Where others see a looming apocalypse, Jon Feltheimer sees opportunity.
The Lionsgate CEO argued to investors Friday that the studio behind “Orange Is the New Black” and “The Hunger Games” will thrive whether or not the cable business shrinks.
“We believe that the disruption in the marketplace will play to our strengths,” Feltheimer said during an earnings call.
He went on to add that “whether there’s a fat bundle, skinny bundle or no bundle at all…we are well positioned to beat this challenge.”
Feltheimer’s words came as the media sector has been pummeled this week amid concerns that the pay-TV business is starting to unravel with audiences migrating to digital services like Netflix. Shares of media conglomerates like Viacom, Time Warner, Disney, and 21st Century Fox have all taken a beating, despite relatively healthy quarterly earnings results. Lionsgate has been no exception, dropping by more than $3 at one point in the week.
The company’s stock has begun to regain some of the value it lost. It was trading up 5.4% at $37.25 at 10:20 shortly after the earnings call wrapped up.
The hourlong call covered a lot of ground, ranging from Lionsgate’s hopes that films like the “Robin Hood: Origins” and the fantasy adventure “Gods of Egypt” will spur new franchises to replace “The Hunger Games,” to Feltheimer’s hopes that “Mad Men” star Jon Hamm will finally win an Emmy. Awards prognostications aside, it was the Lionsgate’s chief’s push back against skeptics of the health of the media sector that resonated the loudest.
Feltheimer and his executive team said they had confidence that their slate of films and television shows will continue to be profitable, and noted that they work both with traditional cable and broadcast channels and digital powerhouses like Netflix, the home of “Orange Is the New Black.”
Lionsgate TV Group chairman Kevin Beggs said his colleagues were out talking to distributors so often that his offices were frequently empty. The number of new buyers for programming is increasing demand, he argued.
“We’re all out pitching,” he said, adding, “Our biggest challenge is simply finding enough time in the day to get those meetings on the books.”
Feltheimer and Beggs said the company had become adroit at scaling budgets up or down depending on the platform where they will show.
“We’ve figured out ways to play both in production and distribution with just about everybody,” said Feltheimer, labeling it, a “robust environment.”
There’s been much speculation that Lionsgate could find itself absorbed into John Malone’s network of companies after the Liberty Media head swapped stock in his Starz cable channel for a stake in Lionsgate and a seat on its board. Feltheimer didn’t address that possibility beyond saying, “We think it is a very, very valuable relationship, and we hope we can take advantage of it.”
Lionsgate’s leadership hinted it may be more buyer than seller in the current media landscape, particularly given that the market is so bearish on the sector.
“When prices come down, the assets become more interesting, particularly if they’re accretive,” said Lionsgate vice chairman Michael Burns, adding, “We’re paying attention here.”