Lionsgate has eyes on Miramax library
Says it will not overpay for the indie film archiveTORONTO -- Lionsgate on Wednesday veered between coyness and expressed interest in Disney's Miramax unit, but said it will not overpay for the indie film archive.
During a morning analyst call, the Vancouver-based mini-studio also remained tight-lipped about whether Metro-Goldwyn-Mayer is also in its cross-hairs.
"On Miramax, we're certainly not known to overpay," Lionsgate vice-chairman Michael Burns said in answer to a query about possible interest in Miramax, which has a rumored $700 million price tag.
Lionsgate CEO Jon Feltheimer earlier in the call told analysts any potential transaction for his company will need to be immediately accretive to earnings and add "value" to existing operating companies by helping reduce costs through synergies.
Feltheimer also hinted Lionsgate would not purchase the Miramax library, only to sell some titles back to the Weinstein brothers, another possible bidder for the Disney unit.
"We would never look at a library deal like that if we thought we were going to sell a whole lot of titles to one of our competitors," he said a day after Lionsgate released its latest financial results where it narrowed its third quarter loss on higher overall revenue (HR, Feb. 9).
Despite Lionsgate's continuing effort to grow its TV and distribution channel businesses to diversify away from theatrical film, talk of movies still dominated the analyst call.
Feltheimer predicted that, after cutting back on its movie releases in the current year, Lionsgate planned a more "muscular and diversified" film slate for fiscal 2011 as fewer players and less product competed for a larger theatrical revenue pie.
The mini-studio predicted just over $500 million in local boxoffice for a planned 14 theatrical releases next year, or an average $36 million take per-picture.
In terms of distribution and marketing costs, Lionsgate projects P&A costs of $165 million in the current financial year, and still higher P&A in fiscal 2011 as it goes to 14 pictures and faces minimum marketing costs from its service deal with Relativity Media.
Feltheimer was also bullish about the cable distribution prospects for Epix, the premium TV channel Lionsgate is launching with Viacom and MGM after so far investing $51 million of its own money in the joint venture.
"We are adding distribution partners large and small, with more to follow," he told analysts.