Lionsgate Posts Q3 Loss with Starz Merger Costs

SANTA MONICA/VANCOUVER: Lionsgate recorded a $31 million quarterly loss, with costs stemming from its acquisition and integration of Starz.

Revenue for the quarter ended December 31 was $752 million, up 12 percent from the prior-year quarter driven by solid gains in television production and the acquisition of Starz.

Segment profits at motion pictures were up 55 percent, as reductions in direct operating expenses and distribution and marketing costs more than offset the decline in revenue from the prior-year quarter. Revenues of $440 million were down 13 percent, despite strong box-office performances from Tyler Perry’s Boo! A Madea Halloween and Hacksaw Ridge, compared to a prior-year quarter that included The Hunger Games: Mockingjay Part 2. Lionsgate’s wide release of the blockbuster La La Land, which has grossed over $270 million to date at the worldwide box office, occurred after the close of the December 31 quarter.

Television production segment profits soared 117 percent, with strong revenue and lower distribution and marketing costs. Revenues increased 39 percent to $229 million, the second highest total ever, driven primarily by an increase in TV deliveries, including episodes of Orange Is the New Black, the new series Dear White People and the three-hour musical event Dirty Dancing.

Media networks delivered revenues of $85 million and segment profit of $33 million, representing segment profit margins of 39 percent. There are no comparable results, as the acquisition of Starz took effect on December 8, 2016.

“We’re pleased to report increased profits across our film, television and media networks divisions as well as another strong revenue performance from our Television Group,” said Lionsgate’s CEO, Jon Feltheimer. “We’ve just completed one of our busiest and most productive quarters ever as we continue to scale our global content platform and integrate Starz into our operations. Our strong film and television offerings are now complemented by our Starz premium network that is becoming a ‘must-have’ value proposition for the digital age.”