Lionsgate Narrows Q2 Loss Slightly9 Nov, 2011 By: Erik Gruenwedel
A 15% increase in home entertainment revenue not enough to offset poor theatrical performance
Lionsgate Nov. 9 reported a second-quarter (ended Sept. 30) net loss of $24.6 million, which was a 17% improvement over a net loss of $29.7 million during the previous-year period. The loss again was due to the Santa Monica, Calif.-based mini-major’s underperforming theatrical slate.
Culprits in the quarter included poor box office results for The Devil’s Double, Conan the Barbarian and Abduction — all released in the period. The titles underperformed compared with previous-year release The Expendables, Lionsgate’s top grossing movie in 2010.
Other than Tyler Perry movies, Lionsgate has struggled to find a winning theatrical franchise capable of filling the void left following the final “Saw” release last year. Indeed, the studio has high hopes for The Hunger Games — the first theatrical release based on a series of popular young adult books to be released March 23, 2012. The movie stars Oscar-nominated Jennifer Lawrence (Winter’s Bone), among others. Lionsgate also is releasing a sequel to The Expendables, currently filming in Europe and reportedly co-starring John Travolta, Chuck Norris and Arnold Schwarzenegger, in addition to lead star and producer Sylvester Stallone.
Home entertainment revenue from both motion pictures and television programming was $175 million in the quarter, a 15% increase from the prior year’s second quarter as the mini-major’s syndication of the first four seasons of “Mad Men” on Netflix more than offset the timing of theatrical titles on the home entertainment release slate.
Home entertainment releases of television production reached a record $54.6 million, driven by electronic media revenue from the syndication of “Mad Men” and the distribution of “Hell’s Kitchen” as well as revenue from the release of Weeds: Season 6 on DVD. International television revenue increased 51% from the prior year’s second quarter, led by deliveries of “Mad Men” (seasons one, two, three and four) and “Weeds” (seasons six and seven).
Revenue from Lionsgate’s digital business, which includes transactional video-on-demand, increased 123% to a record $65 million.
“Although we were disappointed by the performance of our films in the quarter, we were pleased with the strong and growing contributions of all of our other core businesses,” Lionsgate co-chairman and CEO Jon Feltheimer saidin a statement. “We believe that our film performance will improve significantly and become more consistent as we release some of the potential franchise films on our upcoming slate, and our television and digital businesses and Epix channel partnership will continue their strong and profitable growth trajectory.”
Lionsgate management will discuss the quarter’s results in a call with analysts Nov. 10.