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HBO reups Lions Gate deal after a bid war

Deal attributed to 'Monster's Ball,' 'O' success

HBO has renewed its theatrical-output deal with Lions Gate Entertainment for two more years, through 2003.

Starz! and Showtime, HBO’s pay TV competitors, held talks with Lions Gate for the output, each putting up tentative bids. At least in part for defensive reasons, HBO decided to engineer the highest offer. Since the price of each movie gets tied to its ticket sales at the multiplexes, the parties couldn’t come up with what one source called a “meaningful license-fee estimate” of the contract’s value to Lions Gate.

Ira Bernstein, president of worldwide TV distribution for Lions Gate, attributed the HBO deal to the success of such 2001 releases as “Monster’s Ball,” which brought Halle Berry the actress Oscar, and “O,” as well as the promise of such forthcoming theatricals as “The Grey Zone,” with Harvey Keitel and Mira Sorvino, and “Confidence,” with Dustin Hoffman and Andy Garcia.

Buyers’ market

The sluggish marketplace for theatricals has strengthened the hand of the cable-network buyers, who have locked up long-term pay TV rights to the outputs of all of the majors. The down market kept Lions Gate from getting more than two years in the new deal instead of the seven-to-10-year contracts that the majors can command.

The Lions Gate deal covers all of the company’s theatrical releases in 2002 and 2003. For busted theatricals, Lions Gate has to enter into separate negotiations for the pay TV rights. HBO bought two recent busted theatricals from Lions Gate: “Liberty Stands Still,” with Wesley Snipes and Linda Fiorentino, and “Wise Girls,” with Mariah Carey.