×
You will be redirected back to your article in seconds

Lionsgate’s done deal surprises observers

Analysis: Elaborate negotiations with Summit notable for lack of drama

Lionsgate buys Summit for $412.5 million | Wall Street mulls deal’s benefits

Lionsgate’s $412.5 million deal to buy Summit Entertainment, announced Friday, arrived with a notable lack of fireworks.

“There was never really much drama in this negotiation,” noted James Berk, CEO of Summit investor Participant Media. “It really unfolded in a pretty orderly fashion. I think that’s kind of unique.”

When the deal announcement came a few minutes after the close of markets Friday afternoon, the one real surprise to many was that the transaction wasn’t a tentative agreement but a complex completed transaction — financed as a leveraged buyout that cashes out Summit’s investors with a stake of about 5% in the amplified Lionsgate.

Summit’s ownership — which includes top Summit execs, Nala Investments and Suhail Rizvi’s Rizvi Traverse Management — had been considering early last year a move into TV production as a way to diversify operations from the core businesses of film production and foreign sales in order to take advantage of the success of the “Twilight” franchise. Toppers Rob Friedman and Patrick Wachsberger told Variety last February that the first moves would take place in the following months.

“We were looking into the funds it would have taken to expand,” Berk noted. “At the same time, Summit became very attractive as a potential acquisition so these conversations started with multiple parties.”

Besides monetizing the investment of the Summit owners, Berk said, the Lionsgate deal offers the benefits of being able to take better advantage of the “Twilight” and “Hunger Games” franchises, long-term stability, monetization of the Summit library and the firepower to compete effectively with the big six studios.

“This really is the right deal at the right time,” he added.

Berk also expects the deal to benefit Participant, which is already halfway through a five-year output deal with Summit and looking to ramp up feature production and move into TV production. The eight-year-old company — focused on areas such as the environment, healthcare, human rights, institutional responsibility, peace and tolerance — has backed “Syriana,” “Inconvenient Truth,” “Charlie Wilson’s War,” “Contagion” and “The Help.”

Berk admitted that he’s cognizant of there being one less buyer in Hollywood.

“On the one hand, it is frustrating to lose a player in the feature film market,” Berk told Variety following the announcement. “But if the company executes, there’s plenty of capacity for its product.”

Popular on Variety

More Film

  • The Antenna

    Toronto Film Review: 'The Antenna'

    Jump scares, creepy noises and the tease of hidden-from-view dangers are all fine. But a truly frightening horror film unsettles with more than its crafts, but instead through the vulnerability of defenseless people stuck with bad options only. First-time writer-director Orçun Behram’s highly stylized and mildly disturbing “The Antenna,” a metaphor on Turkey’s current ruling [...]

  • Ad Astra Box Office

    Box Office Battle: 'Ad Astra' Takes on 'Rambo: Last Blood' and 'Downton Abbey'

    “Hustlers” and “Good Boys” proved that even in the age of Marvel dominance and remake mania, movies that don’t exist within an established franchise can still be box office draws. Can “Ad Astra” continue that trend? The space drama — starring Brad Pitt and directed by James Gray — arrives on the big screen this [...]

  • Harvey Weinstein Accuser Lucia Evans Breaks

    Harvey Weinstein Accuser Lucia Evans Breaks Silence After D.A. Dropped Charge

    Lucia Evans gave a wrenching account on Tuesday of her efforts to hold Harvey Weinstein responsible for sexual assault, saying she felt betrayed after the Manhattan D.A.’s office dropped her allegations last year. Evans spoke to Variety after giving a speech at a conference on influencer fraud in Manhattan, making her first public comments on [...]

  • Ad Astra

    How 'Ad Astra' Production Crew Created Authentic Look for Brad Pitt Space Drama

    In “Ad Astra,” Brad Pitt’s astronaut Roy McBride crosses the solar system to find and confront his long-lost father, requiring the movie crew to create an authentic-looking future that conveys the theme of traveling long distances to learn the lesson that it’s where you started from that has the most value. “Visually, the aim was [...]

  • Nahnatchka Khan'Always Be My Maybe' film

    'Fresh Off the Boat' Creator Nahnatchka Khan Signs First-Look Deal With Netflix

    Netflix has signed “Fresh Off the Boat” creator and executive producer Nahnatchka Khan to an exclusive multi-year first look deal for feature films. Khan made her feature film directorial debut with “Always Be My Maybe” starring Ali Wong and Randall Park. The romantic comedy premiered on Netflix in May and was seen by 32 million [...]

  • The Mover

    Latvia, Kyrgyzstan, Montenegro, Costa Rica Announce Oscar Contenders

    Latvia, Kyrgyzstan, Montenegro and Costa Rica are the latest countries to announce their entries for the newly rebranded International Feature Film award at the 92nd Academy Awards. All four countries are seeking their first Oscar nomination in what was formerly known as the foreign-language film category. Latvia has selected Holocaust drama “The Mover” (pictured) as [...]

  • The Sky Is Pink

    Toronto Film Review: 'The Sky is Pink'

    Shonali Bose’s much-laureled 2014 “Margarita with a Straw” was a film whose presentation of a cerebral palsy-afflicted heroine sidestepped all the usual hand-wringing inspirational clichés of disability portrayal, making her story all the more enlightening and affecting. It is particularly disappointing, then, that the director’s followup should approach another tale of genetic infirmity with all [...]

More From Our Brands

Access exclusive content