Marketing costs Lionsgate

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High theatrical marketing costs continue to take their toll on the bottom line at Lionsgate as the Canadian producer posted a sharply higher second-quarter loss.

Vancouver-based Lionsgate on Friday reported a loss of $56.2 million for the three months ending Sept. 30, compared with a drop of $14.4 million in 2006.

Second-quarter revenue reached a record $343.5 million compared with a year-earlier $218.1 million. But Lionsgate bled red ink after spending $122.5 million on theatrical marketing during the latest quarter to promote its film slate.

It was the same story in August, when Lionsgate posted a first-quarter loss of $53.1 million, compared with a loss of $3.6 million in 2006, again because of an increase in theatrical marketing expenses.

"This was a very strong quarter for all of our businesses, most notably our theatrical business, whose positive contributions will be more fully reflected in future quarters," Lionsgate CEO Jon Feltheimer said in a statement ahead of an analyst call today.

Total expenses for Lionsgate during the latest quarter came to $398.3 million, compared with a year-earlier $230.3 million.

Overall motion picture revenue was $234.4 million. Theatrical revenue contributed $42.4 million from the releases "War," "3:10 to Yuma" and "Good Luck Chuck" compared with $20.5 million in 2006.

Two additional titles, Tyler Perry's "Why Did I Get Married?" and "Saw IV," were released theatrically after the close of the second quarter.

Lionsgate's home entertainment revenue came to $122.3 million, compared with $115.1 million last year, on the strength of DVD releases for "The Condemned" and "Delta Farce."

TV revenue was $37.3 million compared with a year- earlier $33.4 million.

Second-quarter international revenue was $31.1 million, compared with $17.1 million in 2006, while television production revenue came to $109.1 million compared with a year-earlier $31.6 million.
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