Lionsgate Reports Quarterly Earnings, Will Explore Starz Sale or Spin Off

Lionsgate swung back into profitable terrain during its most recent fiscal quarter, another sign that the pandemic's cloud is beginning to lift. But the company also announced that it could soon be slimmed down as it hopes to capitalize on the consolidation in the media space, one that has already seen Amazon agree to buy Metro-Goldwyn-Meyer, Discovery announce plans to merge with WarnerMedia, and Disney's purchase of much of 21st Century Fox.
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The earnings per share hit analysts' projections, but the revenue figures fell short of expectations. Revenues at the media company hit $887.8 million, a nearly 20% increase from the $745 million that Lionsgate reported during the same period in 2020, a time when COVID-19 was still ravaging the entertainment landscape. Earnings per share came in at 15 cents. Thanks to subscriber growth in its streaming subscribers and a series of new television shows, Lionsgate recorded net income of $7.5 million instead of the loss of $18.5 million that it reported in the year-ago period.
Like many entertainment companies, Lionsgate is trying to muscle into the crowded streaming race, and enjoying some success with its investment. The company saw a 40% year-over-year jump in subscribers to its Starz streaming services, which now top out at 18 million globally.
“Starz drove growth of 1.3 million global streaming subscribers with the strong premieres of three new series in the quarter, our television group launched six new series and renewed six current shows, and our motion picture group added to an already robust pipeline with the production starts of nine new films.” “I’m pleased to report another solid financial quarter with strong content generation across our business,” said Lionsgate CEO Jon Feltheimer.
Lionsgate spent $4.4 billion to buy Starz in 2016, a move that expanded its television operations, but one that also added to its debt load. To that end, Lionsgate announced that its board of directors has given the greenligiht to its management team to explore spinning off or selling its Starz division.
Lionsgate completed the acquisition of Spyglass Media Group's 200 film library in the quarter. That list of titles includes the likes of "The King’s Speech, "Silver Linings Playbook," "Django Unchained," and "Inglourious Basterds."

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