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Lionsgate Inks Deal with Hit Maker Relativity Media

27 Apr, 2009 By: Erik Gruenwedel

Bangkok Dangerous Nicolas Cage

The beleaguered theatrical division of Lionsgate April 27 received a lifeline when the Santa Monica, Calif.-based mini-major signed a new multiyear distribution deal with Relativity Media LLC.

Financial terms of the deal, which calls for up to five theatrical productions per year, were not disclosed.

Initial titles in the agreement include war drama Brothers with Tobey Maguire, Jake Gyllenhaal and Natalie Portman; supernatural thriller Season of the Witch with Nicolas Cage and action comedy The Spy Next Door with Jackie Chan.

Los Angeles-based Relativity has been a veritable cash cow theatrically, including producing five of the top 12 grossing movies in 2008. The company previously partnered with Lionsgate on critical and commercial hits The Forbidden Kingdom, 3:10 to Yuma and The Bank Job.

Relativity also owns Rogue Pictures, producers of budget horror fare such as The Unborn (Universal Studios Home Entertainment), The Last House on the Left and upcoming Fighting, starring Terrence Howard (Iron Man) and former Abercrombie & Fitch model Channing Tatum (Step Up).

Lionsgate CEO Jon Feltheimer singled out the theatrical unit as the primary culprit for the studio posting a $93.4 million loss in the most recent quarter.

“This will have a significant negative impact on our [pre-tax earnings] and free cash flow for the whole [fiscal] year,” Feltheimer told analysts in February.

Nonetheless, Lionsgate continues to excel in packaged media, including converting underachieving theatrical releases into strong retail performers.

Bangkok Dangerous is projected to gross $33 million in home entertainment revenue (215% of box office); Transporter 3 with $53 million (167% of box office); and Punisher: War Zone with $25 million home entertainment sales, or 312% of box office.

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