Film Flops Like ‘Borderlands’ Lead Lionsgate to Steep Quarterly Losses, CEO Jon Feltheimer Acknowledges ‘Disappointing’ Results

“Borderlands,” “The Crow,” and other film flops deflated Lionsgate‘s quarterly earnings, leading the movie and TV studio to report a loss of $163.3 million. It was a rough stretch that Lionsgate CEO Jon Feltheimer attributed to “a transitional, disrupted and difficult year for our industry,” one that saw the studio dealing with the aftershocks from the actors and writers strikes of 2023 that brought the industry to a standstill. Feltheimer went on to bluntly characterize the financial results as “disappointing.”

Revenue for the film and TV studio topped out at $948.6 million, down 7% from $1.01 billion in the year-ago period. Lionsgate also reported an adjusted net loss attributable to shareholders of $102.5 million or 43 cents a share. The company beat Wall Street estimates, with analysts predicting that the company would post revenues of $921 million and earnings per share of 48 cents.

“Our performance underscores the need to adhere even more rigorously to the risk mitigated business models, slate diversification and strict financial discipline that have always served us well,” Feltheimer said.

It’s been a time of transition at the company behind “The Hunger Games” and “Twilight,” with Lionsgate undergoing a long process intended to separate its studio business from its Starz streaming service and TV network. The TV and film production business will exist under the umbrella of Lionsgate Studios, which debuted as a standalone public entity on May 14 under the Nasdaq ticker symbol LION. The Starz business will be repackaged into a different company, dubbed Lionsgate, a process that will be finalized by the end of calendar year 2024. 

Revenue at Lionsgate’ motion picture arm jumped 3% to $407.1 million, but segment profit decreased to $2.6 million on the underperformance of its film slate. Television production revenue increased 6% to $416.6 million, but profits fell to $24.4 million. And Lionsgate’s media networks unit, which consists of Starz, saw revenue stay essentially flat at $343 million, while segment profit decreased to $26.9 million as subscribers declined 2.6% to 12.4 million.

On a call with analysts following the earnings release, Feltheimer provided insight into a media business that has been upended by labor unrest, changing audience habits and retrenchment after a boom in streaming and TV production. As the streaming wars have cooled off, Feltheimer argued “the market correction has impacted both the scripted and unscripted landscape with buyers continuing to order fewer shows.”

When it came to movies, an area where Lionsgate has struggled to be competitive in recent months, Feltheimer said the company will make two to three tentpole films annually. Those will be supplemented by star-driven commercial projects. He touted upcoming film such as “The Housemaid,” a thriller with Sydney Sweeney and Amanda Seyfried, as well as Luca Guadagnino’s remake of “American Psycho,” as illustrative of that strategy.

“We like what lies ahead in an industry that has always moved fast to adopt great new technologies to save money and increase efficiency, where streamers and other platforms will return to being robust buyers of films, television shows…as they continue to strengthen their balance sheets and regain their footing, and where consumers are slowly but surely returning to the habit of going to the movies,” Feltheimer said.