Lionsgate reports loss amid steady growth for Starz

Lionsgate has revealed less than satisfying year-end results, reporting a net loss of $284m for the fiscal year ended 31 March despite the steady growth of Starz. 

The studio reported full-year revenues of $3.68bn and an operating income of $130m – down from $4.13bn in revenues and $248m in operating income for the period last year.

Adjusted net income attributable to Lionsgate shareholders is $191m, or adjusted diluted EPS of $0.87, and adjusted OIBDA is $520m for fiscal 2019.

Lionsgate posted fourth-quarter revenues of $914m, along with an operating loss of $34m. Net loss attributable to Lionsgate shareholders for the quarter is $155m or $0.72 diluted net loss per share, while adjusted diluted EPS is $0.11 and adjusted OIBDA is $103m.

Television production revenues decreased by 11% to $921m in the year due to the “timing of certain titles”, according to the studio. Segment profits decreased by 41% to $66m.

On the film side, the motion picture segment revenues took an even greater hit, dipping 20% to $1.46bn in the year due to a smaller film slate. Segment profits decreased by 28% to $129m.

One bright spot in the studio’s results, however, is its Media Networks segment, which grew by 4% to $1.46bn due to strong OTT subscriber growth of 4m.

The segment highlight is the performance of cable channel Starz, which Lionsgate acquired in late 2016.

The channel reported 24.7m overall domestic subscribers in the quarter — down 400,000 sequentially, but up 1.2m year-on-year.

Lionsgate’s results come amid growing speculation around a potential Starz takeover bid by CBS.

Studio boss Jon Feltheimer said the business will not address M&A speculation, but added that “Our responsibility is to our shareholders, so we always have to listen to opportunities to create in any way shareholder value. But we’re outlining a plan today and that’s all we’re going to execute on.”

The exec went on to outline expansion plans for Starz, which will receive continued investment so that it can turn a profit by 2023.

Feltheimer added that the Starzplay channel will expand to 51 countries by July.

Further, Starzplay is now available to customers across Europe and Latin America including the UK, France, Germany, Spain, Mexico, Argentina, Chile, and Colombia as an Apple TV channel in the Apple TV app.

The Apple TV compatibility allows international customers the opportunity to watch Starz originals on Starzplay day-and-date with the US.

“We believe that the international market is a $45bn opportunity for us that will result in between 15m and 25m new Starzplay international subscribers by 2025,” Feltheimer told analysts in an earning call.

“The pace of our expansion has been accelerated by successful international launches on Apple and Amazon Prime. Our premium content offering, platform capabilities and speed to market make us a launch partner of choice to the other streaming giants as well.”

The exec noted that Lionsgate is investing aggressively in an original programming slate for Starz and “widening the creative aperture to ensure that we supply the Starz platform with programming that is right for its global footprint.

“In the past two months alone we’ve greenlit [or] fast-tracked to production five new Starz original series, many of which we’ll be telling you about on our next call.”