Starz shines and content footprint grows but Lionsgate posts mixed quarter

Starz shines and content footprint grows but Lionsgate posts mixed quarter
Joseph O'Halloran
| 10 August 2018

Its content generation for film, TV and over-the-top may be spreading, indeed at full throttle claims the company, but Lionsgate has revealed an up and down first quarter of the year that has seen losses despite and yearly decreases in revenue.

lionsgate 10august2018For the quarter ended 30 June 2018, the company reported revenue of $932.7 million and net loss attributable to Lionsgate shareholders of $7.9 million. These compared with Q1 2017 revenues of just over $1 billion and a profit of $173.8 million respectively. Adjusted net income attributable to Lionsgate shareholders at the end of the first quarter of 2018 was $40.5 million and adjusted OIBDA was $116.9 million.

During the quarter, the company changed the components of its television production and media networks segments in order to report the results attributed to all of the company's TV production business in a single segment and to enable the media networks segment to more clearly reflect the results of the company's network distribution business. Given this, media networks segment revenues increased by 3% compared with to $354.9 million due to what Lionsgate called ‘solid’ OTT revenue growth. Lionsgate noted that segment profits were essentially flat from the prior year quarter due to costs associated with the international rollout of the key Starz content business and what it conceded was a ‘moderate’ increase in US marketing spend.

In the home territory, subscribers increased 300,000 sequentially in the quarter, reaching 23.8 million, with growth in both the traditional multichannel video programming distributor (MVPD) sector and among OTT subscribers.

Television production segment revenues increased by 7% on an annual basis to $279.4 million in the quarter as gains in US licence fees and international revenue offset the comparison to a prior year quarter that included a digital media licensing agreement for the Starz original series Power. However, segment profits tumbled 64% to $15.6 million in the fiscal quarter.

Undimmed by the mixed bag revealed by the first quarter results, Lionsgate chief executive officer Jon Feltheimer commented: “We're pleased to report a strong quarter with continued robust free cash flow and solid contributions from all of our businesses. Our global content machine is operating at full throttle, and we continue to invest in a programming and international rollout strategy at Starz that is working. Our initiatives in the quarter continued to strengthen Lionsgate's stature as a unique and essential part of the media ecosystem.”

And part of these initiatives is a multi-year, multi-platform film and television first-look deal with Andrew and Jon Erwin and producing partner Kevin Downes, the filmmaking team behind this year's box office hit I Can Only Imagine, which was released by Lionsgate and sister company Roadside Attractions. The Erwin Brothers and Downes will develop, produce and direct feature films and TV programming under their newly-created faith-based Kingdom banner.
Lionsgate also announced that it has entered agreements to launch STARZPLAY branded channels in France, Italy and Spain in addition to the previous launches in the UK and Germany.