Lionsgate Vice Chair Talks Charlie Sheen Show, Netflix, Summit Deal, 'Hunger Games'
NEW YORK - Lionsgate vice chairman Michael Burns didn't get tempted to show his cards on a potential acquisition of Summit Entertainment, but he did discuss Charlie Sheen, Netflix, Groupon, Carl Icahn and Hunger Games here on Wednesday.
Asked about Lionsgate's TV show deal with Sheen for Anger Management, Burns told the UBS Global Media and Communications Conference that his firm is "well aware of [Sheen's] issues with Warner Bros." But he said he has known Sheen "for a long, long time," and Lionsgate felt it was key to team him with the right showrunner. "Our goal is to keep Charlie working, keep him healthy," Burns said. He emphasized that Lionsgate's TV business continues to be a key growth driver and that 100 episodes of a show like Sheens could be produced within a couple of years.
Asked about the latest deal talk about Lionsgate potentially acquiring Summit, Burns said he wouldn't discuss specific potential deals, but emphasized that "any deal would have to be accretive," and that Lionsgate does not want to issue a lot of equity and take on debt. "Over the next year or two, we are looking to delever, not lever up," he said. Providing some trivia related to a potential deal, he pointed out that Summit is "located next door to us."
More broadly, he predicted that consolidation in the studio world would continue. "We built our business on consolidation," he emphasized, mentioning such past deals as one for Artisan. But Burns also said that "library assets are harder and harder to find" these days as "there aren't a lot of independent libraries out there." Overall, he said "there will be consolidation - it's the natural thing to happen."
Asked about Netflix, Burns said he recently bought Netflix stock without detailing how much. The company "has a tremendous first mover advantage," he argued. "The subscriber base he has is a tremendous advantage."
Everybody makes mistakes, he said about the firm's recent missteps, but highlighted that CEO Reed Hastings also sits on the boards of Microsoft and Facebook. "There is more opportunities for all those companies to work together," Burns said.
He also mentioned that Lionsgate is developing for Netflix Orange Is The New Black, arguing that it could be a milestone project just like Mad Men was for AMC.
Discussing Icahn, who Lionsgate bought out after the activist shareholder had looked to acquire the firm with what Burns called an offer that undervalued the company, he said: "We could just not come to any agreement on what his vision was." He also called the Icahn showdown "a long, arduous expensive battle that we are happy to have behind us." Burns later also said that Lionsgate wouldn't have had to sell part of its stake in the TV Guide Network if not for Icahn.
Burns on Wednesday also said that Lionsgate expects to do another promotion with Groupon after a much-discussed promo for The Lincoln Lawyer. The film ended up doing close to $60 million in box office. "I think we'll do another Groupon deal in the future," he said. "We like the idea."
He also reiterated that the studio is working on a sequel to Lincoln Lawyer - which he had mentioned on CNBC a day earlier - and is working on a broadcast show based on the franchise for ABC. Asked if Lionsgate will push into TV broadcast opportunities more broadly, he said: "We're not going to be in the big deficit finance model."
Burns at the UBS gathering also touted the outlook for Hunger Games, which he said is trending well in terms of buzz and is looking "spectacular," and Expendables 2, which he quipped is shooting in Bulgaria, because "that's how cheap we are." He also said it was "great" that such additional action talent as Chuck Norris was in the sequel. He also mentioned Warrior, saying that Lionsgate was "trying to get some award considerations" for the picture that caused it a loss.
Burns also mentioned Lionsgate's Starz drama Boss, which he said he hopes would become the firm's next Mad Men and "could have a long life" if it gets a shot.
Asked about the film business, Burns said his company continues to take a portfolio approach to it and makes money on about 70 percent of its releases. Importantly, films are "feeding all other businesses," including premium TV joint venture Epix. The venture with Viacom and MGM is already profitable even without carriage deals with Comcast, Time Warner Cable and DirecTV, which Burns said he expects will over time strike deals with Epix.
Discussing the TV landscape in the digital age, Burns said Microsoft's XBox is these days a quasi pay TV operator with its increased video offerings, and YouTube will emerge as an even stronger online video player with its original content channel rollouts.