Lionsgate CEO Dismisses "Bad Week" for Media Stocks, Welcomes Disruption
"We are in a very robust environment right now as a pure play content company," studio head Jon Feltheimer told analysts.
Lionsgate told jittery investors on Friday that media industry volatility plays to the studio's strengths as it exploits a rapidly expanding array of digital platforms as new buyers of its premium content.
"We are in a very robust environment right now as a pure play content company. I don't see it changing because there was a bad week in the market," Lionsgate CEO Jon Feltheimer told analysts after his company unveiled its first quarter results on Thursday. Stock in the studio bounced back in Friday morning trading by $2.00, or nearly 6 percent, to $37.38, after sliding by the same amount in after-hour trading on Thursday as Lionsgate's latest financial results were impacted by a weaker film slate.
The company's stock has been caught up in a market downdraft for media stocks caused by concerns about the future of the cable networks business after Walt Disney this week reduced its growth guidance for ESPN and analysts and investors shifted their focus to ratings and advertising weakness and cord-cutting risks.
Feltheimer told analysts Lionsgate was moving beyond volatile exhibition and broadcast businesses by creating content for the next wave of premier content distributors in an expanding streaming and subscription pay universe. "We believe that disruption in the marketplace will play to our natural strengths as a global content company with few legacy constraints and a culture of innovation," he told analysts.
"People are watching more content on more platforms than every before. Most of the U.S. partners we're in business with are driving the additional exploitation of premium content, which then plays off in secondary platforms," Feltheimer added. The morning call highlighted new partnerships Lionsgate was inking with CBS Films, Televisa and Hasbro. The Hasbro pact has now gone beyond an initial movie version of the Monopoly board game to now include a 2017 release by the studio of Hasbro's My Little Pony pic, to be voiced by Kristin Chenoweth.
On the gaming side, Lionsgate is partnering with game developer and publisher Starbreeze to launch a first-person shooter game in virtual reality based on the John Wick movie property. Virtual reality studio and distributor WEVR, which was behind theBlu: Encounter, will create a VR experience introduce the game.
Back on the exhibition front, Feltheimer talked about the upcoming movie slate as investors get nervous over how Lionsgate will fill its pipeline in a post-Hunger Games era. The studio plans its biggest-ever day-and-date movie launch for The Hunger Games: Mockingjay Part 2 on November 20, 2015, and Insurgent is nearing the $300 million mark in worldwide box office.
And production on Now You See Me 2 has wrapped, while Lionsgate accelerates planning for Now You See Me 3, Feltheimer reported. The studio will also release God of Egypt worldwide in 3D in April 2016, and Lionsgate and the creative behind the Hunger Games franchise, including director Francis Lawrence, are in preproduction on a retelling of Homer's The Odyssey.
That project is set for a production start in the first half of 2016, with Feltheimer predicting the movie series will become tentpoles in his studio's movie slate. Elsewhere, John Wick 2 will start production in October 2015 in New York and Rome.