Lionsgate Vice Chairman Michael Burns hinted at a potential deal — nothing specific- — as media M&A heats up with the indie studio a prime target. Wall Streeters have called it both desirable and easily digestible in terms of cost for a bigger player.
But asked outright about the company as a takeout target, he was coy: “We do expect to see more consolidation in the media space. That’s a given. And we are obviously one of the last remaining very large companies. And there is great scarcity value out there. What we are going to do is to explore ways to increase the value of our stock price,” Burns told the virtual Goldman Sachs Communacopia media conference Tuesday.
The stock was trending down today at about $13. It’s well off it’s 52-week low near $6, but also down from its high in the spring of over $20.
AT&T is cutting WarnerMedia loose to merger with Discovery. And in more of a Lionsgate-sized deal, Amazon is acquiring the other sizeable independent studio, MGM.
“I think our size in many ways is our advantage. The ability to be nimble. We are the PT boat surrounded by battleships. We can move very, very quickly,” Burns said, noting Lionsgate was buying up libraries “when many of the giant behemoths were trying to figure out what to do.” (He said it has all Weinstein product from 2005 to 2018 and is the largest holder of Quentin Tarantino product. and “an opportunity to monetize library product like never before” in the streaming wars.)
It’s the reason speculation continues to dog ViacomCBS, Comcast and smaller independent producers. The acquisition of Reese Witherspoon’s Hello Sunshine by a media venture led by Kevin Mayer and Tom Staggs has led to both strategic and financial buyers kicking the tires for smaller deals.
Lionsgate’s streamer Starz has bee growing steadily under Jeff Hirsch with a targeted demo and the execs reiterated that it’s going for niche excellence, not general entertainment like Netflix or a combined HBO Max-Discovery+.
Asked about the windows controversy that’s rankled talent and upended deals (including by Scarlett Johannsson, who sued Disney over Black Widow’s release strategy), Burns said, “We are in the Wild West right now and a lot of those deals will be a little bit different than they used to be,”
“We have always looked at the talent as our partners, whether they are Tyler Perry, who we did 18 films with, or the guys that brought us Saw, or the John Wick franchise that keeps doing better and better,” Burns said. “I think the way people get paid, the giant $20-$25 million-dollar actors will have different compensation criteria … if something goes right to streaming.”
Lionsgate is a strong believer in the theatrical marketplace but windows “will bounce around. You have 17, you have 45, but you will have theatrical. I can’t tell you what the right number is.”
He defended a short window for films that don’t perform well in theaters. “If you were going to spend significant amounts of money [marketing] a movie.. and it doesn’t work, it doesn’t make sense for the studio to have to wait a long time for the ancillary market, because the longer you wait the less of a memory is in the consumer base. You want to be able to piggy back.”