Lionsgate outlines post-strike production plans and financial impact

Lionsgate executives, in an earnings call on Thursday, Nov 9, 2023, detailed the financial implications of the recently resolved SAG-AFTRA strike. The company’s CFO Jimmy Barge estimated the strike’s fiscal impact at approximately $30 million, primarily affecting the TV group in the September quarter. The entertainment company also projects an ongoing $15-$20 million hit due to increased production costs and delayed episodic delivery.

In the aftermath of the strike, Lionsgate announced the swift return of two network comedies, Extended Family and Ghosts. TV Chief Kevin Beggs outlined cost containment strategies to deal with series delays and cancellations resulting from the strike. The company also celebrated several successes including Starz greenlighting ‘Spartacus: House Of Ashur’, soaring motion picture sales, and increasing their majority stake in 3 Arts Entertainment.

CEO Jon Feltheimer expressed satisfaction at the resolution of the strike and looked forward to resuming content production for global audiences. Despite acknowledging the added costs due to enhanced contracts for writers and actors, Feltheimer remained optimistic about managing these expenses through prudent business decisions.

Motion picture chair Joe Drake revealed that they had secured several waivers and aligned their productions for an immediate restart post-strike. Some of the upcoming productions include Now You See Me 3, a Highlander reboot starring Henry Cavill, and Antione Fuqua’s Michael Jackson biopic scheduled to start in January.

Starz CEO Jeff Hirsch, along with Beggs, are developing a smart slate for Starz, demonstrating careful planning and cost control measures. The company’s post-strike production plans highlight its commitment to continuing its content creation while managing the financial challenges posed by the strike.

InvestingPro Insights

In line with Lionsgate’s recent financial performance, InvestingPro data reveals that the company’s market cap stands at 2130M USD. The company’s revenue for the last twelve months as of Q1 2024 was 3869.5M USD, showing a growth of 7.58%. Despite a challenging period, Lionsgate has seen a strong return over the last three months with a 26.15% increase in price total return.

InvestingPro Tips highlight a few areas to watch. The company operates with a significant debt burden and has seen a declining trend in earnings per share. However, revenue growth has been accelerating, which aligns with the company’s recent successes. Analysts predict that the company will be profitable this year, which could be a positive sign for potential investors.

For more detailed insights, InvestingPro offers a wealth of additional tips. It’s worth noting that these are just a few of the factors to consider when evaluating a company’s financial health and potential for growth.

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