Lionsgate’s Road to Strategic Revitalization

Last week, Lionsgate announced a change in its movie division leadership: Adam Fogelson will succeed Joe Drake as the chairman of movies.

Over the next few months, Drake and Fogelson will work closely for a seamless handover of responsibilities. Fogelson is currently vice chair of the Motion Picture Group, overseeing the worldwide marketing and theatrical distribution. Lionsgate, a studio once known as a “mini major”, had a good year with recent releases from the John Wick, Saw, and Hunger Games franchises.

CEO Jon Feltheimer has expressed dissatisfaction with the studio’s struggle to develop new franchises, that could attract potential acquirers. Recent attempts like Chaos Walking and Borderlands have been unsuccessful. Notably, Borderlands, an expensive adaptation of a video game directed by Eli Roth and starring Cate Blanchett and Kevin Hart, encountered significant issues. Despite completing filming in 2021, its release has been delayed, with a premiere now set for August, a lengthy four years after its initial approval.

It’s a particularly interesting time for Lionsgate. After trying various strategies to increase stock value, merge, and/or sell the company, Feltheimer has chosen a SPAC deal (a Special Purpose Acquisition Company which is formed strictly to raise capital through an IPO for the purpose of acquiring an existing company) with industry veterans Harry Sloan, Jeff Sagansky, and Eli Baker, making Lionsgate much more appealing to potential buyers. Its film and TV studios will go public under a new entity named Lionsgate Studios, potentially leaving behind the Starz TV channel and streamer. If everything goes according to plan, Lionsgate Studios will be acquired by a tech or entertainment company looking to expand.

The fact that Lionsgate is smaller compared to other studios makes it more attractive to a potential buyer. Additionally, it possesses a robust library of 20,000 titles that include the Twilight and Hunger Games films, and having recently acquired Hasbro, they now have eOne library, that includes Grey’s Anatomy, among others.

A potential buyer of a “new” Lionsgate wouldn’t have to deal with managing declining cable TV activities or a smaller-scale streaming service. These elements have been spun off, allowing Lionsgate to focus primarily on content production, rather than on revenues from broadcasting rights or advertising.

Sources: The Hollywood Reporter, Deadline