Is Lionsgate Studio Heading Public?

If you’re in the market for a new stock pick to broaden your portfolio, then you may want to be on the lookout for the newly-minted LION ticket. From May 2024, Lionsgate Studios will be trading as a separate public company on the NASDAQ exchange. Blake & Wang P.A. entertainment lawyers in Los Angeles, Brandon Blake, is here with all the information on this exciting new era for the studio.

Brandon Blake

Special Purpose Acquisition Company

Lionsgate has been making moves to spin off its film and TV studio business for a while now. Last week, a SEC filing was declared effective by the U.S. Securities and Exchange Commission, allowing a new SPAC, Screaming Eagle Acquisition Corp., to be formed alongside their sponsor, Eagle Equity Partners. This should allow the formation of a separate, independent Lionsgate Studio company to launch by early May. The next step will be a shareholder/public warrant holder meeting, currently set for May 7.

Separation from Starz

It is anticipated that the new standalone public company will open up new doors before the full separation from Starz is laid to rest. As a public company, it will be able to raise new capital as well as (potentially) merge with another business. Lionsgate, of course, comes complete with an immensely appealing legacy library across both film and TV. While most M&A attention is currently focused on the inevitable need to close a deal for the Paramount Group, this could open the doors to more merger-focused activity in the entertainment industry later this year. Particularly as Warner Bros Discovery, which has been having an excellent run of release luck recently, will be free to re-enter the bargaining space very shortly. 

Under the new SPAC, the parent company will keep 87.3% of Lionsgate Studios shares, while Screaming Eagle Acquisition Corp will control the remainder of the equity stake. 

2024 Box Office Predictions Get an Upward Revision

The end of 2023 saw many gloomy mutterings about losing all the ground the box office recovery gained through the year in a 2024 inevitably hampered by a throttled content pipeline. A rather slow start to the 2024 box office didn’t do much to offset these concerns. Despite these challenges, however, the first quarter of 2024 managed to close slightly stronger than was initially expected. With some key releases expected to perform well later in the year, too, this has led Gower Street Analytics to upgrade its predictions for the 2024 box office- and that’s always good news! Our entertainment lawyer from Blake & Wang P.A., Brandon Blake, is here to share this good news. 

Brandon Blake

Upward Revision

Gower Street Analytics has raised its global box office predictions for 2024 to $32.3B. This represents a 2.5% increase on the initial $31.5B prediction. While it would still close the year out around 5% lower than last year, it would certainly be a welcome shift. The revision would also have been higher if not for some marked exchange rate fluctuations globally that have hurt the collective gain across international markets. In a fickle market like finance, we may well see that reverse itself later in the year, too. 

Unpacking the Figures

This upward revision is also based on a Q1 actual performance of 1% ahead of domestic projections for both the US and China. Other global markets turned in an impressive 11% higher than previous estimates, too. These gains, coupled with some changes to the release schedule that added high-profile properties like Moana 2 to the 2024 calendar, are good reasons to look at the rest of the year with a little more optimism than previously. 

Currently, we may see a $8.2B domestic box office from 2024, with a $550M increase (to $16.2B) for international markets besides China. China is expected to remain relatively flat. While it may not (yet) be a full return to pre-pandemic levels, it’s some fantastic news from what was initially a rather gloomy box office cycle. Let’s hope to have even more good news to share as we get further into the 2024 box office year. 

The Boy and the Heron Conquers the Chinese Market

While the Chinese film-going market has always had a sweet spot for animations, it has been a slow market for Hollywood releases since the pandemic. Despite that general slow-down in the international film arena, the latest Studio Ghibli adventure, rumored to be creator Hayao Miyazaki’s last film, is well on its way to setting new box office records for the market. Blake & Wang P.A. one of the best entertainment attorney in USA, Brandon Blake, is here with the details.

