Lionsgate CEO: Future of Starz Remains ‘Highest Priority’ for Business
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Lionsgate Chief Executive Officer Jon Feltheimer offered a bullish outlook and pledged to seek an improved Wall Street profile for the company — which has seen its stock lose about half its value over the past year.
Feltheimer spoke Tuesday at Lionsgate’s annual shareholders meeting in Vancouver and touted improved performances in film, television, talent management, theme parks and streaming. Shares took a hit in late August after a report said Comcast had informed the company it planned to drop its premium-cable Starz network, home to “Power” and “Outlander.” The current pact has three and a half months to run.
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“At Starz, we continued the rapid growth of our domestic over-the-top business while expanding internationally into nearly 50 countries ahead of schedule, all while growing our overall subscriber base by 1.5 million in the year,” he said. “But all of these changes bring with them the need to better communicate to the Street the value creation I’ve just outlined as well as how we intend to better unlock that value. That will be our highest priority in the coming months.”
Shares of Lionsgate closed at $22.43 a year ago. The issue, which has recovered somewhat since late August, closed at $11.01 on Tuesday prior to Feltheimer’s remarks.
Starz was the subject of buyout speculation this spring with CBS rumored to have made a $5 billion offer that was spurned. Starz was acquired by Lionsgate in 2016 for $4.4 billion.
Feltheimer said Tuesday that Starz has enabled Lionsgate to become a major player in the subscription business with over 27 million subscribers. He said Lionsgate’s investment in 3 Arts Entertainment led to collaboration on three shows that have been picked up to series and sales of another 10 shows to various networks and that the company expects a total of 25 million visitors to its theme park properties by the end of next year. The company also recently announced plans for a $100 million production facility in Yonkers, N.Y.
He also noted that several Lionsgate movie titles (“Angel Has Fallen” and “Scary Stories to Tell in the Dark”) have over-performed and that buzz was building for Rian Johnson’s “Knives Out” and Jay Roach’s “Bombshell.”
“To recap, we had a year in which we continued to invest in our newer businesses while re-energizing our core content businesses, accelerated Starz’s transformation into a major player in the global streaming wars and still generated strong earnings and robust free cash flow,” he said.
“It was a year in which we achieved success by creating business models for every kind of platform, found our own places to compete and win, and continued to occupy a unique and special place as a supplier of premium content to women, African-American, Latinx and LGBTQ audiences who have been historically under-served and under-appreciated.”
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