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Lionsgate vice chairman Michael Burns told an industry audience Wednesday that pay TV networks’ appetite for content produced by outside companies is growing, with between three and eight bidders for every show concept the movie and TV studio creates.
Lionsgate has been a player in the TV production arena for years – it has created such hits as Weeds, Mad Men and Nurse Jackie – but kicked its participation up a notch with the purchase of Pilgrim Studios last year. Pilgrim, a major player in the reality TV space, helped drive record television revenue in fiscal 2016.
At the Sanford Bernstein Strategic Decisions conference in New York, Burns said networks like FX and AMC as well as subscription video on demand pioneer Netflix all compete for the studio’s TV output, according to moderator and Bernstein media analyst Todd Juenger’s client note on the session.
Unlike some other publicly traded participants in the conference, which is closed to the press, Lionsgate did not stream its presentation. But Juenger did provide a wrap up of the day’s talks in a note to clients issued Thursday morning.
Expanded rights are becoming an increasingly important part of negotiations, Burns said, according to Juenger’s note. He added that in negotiating rights for The Royals with Comcast’s NBC Universal unit, Lionsgate was able to exchange some limited ownership in the series in exchange for Super Bowl promotion spots. And streaming players like Netflix are increasingly asking for global rights.
But Burns said Lionsgate doesn’t totally give up the ghost – it almost always retains some syndication rights in TV negotiations, consistent with its movie studio model.
“We are not in the work-for-hire business,” Burns said, according to Juenger’s note. “I can’t think of an example where we don’t have some rights.”
As an example, he said oftentimes Lionsgate will give buyers like Netflix the right of first negotiation for future windows.
Burns also touched on potential acquisitions, adding that any deals would be done with its shareholders’ best interests in mind.
Lionsgate publicly stated its intention to start merger talks with premium channel Starz in February, but delayed those discussions as its stock declined in the wake of poor box office performance at its movie studio. Burns said Lionsgate is still interested in doing deals – cable legend John Malone owns a 4.5% stake in the company, as well as an interest in Starz. Burns said Malone’s past comments about consolidation in the content industry still hold true.
"Malone is right about free radicals. They will be part of something bigger," Burns said, according to Juenger’s note. "If we do a deal down the road, it will be our shareholder's decision."
Asked if Lionsgate will get bigger, Burns added "Malone didn't do this to own 4.5% of LGF."
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