Brandon Blake

New Box Office Record

It’s been difficult to predict what will land well with Chinese markets in recent years, but The Boy and the Heron will certainly be leaving its mark. Predicted to close well over the $100M mark in the market (easily achievable, given it has already crossed the $73M mark), it has unseated Godzilla x Kong: The New Empire from its pedestal with a $13.7M opening weekend.

It will also now hold the title for the biggest single-day performance ever by a non-Chinese animated film, with its impressive Thursday record of $23.7M. This unseats Disney’s Frozen 2, released in 2019.

Holiday Helper

While the film is widely seen as an animation masterpiece, it also benefited from a smart release schedule for the Qingming public holiday, which has become a major date for family moviegoing in the Chinese release calendar. It managed to achieve this impressive victory despite steep competition from several local titles also debuting in the same frame, including Dwelling by the West Lake, which currently takes the No. 3 position behind Godzilla and The Boy and the Heron.

If the film manages to net $105M in the Chinese market, it will be Miyazaki’s highest-grossing film release in the country. It would be a great double-crown to add to the $46.6M it earned domestically, Studio Ghibli’s best US showing to date. It has already earned over $60M in its home Japanese market, too.

A New Market for English-Language Adaptions Announced by Cannes

One of the driving trends we saw in 2023 was the expansion of many streamers and studios into original non-English content. Now, the Cannes Film Festival has announced a new marketplace to help foster and encourage English-language adaptations of successful non-English films. Our Blake & Wang P.A. entertainment attorney and industry expert, Brandon Blake, is here to share this exciting new development.

Brandon Blake

Bringing Buzzy Euro Films to a Bigger Market

Cannes Remakes, as the marketplace will be called, will debut at this year’s Marché du Film – Festival de Cannes in partnership with the French National Center of Cinema and Moving Images. It will showcase a specially-picked selection of buzzy and top-performing EU IP titles, ready to be leveraged into new film adaptations in other languages. This new initiative has been entered into with the help of the Institute of Cinematography & Audiovisual Arts (ICAA), the Directorate General for Cinema, Cinecittà, and the Audiovisual-Italian Ministry of Culture (DGCA-MiC). It will primarily focus on Spanish, Italian, and French titles for the moment.

Market Expansion and the Pull of Remakes

As films like Parasite aptly demonstrated, a successful foreign-language title doesn’t necessarily need an English-language remake to find traction among global audiences. However, remakes are having their moment in the sun in the wider film industry at the moment, with local-language adaptions seeing considerable success.

Having a specialized marketplace to showcase the potential of these IPs should prove to be a lucrative venture in itself, with the films offering both proven marketability and a lower risk profile than brand-new IPs. For 2024, the marketplace will consist of a pitching session for the curated titles, paired with pre-arranged meetings and a networking event on May 20 at CNC Beach.

Cannes Remakes is just one of several new initiatives launched by the Marché du Film for this year, but it is definitely one of the most exciting.

National CineMedia Sees a Post-Bankruptcy Recovery on the back of the Box Office Recovery

Despite their overall revenue remaining relatively stable, the beleaguered National CineMedia group has managed to grow its fourth-quarter profit off the back of a strong Q4 performance from the domestic box office despite recent bankruptcy proceedings. Brandon Blake, our entertainment attorney from Blake & Wang P.A., looks deeper into the reasons behind this welcome boost.

Brandon Blake

National Advertising Revenue Growth

This growth in national advertising amounted to 2%, or $72M. This growth offset a fractional decrease in their regional/local ad revenue. National CineMedia’s net income came in at $23.7M for the final quarter of 2023. That’s quite an improvement on the $6.1M of the comparable quarter in 2022! Their overall revenue held remarkably steady at $90.9M (vs $91.7M in the same period for the previous year. 

This renewed interest in theatrical advertising comes as marketers have realized the importance of a strong cinematic release in boosting overall profits, including subsequent streaming releases. 

Post-Restructuring Plans

This will be welcome news in the wake of National CineMedia’s Chapter 11 bankruptcy filing and financial restructuring, which was completed in August 2023. This reduced their staggering $1.1B debt load to roughly $10M currently. Most of these losses were accumulated during the pandemic lockdowns and subsequent slow Hollywood recovery, which saw severe impacts on on-screen advertising. 

