Lionsgate Records $1.75 Billion Operating Loss on Starz Restructuring Costs

Lionsgate swung to an operating loss of $1.75 billion in its most recent fiscal quarter, which it attributed to restructuring charges around Starz and its international operations. The movie and television studio has upended its plans to sell a stake in Starz and has instead rebranded its streaming service as Lionsgate+, while exiting such foreign markets as France, Germany, Italy, Spain, Benelux, the Nordic regions and Japan.

Lionsgate also recorded revenue of $875.2 million, a drop of more than 1.4% from the $887.8 million that the company logged in the year-ago period. There was also a loss of $1.8 billion or 15 cents per-share. Both of those results were better than expected. Wall Street projected a loss of 18 cents per-share on revenue of $851 million for the film and television company. The company’s operating loss was $53.7 Million without the Starz write down.

Lionsgate has found itself in a difficult position in recent years — out-armed by the tech titans and conglomerates dominating the entertainment industry, but not bite-sized enough to sell itself to one of these players. It has made moves to alter the calculus. Lionsgate bought Starz in 2016 in a deal that was valued at $4.4 billion. The hope was that would give the company the scale it needed to compete. In 2021, the company announced that it was considering a sale or spinoff of Starz, the media network behind “Outlander” and “Power.” Along those lines, it has held talks with several companies, including Canal+, about selling a stake.

However, that strategy has shifted. In September, Lionsgate announced in regulatory filings that it planned to hold onto Starz and spin off its film and television studio. It also announced that it was rechristening Starzplay, its international streaming service, as Lionsgate+. 

On the TV side of its business, Lionsgate has fielded a hit, producing the CBS sitcom “Ghosts,” and also is behind “Welcome to Flatch” and “Home Economics.” It has been quieter on the film front, releasing “Clerks 3” and “The Good House” with Sigourney Weaver and Kevin Kline.

Lionsgate shares fell more than 2% in after-hours trading.

Read More About:

Source: Read Full Article