Lionsgate CEO Talks Studio "Transformation," Courting Wall Street

Jon Feltheimer - Getty - H 2018
Mike Pont/FilmMagic

"All of these changes bring with them the need to better communicate to the Street," Jon Feltheimer told investors at his annual general meeting.

Lionsgate's big swings for Starz and talent management firm 3 Arts Entertainment and launching China theme parks spotlight a giant "transformation" at the Hollywood studio, CEO Jon Feltheimer on Tuesday told shareholders at his annual general meeting in Vancouver.

"It was a year in which we achieved success by creating business models for every kind of platform, found our own places to compete and win, and continued to occupy a unique and special place as a supplier of premium content to women, African-American, Latinx and LGBTQ audiences who have been historically under-served and underappreciated," Feltheimer said of the past year.

But his pep talk to investors included a new fast-track project: juicing Lionsgate's share price down by nearly half in value in 2019 — though the studio's stock has rebounded by 20 percent in the last 10 days — by doing more to court public market investors.

"All of these changes bring with them the need to better communicate to the Street the value creation I’ve just outlined as well as how we intend to better unlock that value. That will be our highest priority in the coming months," Feltheimer promised.

The Lionsgate boss said the studio had "become a major player in the subscription business with our acquisition of Starz and its evolution into a premium global platform with over 27 million subscribers." During his shareholder address, obtained by The Hollywood Reporter, Feltheimer didn't address speculation that Starz may be sold to ViacomCBS and combined with Showtime.

But the exec did point to a stronger bond with Hollywood talent by taking a majority stake in 3 Arts Entertainment, and going deeper into unscripted TV by acquiring Pilgrim Media. The studio expects around 25 million visitors to visit its theme parks and branded attractions on four continents by the end of 2019.

"These are all new businesses, but we also spent the past year continuing to transform and build upon our existing businesses," Feltheimer added as he pointed to new leadership at his studio's film division, a closer production partnership between the Lionsgate and Starz TV groups and a resurgent movie release slate.

"Three of our last four films have overperformed expectations and buzz is building for upcoming releases like Rian Johnson’s Knives Out, a sensation at the Toronto Film Festival, and Jay Roach’s Bombshell," he argued. But despite Lionsgate being seen as a likely takeover target amid industry consolidation, the studio's share price has lost altitude in the last year, not least because of recent investor concern over Comcast's continued carriage of Starz.

Feltheimer said Lionsgate would continue investing in new businesses and invigorating core content businesses. In a pitch to investors, he promised a better return on investment going forward.

"Maintaining that balance will continue to make our company stronger and will add significant additive long-term value for our shareholders," Feltheimer said.