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Lionsgate Laying Off Staff, Ends Codeblack Films Partnership

Layoffs have hit Lionsgate.

The studio behind “The Hunger Games” and “Saw” is pink-slipping staff in its motion picture group this week. At the same time, Lionsgate is also moving to end its partnership with Codeblack Films, a division that makes films geared toward African-American audiences. Codeblack’s credits include the Kevin Hart stand-up special “Let Me Explain” and “All Eyez on Me,” the Tupac Shakur biopic. All told, 26 jobs will be lost, according to an insider. Some of the cuts will come in Lionsgate’s New York office, which is losing theatrical marketing and publicity jobs. Four Codeblack employees were let go after the partnership was severed. The company’s head count now stands at 1,600.

“We are constantly looking at ways to better align our company with our industry’s evolving landscape and therefore the needs of the audience and our customers,” Joe Drake, Lionsgate’s motion picture group chairman, wrote in a note to staff. “We couldn’t be more thrilled about what 2019 has in store for us as a company, our exciting upcoming film slate, the new leadership team, as well as the agility that has always been a cornerstone of the company, allowing us to implement new ideas quickly and efficiently.”

The spin here is that jobs are being centralized in Lionsgate’s Santa Monica headquarters. But the layoffs will fuel speculation that Lionsgate is slimming down as it hopes to sell itself. It also comes in the wake of several box office failures, including the costly and little-seen reboot “Robin Hood,” as well as the studio’s buddy comedy “The Spy Who Dumped Me,” which also failed to ignite with audiences. At one point, Lionsgate was in talks to merge with Hasbro in 2017, but negotiations collapsed over price. At the time, Hasbro was reportedly interested in paying $40 a share for Lionsgate. The company’s stock opened Friday at $18.17.

Codeblack Films will continue to operate autonomously under its CEO Jeff Clanagan.

“Codeblack has brought us tremendous films and relationships,” a spokesperson for Lionsgate said. “Though the terms of our current partnership are ending, we expect to continue our great relationship with Jeff Clanagan and his team.”

Drake was brought on board to oversee the film division in October 2017. He previously served as Lionsgate’s co-COO and motion picture group president for five years before going off to found the production company Good Universe in 2012.

Lionsgate is in a difficult position. Media consolidation has left the studio punching up against much bigger rivals, such as WarnerMedia, a new division of telephone giant AT&T, and Disney, which is wrapping up its $72 billion purchase of much of 21st Century Fox’s film and television assets. The company has tried to grow bigger, acquiring the cable company Starz in 2016 for approximately $4.4 billion, but it is still a fraction of the size of its competition. Its film business has also struggled to find franchises to replace “The Hunger Games” and “Twilight” after those young adult series wrapped up their wildly successful runs at the box office.

Upcoming Lionsgate releases include a reboot of “Hellboy,” “John Wick 3,” and “Knives Out,” a murder mystery with Daniel Craig.

Correction: An earlier version of this article incorrectly stated that Codeblack Films was being shuttered. It will continue to operate separate and apart from Lionsgate.

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