Lionsgate Posts Q2 Loss

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Reporting second-quarter revenues of $875.2 million, Lionsgate recorded a net loss for the period of $1.8 billion following a goodwill writedown related to STARZ and international restructuring charges.

The significant Q2 loss comes after the independent studio made a strategic decision to exit seven Lionsgate+ (formerly StarzPlay International) territories: France, Germany, Italy, Spain, Benelux, the Nordics and Japan. It took a $218.9 million restructuring charge in the quarter as a result of content impairment writedowns in the affected territories. There was also a $1.48 billion non-cash impairment charge related to goodwill from the STARZ acquisition.

“We reported another strong library performance and continued growth in Lionsgate Television series deliveries as our studio businesses continued to perform in line with expectations in the quarter,” said Lionsgate CEO Jon Feltheimer. “Economic and industry headwinds are having the greatest impact at STARZ, where we are exiting seven international territories. This will allow us to streamline STARZ’s international business and return it to profitability more quickly while continuing to build on the opportunities created by a strong STARZ original series slate and focused content strategy domestically.”

Revenue from Lionsgate’s 17,000-title film and television library was $747 million for the trailing 12 months. The company reported library revenue of $210 million in the quarter.

At the media networks segment, revenues slipped to $396.1 million as lower domestic linear revenue was offset by growth in U.S. streaming and Lionsgate+ revenues. Segment profit increased to $21.0 million. Total global subscribers increased to 37.8 million, including STARZPLAY Arabia. Global streaming subscribers increased 52 percent year-over-year to 27.3 million. LIONSGATE+ subscribers grew 97 percent year-over-year to 14.8 million (including Lionsgate Play in India and South Asia).

The studio segment, incorporating motion picture and TV production, reported revenues of $654.9 million, with a segment profit of $69.1 million. Film revenues fell to $224.0 million while TV production was up to $430.9 million.