John Malone on Possibility of Lionsgate Merger, End of ‘Hunger Games’

Liberty Media Chairman John Malone praised Lionsgate’s deep library and inventive leadership at his first shareholders meeting in Toronto on Tuesday.

“The nice thing about these guys is they’re not stuck in a rut,” Malone told Variety, saying he decided to invest in the studio because of the “quality of the management.”

Last February, Lionsgate and Malone’s Starz cable network engaged in a stock swap that granted the billionaire a 3.43% stake in Lionsgate and a seat on its board. Because Malone is known as one of the foremost media consolidators, having recently orchestrated a pact to marry Time Warner Cable with his Charter Communications, investors and analysts wonder if his investment could end in an eventual merger. On Tuesday, Malone said he was still in the “get to know you phase” in his relationship with Lionsgate.

Asked if he was worried about Lionsgate’s future given that “The Hunger Games” franchise is coming to a close this November with the release of “Mockingjay – Part 2,” Malone said the studio was well fortified to withstand the end of the multi-billion film series.

“The theatrical side will always be volatile, but there’s a deep library,” he said.

He went on to note that traditional studios and television providers are in a state of flux, while praising Lionsgate’s ability to bob and weave with the times.

“Everybody’s competing with Netflix on a global basis,” said Malone. “There’s a huge appetite for content. The whole media industry is in a transitional period because of the technological changes and these guys are in the best place where you can be. They’re flexible. They have a great balance sheet. They’re inventive and they’ve got their fingers in a ton of pies.”

During the meeting, Lionsgate CEO Jon Feltheimer outlined some of the new areas that the studio is branching into beyond film and television.

Hailing “exciting new ways to deliver our content,” he noted that Lionsgate was backing a live “Hunger Games” stage show, a theme park ride and an exhibition tied to the film. He also discussed investments in gaming companies like Telltale Games, Next Games and Mobcrush, as well as upcoming mobile games based on films like “The Expendables” and a virtual reality project tied to “John Wick.”

“Despite a volatile industry environment and the accelerating pace of disruptive change, I believe that the opportunities for Lionsgate today are greater than ever,” said Feltheimer.

The CEO hit back at reports that there are too many television shows competing for too few spaces, by noting that all of the company’s current programs, a group that includes “Orange Is the New Black” and “Nashville,” have been renewed.

“If we stick to our knitting of high quality, mostly scripted entertainment, we’ll be fine,” he said.

Much of the recent handwringing over the state of the television business was sparked by remarks made by FX chief John Landgraf during the recent Television Critics Association event, in which he bemoaned the glut of content brought about by the fact that the number of scripted programs will exceed 400 this year.

“There is simply too much television,” he said.

Malone wasn’t the only shareholder getting a great deal of attention at the Tuesday meeting. Owen Da Rosa, a 10-year-old investor attending his first meeting, received multiple shoutouts from Feltheimer during his remarks.

Asked why he chose to buy Lionsgate’s stock, Da Rosa gave an answer that would make a seasoned media investor proud.

“I really do enjoy their movies,” Da Rosa told Variety. “I know they’re putting them on other platforms.”

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