Lionsgate to Distribute HIT’s Home-Video Product in North America

SANTA MONICA/LONDON, March
24: Lionsgate has acquired home-entertainment distribution rights to HIT
Entertainment's portfolio of children’s programming for the U.S and Canada.

This deal places
Lionsgate, already a leader in the DVD market in North America, as the
third-largest home-video distributor of non-theatrical titles in the family
entertainment genre.

Under the terms of the
agreement, Lionsgate obtains the exclusive marketing, sales and distribution
rights to HIT's franchises including Thomas & Friends, Bob The Builder, Barney, Angelina Ballerina
and Fireman Sam; newly acquired brands such as Fifi & The Flowertots and Roary The Racing Car from Chapman Entertainment; Aardman Animations'
award-winning Wallace & Gromit,
which includes four half-hour episodes, and Shaun The Sheep; as well as The Jim Henson Company's Fraggle
Rock and additional family titles
from the Henson library.

Lionsgate is scheduled to
begin distributing HIT's full slate of home-entertainment releases in May 2008.
Thomas And The Great Discovery,
the brand's first feature-length direct-to-DVD movie since 2005, featuring
Pierce Brosnan as the narrator, will be one of the first titles released in
September 2008.

“The HIT library will be one
of the most treasured jewels in our family entertainment crown," said
Lionsgate’s president and co-COO, Steve Beeks. “With the opportunity to combine
such evergreen worldwide brands as Barney, Thomas & Friends and Bob The Builder with our existing properties, including Marvel, Doodlebops, Bratz and Clifford, this agreement propels us into the top three
family entertainment distributors in North America for non-theatrical product.
It also underscores our longstanding commitment to highly recognizable, branded
properties in the family entertainment space, encompassing a diverse portfolio
of legendary franchises and cutting edge new properties. This deal exemplifies
Lionsgate's strategy of patient, disciplined growth.”

“We are thrilled to work
with Lionsgate, whose existing family home-entertainment operations have
already generated more than 9 percent North American market share, to bring
HIT's high-quality, trusted properties to families through home
entertainment," said HIT Entertainment’s chief financial officer, Jim
Weight. "We look forward to a partnership that builds on the massive
popularity of franchises such as Thomas, Bob The Builder and Barney, while introducing a rich and diverse portfolio of
new properties to the next generation of family audiences."

Lionsgate and HIT noted
that, anticipating the emerging digital marketplace, the agreement encompasses
electronic sell-through to the HIT-owned titles as well as DVD distribution
rights. Lionsgate currently has a non-theatrical family home-entertainment
market share of approximately 9 percent. With the new partnership with HIT,
this non-theatrical family home-entertainment market share is expected to grow
to approximately 15 percent.

—By Anna Carugati