'Orange Is the New Black' Renewal Among Highlights for Lionsgate TV Division5 Feb, 2016 By: Erik Gruenwedel
Lionsgate CEO Jon Feltheimer hails TV unit as Wall Street hammers company’s stock on theatrical underperformance
On the heels of a disappointing box office performance that has Lionsgate shares down more than 30% in midday trading, CEO Jon Feltheimer Feb. 5 called out Lionsgate’s TV group's continued growth, including successfully navigating “a long and complex negotiation” with Netflix regarding the renewal of "Orange Is the New Black" for three more seasons, extending the critically acclaimed women’s prison series to at least a seventh season.
“‘Orange’ will be a major driver of our television slate for years to come,” Feltheimer said on the company's fiscal call. He also announced that a reboot of TV series “MacGyver” is in the works for CBS, which includes a theatrical component for Lionsgate.
Separately, six-part HBO miniseries American Lion, starring Sean Penn as Andrew Jackson, begins production in June, among other series productions, underscoring the mini-major’s burgeoning slate of scripted and unscripted shows across 40 networks.
Yet, despite grossing $650 million at the global box office, the $280.8 million domestic performance of The Hunger Games: Mockingjay — Part 2 fell well short of management’s expectations (i.e. $100 million below profit margin). Feltheimer said the film’s foreign box office was also negatively affected by the terrorist attack in Paris and a disappointing performance in China.
“We are currently tracking below our [2016 fiscal-year box office] guidance range of $1.1 billion to $1.2 billion in adjusted [pre-tax earnings],” Feltheimer said. “We intend to wait for the next [fiscal] call to provide more visibility.”
Regardless, Lionsgate is releasing 17 theatrical titles this year, compared with 13 in 2015, driven in part by the return of the venerable Tyler Perry with Boo! A Madea Halloween; Now You See Me 2; John Wick 2 with Keanu Reeves; and Texas gulf oil platform actioner Deepwater Horizon with Mark Wahlberg; in addition to a new slate of horror films.
“Given the continued strong growth of our television and ancillary businesses, and mix and timing of our film releases in fiscal 2017, there’s a clear path back to the [pre-tax earnings] seen in recent years,” Feltheimer said.
Indeed, when asked about the company's renewed interest in acquiring pay-TV platform Starz, the CEO reiterated the virtues of controlling distribution to a changing consumer. In addtion to ownership stakes in subscription streaming services Tribecca Shortlist and Comic-Con SVOD, the studio soon will announce "very unique talent" for a new over-the-top video service.
"Owning or partly owning platforms [pay-TV, premium channels and OTT video] gives you a tremendous amount of opportunity, leverage and optionality in the marketplace," he said. "The world is changing very quickly and I think the subscription space is a great place to play."