Despite the many successes of the 2023 box office, 2024 content pipeline disruptions due to last year’s dual strike actions could result in a slower 2024 box office and reduced release slates. The wider ad market remains soft, too. However, consumer demand for the theatrical market remains high, and audiences have returned to the theater in far higher numbers than was initially predicted post-pandemic. Let’s hope to hear more good news comes from the theatrical industry throughout 2024. 

Paramount Global Offloads Viacom18 Stake

At a time when much speculation hangs over the company as a whole, Paramount Global has now sold its 13% stake in Viacom18 to Mumbai-based Reliance Industries, its major shareholder. Whatever this means for the future plans around Paramount itself, the deal does create an intriguing amount of speculation. Blake & Wang entertainment attorney in Los Angeles, Brandon Blake, is here with the latest news.

Brandon Blake

Sold to Majority Stakeholder

The deal is said to amount to roughly $517M, according to its securities filing. Reliance Industries is already the major shareholder for Viacom18, which also covers the Comedy Central, Colors, and MTV brands alongside streamer JioCinema.

Reliance was in the headlines in late February as they inked a deal with Disney to unite Disney’s Star India brand with Viacom18. This includes a juicy $1.4B investment, in a joint venture estimated to be worth $8.4B. Disney, in turn, will be offering a content license to the joint venture, and may offer up additional media assets “subject to regulatory and third-party approvals”. It also gives the joint venture exclusive distribution rights for Disney films and Indian productions.

Regulatory Scrutiny Incoming

Naturally, the deal will still need to pass regulatory scrutiny. Interestingly, it also hinges on the closing of the previous deal between Viacom 18, Reliance, and Star Disney. Once the deal passes, Paramount is said to still be licensing content to Viacom18.

Naturally, spin-off deals like this are far from rare in the entertainment landscape, but this one will attract particular attention, as many see it as preparation for some kind of larger move from Paramount Global amid merger speculation. While there are several names in the pot currently, including a $30B offer from Byron Allen and some interest from Warner Bros. Discovery, we have yet to achieve full clarity on their plans for the future. For now, this new deal will inevitably be seen as the opening volleys of something bigger to come. We can only wait and see from here.

A&E Networks Make a Content-Fueled Bid for Advertising Revenue

It is no secret at this point that ad-supported streaming tiers have become the revenue lifeline streaming didn’t realize it needed. For many streamers, this shift into ad-supported programming has been coupled with an overall reduction in content spending as they vie to bring their strained balance sheets back into the black. Not so for A&E entertainment, however, as they announce an ambitious slate of over 2,500 hours of content in the hopes of attracting eager ad inventory buyers in a tough market. Brandon Blake, entertainment lawyer at Blake & Wang P.A. shares the news.

Brandon Blake

Unscripted TV Continues as the Streaming Darling

A&W Networks is best known for its unscripted TV content, albeit on linear, not streaming, platforms. Unscripted is currently seen as one of the strongest growth areas for the entertainment industry, especially in light of those cost-cutting measures. Given the consistent declines in pay TV revenue we’ve seen, however, remaining with a linear-only strategy is a bold move indeed.

Massive Upfront Slate

A&E Networks announced last week that they will be taking a juicy content slate of over 2,500 hours to their Upfront presentation this year, in the hopes of convincing ad buyers they have the staying power to remain competitive despite those linear ties. However, they have also been experimenting with some low-stakes library-based FAST TV options recently. Coupled with the recent interest in licensing streaming content to other platforms, this could be the boost A&E needs to attract ad buyer attention and ensure their longevity in the entertainment landscape.

To further boost that attractiveness, A&E has also put its focus on offering new ad tools to buyers, including its ‘InterAction’ platform. Will this be enough to keep ad buyer interest and position them as a competitive boutique media company? They certainly believe so, despite swimming against the changing tides of the wider entertainment industry.