Lionsgate’s Michael Burns Still Sees MGM as 'a Terrific Fit at the Right Price'

The vice chairman argues that activist shareholder Carl Icahn is "certainly a distraction," and that Lionsgate has a “better plan” than Icahn to run the business.

NEW YORK - Lionsgate vice chairman Michael Burns signaled Monday that he hasn't given up yet on the hope of one day acquiring MGM.

The studio would still "be a terrific fit for us at the right price," and he likes the new "smart" MGM management team from Spyglass, he said here at an investor conference.

Speaking at the 38th annual Global Media and Communications Conference, he said it would be up to MGM's owners, including Carl Icahn, who is also Lionsgate's largest investor, to do a potential deal "at the appropriate time." RELATED: Lionsgate lawsuit amended to torpedo Icahn’s proxy slate.

"We wish them luck," he said about MGM, but highlighted that Lionsgate has a more diversified business, which MGM lacks and would have to build for a lot of money over the coming years.

Discussing Icahn's effect on Lionsgate's business, Burns said the dissident shareholder has "certainly [been] a distraction" that has cost the company money and "a fair amount of time." But while the process has been "very frustrating," he said the management team has also remained "very focused" on running the business.

He didn't discuss the outlook for Icahn's slate of alternative board members, which shareholders get to vote on later this month at the firm's annual meeting. But Burns did say that Lionsgate continues to feel it has a "better plan" than Icahn. "I'm not quite sure what Carl's plan is," he added.

Asked about Epix's big five-year streaming content deal with Netflix this year, worth nearly $1 billion a year, Burns said Netflix CEO Reed Hastings and his content guru Ted Sarandos are "terrific." Epix is a joint venture of Lionsgate, MGM and Viacom.

Burns also said the streaming idea was originally pitched to Blockbuster a few years ago, but a deal didn't materialize.

Asked whether Netflix's big increase in market capitalization this year means the streaming service came out on top in the deal, Burns said he sees it as a win-win since Epix has been slightly profitable since October. "It made a few bucks," he said.

He also said that Epix's take rate by cable customers has been ahead of plan, but didn't provide details.

Asked if cable and other pay TV operators are upset that Epix did the Netflix deal, he said the premium TV service expects to sign more distribution deals with pay TV firms, including potentially a really big one, in the next quarter or two. He also highlighted that Epix gave Netflix the right to stream films 90 days after other distributors to ensure a different window.

"Netflix is a competitor to all these places," Burns said. Are they happy about the Epix- Netflix deal? "No."

But he also said it is up to cable operators to provide content in new forms, especially online. "Cable operators have to take advantage of...[the fact] that they are front and center," he said. "They have a huge advantage." But the consumer will ultimately dictate what they want, and all industry players must focus on their needs. "If we're not paying attention, we'll turn into dinosaurs," Burns said.