August has turned out to be particularly sunny for Lionsgate, with back-to-back successes “The Last Exorcism” and “The Expendables” combining for $100 million at the box office.
“It’s been a very nice run for us amidst a summer of giant films,” noted Joe Drake, prexy of Lionsgate’s motion picture group. “We’ve had bold movies and bold campaigns that were very targeted and efficient, very much in keeping with our business model.”
Lionsgate’s strategies have been under attack this year by Carl Icahn, who’s in the midst of a hostile takeover attempt. Icahn was particularly critical of Lionsgate for the so-so returns from “Killers,” so the perfs by “Exorcism” and “Expendables” — both above expectations inside the studio and out — will provide Lionsgate with ammunition with which to defend its track record to its shareholders and Wall Street.
Lionsgate execs have said they are continuing to aim for 13-14 titles per year with an average risk of $13 million per pic and a tight control on costs. Studio has about 45 employees handling marketing, distribution and PR — far smaller than any of the six majors.
Both pics are acquisitions, though Lionsgate has no comment about the specific costs. It’s believed “The Expendables” cost the studio about $15 million for domestic rights and $3 million for U.K. rights; it snapped up “The Last Exorcism” for under $1 million in February.
Lionsgate’s marketing on “The Expendables” took particular advantage of the large and well-recognized cast, which helped generate a “something for everyone” appeal. That turned out to be key in expanding the audience well beyond the core demo of male action fans.
And “Exorcism” is only the latest in a long line of Lionsgate horror-thrillers, including “The Haunting in Connecticut,” the “Hostel” pics and seven “Saw” films. Drake recalled that when Lionsgate bought “Exorcism” in February, the marketing team told him that it already knew how to position the pic.
One recent tactic included placing a viral video of reactions to “Exorcism”-related content on the random video site Chat Roulette, which was viewed 2.5 million times on YouTube and other sites.
“This one is in our wheelhouse,” admitted Tim Palen, co-president of theatrical marketing. “And what we were trying to do was remind people that it’s fun to be scared.”
Lionsgate’s back-to-back victories at the domestic B.O. rep only the second time this summer that a studio’s managed that feat. Paramount did it in mid-May with “Iron Man 2” and “Shrek Forever After.”
With $82 million from three frames, “The Expendables” has a shot at becoming the top-grossing Lionsgate title ever if it surpasses Tyler Perry’s “Madea Goes to Jail” at $90 million. His “Why Did I Get Married Too” is Lionsgate’s second highest grosser this year at $60 million, followed by “Kick-Ass” at $48 million, “Killers” at $47 million and “Daybreakers” at $30 million.
In its earnings report three weeks ago, Liosngate nearly doubled its net loss to $77 million as it cited $29 million in costs related to its battle with Icahn and higher expenses from its movie slate., including “Killers,” “Kick-Ass” and “Why Did I Get Married Too.”
“Killers” had a $70 million pricetag, and company execs assert the exposure is about $40 million after tax credits and foreign pre-sales; Icahn has said Lionsgate needs to ditch higher-priced projects. For its part, Lionsgate’s questioned Icahn’s track record, asserted that his bid doesn’t fairly value the company (which has an extensive TV production component that includes “Mad Men” and “Weeds”) and pointed to such measures as per-employee revenues.
Icahn announced earlier this month that he was pushing back the deadline to Oct. 22 for Lionsgate shareholders to accept his hostile takeover offer: He wants to see how a lawsuit he filed against Lionsgate in Canada plays out; he’s challenging a debt-for-equity swap that Lionsgate executed to dilute his stake from 38% to 33.5%, effectively weakening his takeover prospects.