a significant challenger to the six Hollywood majors. Annual confab is traditionally held at the Toronto Film Fest, where Lionsgate’s acquisitions team was busy, nabbing “Imogene” and “Thanks for Sharing.”
Feltheimer also touted Lionsgate’s TV biz, noting that FX picked up an additional 90 episodes of the Charlie Sheen sitcom “Anger Management” following an initial 10-episode run over the summer, and asserted that the skein has joined “Mad Men” and “Weeds” as strong Lionsgate TV brands.
“We’re excited about the next wave as well — ‘Orange Is the New Black’ for Netflix, ‘Nashville’ for ABC, ‘Next Caller’ for NBC and a number of new reality shows which we will be announcing shortly,” he said.
Feltheimer told shareholders that Lionsgate will soon announce greenlights for one or two more young-adult franchises, indicating it intends to leverage its experience with “Twilight” and “Hunger Games” to become the industry’s premiere YA imprint. Though he did not say what those new titles would be, Feltheimer has listed several such properties in the past. During a May 31 earnings call with analysts he mentioned projects in development based on Veronica Roth’s “Divergent” series, Erin Morgenstern’s “The Night Circus” and Patrick Ness’ “Chaos Walking” trilogy.
In addition, Summit has been developing a “Highlander” reboot since 2008 and last fall attached Juan Carlos Fresnadillo to direct.
Feltheimer also announced a new output deal with Alliance’s Spanish distribution company, Aurum. He said similar deals will be unveiled in the next few weeks for Australia, Germany, Latin America, Russia, Poland and Korea and noted that the value of the Lionsgate library has been positively impacted by renewal of the distribution agreement with Studiocanal in May, as well as a recent distribution deal with A+E Networks for thousands of library titles and hit shows from their A&E, Lifetime and History Channels.
Feltheimer said Lionsgate has paid down more than $200 million of the $500 million Summit term loan and recently called $23.5 million of convertible subordinated notes.
“We are already achieving significant and tangible benefits from our content leadership, with more on the way,” he said.
Lionsgate stock hit an all-time high close Friday of $15.81 and closed at $15.49 on Tuesday, a year after it reached an accord with Carl Icahn, who sold his 33% stake at $7 a share in a series of deals totaling about $309 million.