Lionsgate Releases Financial Data As Step Toward Spinning Off Studio

Jon Feltheimer
Jon Feltheimer (Image credit: Lionsgate)

Lionsgate said it released financial forecasts for its media and studio businesses as it prepares to separate the company by spinning off the studio.

“We are committed to separating our media networks and studio business,” CEO Jon Feltheimer said on the company’s second-quarter earnings call Thursday.

Feltheimer said the forecasts were prepared as part of the strategic and financial discussions the company was having concerning the spinoff and other potential transactions.

Also Read: Lionsgate Takes Big Charges Resulting in Q2 Loss

Lionsgate expects that its studio business will have operating income before depreciation and amortization of between $325 million and $375 million in 2023 and between $420 million and $470 million in 2024.

Lionsgate expects its media business to have OIBDA of between $100 million and $120 million in 2023 and between $175 million and $225 million in 2024.

As a combined company, Lionsgate would have eliminations–reductions in earrings because of the way transactions between two parts of a company are reported–of as much as $450 million in 2024. 

Also Read: Lionsgate Says Starz Sale Should Be Announced in September ... and Could Expand to Broader Studio

The company said those eliminations contribute to both parts of the company being undervalued.

Felthemer noted that the company’s television studio has been able to “successfully operate as both a content arms dealer and a streamer.”

The television group is one of the world’s leading independent suppliers of premium scripted series to third-party vendors, pointing to the success of Ghosts on CBS and Paramount Plus and to The Continental, the John Wick TV origin story, which was licensed to NBCUniversal’s Peacock in the U.S. and now has been licenced to Amazon Prime Vidoe internationally.

At the same time, the TV studio is able to support Starz’ growth with a pipeline of 15 shows. The way Starz windows its programming also allows the company to license and bifurcate the rights to Starz show enables the company to maximize its returns.

“Having a bespoke partner in Starz has allowed us to scale to over 100 shows across our scripted and unscripted business,” Feltheimer said.

At a time when linear TV is losing subscribers, Starz has been transitioning into a digital streaming model. Feltheimer said that digital streaming now accounts for 71% of Starz subscribers and 62% of its revenues.

 “The platform has remained profitable throughout this transition, he said, adding that with the substantial viewership attracted by shows including P-Valley, Raising Kanan and The Serpent Queen, “we are well position to be part of every conversation as the business evolves into a bundled direct-to-consumer world.” ■

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.