Tag Archives: Lionsgate

Viacom, MGM and Lionsgate to take on HBO, Showtime

NEW YORK (Reuters) – Sumner Redstone’s Viacom Inc will launch a premium TV and movie channel with Lionsgate and Metro-Goldwyn-Mayer, aiming a direct volley at Time Warner Inc’s HBO as well as Redstone’s own Showtime networks owned by CBS Corp.

The new channel will have originally produced television series, as well as feature upcoming movies like “Iron Man” and “GI Joe” and classic hits such as MGM’s “James Bond” franchise and Lionsgate’s “Dirty Dancing.” It is expected to launch in autumn 2009, the companies said in a statement on Sunday.

The venture, in which Viacom will take a lead role and own the biggest stake, is viewed as a challenge to CBS, which controls the Showtime Networks Inc premium movie and TV cable channels. Showtime currently holds contracts to show movies from MGM and Lionsgate.

“I have stated from the beginning that Viacom and CBS have the right to pursue their own strategic objectives in the best interest of their individual shareholders,” Redstone said in an e-mailed statement. “Competition between the two companies hones their skills and their productivity.”

Viacom, which owns the Paramount film studio and MTV Networks, was split from CBS in 2006 to appeal to different classes of shareholders. Both are controlled by Redstone.

Lionsgate and MGM are not expected to renew their contracts with Showtime when they expire at the end of 2008. Paramount’s contract with Showtime ended in 2007 and has not been renewed.


“It’s my job to create maximum shareholder value for Viacom. It’s Leslie’s job to create maximum value for his company,” Viacom Chief Executive Philippe Dauman told Reuters in a phone interview, referring to CBS CEO Leslie Moonves.

Dauman said contracts between pay TV channels and movie studios are usually very long, and he took the opportunity to negotiate this deal as the Showtime contracts were ending.

“It is rare for a studio product to be available,” he said.

Films and shows from Paramount, MGM and Lionsgate will be made available to the new channel and services on an exclusive basis during the pay television period, with some exceptions.

Paramount’s contract with director Steven Spielberg for “Indiana Jones and the Kingdom of the Crystal Skull” requires the film to be made available to the highest bidder for television, for instance.

Showtime dismissed the threat of the new competition. As movies now are often sold on Apple’s iTunes online store or on video-on-demand months before reaching pay TV, it is original programming such as HBO’s popular series “The Sopranos” that attracts the biggest audiences.

Average household ratings for theatrical films have declined 80 percent since 2001 at Showtime, according to Nielsen ratings.

“We’ve made no secret of the fact that we’ve felt for some time that the value of these feature films has been declining,” Showtime Chairman Matt Blank said in a phone interview.

“We wish them luck,” he said, adding that the contracts allow a mix of films from the studios in the joint venture to play on Showtime through 2011.

One source familiar with the matter said Showtime was unwilling to pay higher licensing fees demanded by the studios.

Since CBS’s split from Viacom, the two companies have drifted into each other’s businesses with Redstone’s blessing. CBS, for instance, has launched a small film studio to develop smaller budget films, a move that could help it save on costs to acquire films to air on Showtime.

Financial details or terms of the joint venture were not disclosed, but Viacom said its MTV Networks division will provide promotional as well as other services. The joint venture is a “multi-year” deal, Viacom said.

With more than a year before its launch, details, such as management and what types of new digital services will accompany the channel are being worked out. The parties will announce a new chief executive for the venture shortly.

“It’s a unique point in time to reinvent the category,” Dauman said. “We can provide a lot more ways to provide what consumers want, whether it’s broadband opportunities, maximizing video-on-demand opportunities and HD.

Source: Hollywood Reporter

Lionsgate full year profit of $27.5M

VANCOUVER (CP) _ Independent film studio company Lionsgate reported earnings of $27.5 million for the full-year ended March 31, compared to $6.1 million last year due largely to international sales and television revenue.

The Vancouver and Santa-Monica, Cali-based company, which trades on the New York Stock Exchange, said revenues climbed to $976.7 million compared to $945.4 million last year.

Lionsgate said overall motion picture revenue for fiscal 2007 increased six per cent to $858.2 million.

Theatrical revenue fell 26 per cent to $107.9 million despite the success of such films as Saw III, Crank and Akeelah and the Bee.

Television revenue soared 50 per cent to $109.3 million driven by movies aired on television such as Hostel, Saw II and Larry the Cable Guy.

International revenue jumped 72 per cent to $105.2 million.

Lionsgate Tries a Little TENDERNESS

SANTA MONICA, Calif., Dec. 19 – Lionsgate, announced today that it has acquired the North American, U.K., Australian and South African distribution rights to GreeneStreet Films’ TENDERNESS, a thriller directed by John Polson (HIDE AND SEEK, SWIMFAN). 

Written by Emil Stern and based on the novel by Robert Cormier, TENDERNESS is produced by GreeneStreet co-founder John Penotti, Howard Meltzer and Charles Randolph; GreeneStreet co-founder Fisher Stevens and Tim Williams are executive producers. 

Jana Edelbaum of iDeal Partners Film Fund and Scott Hanson and John Allen of Hanson Film Fund are also executive producers. GreeneStreet Films, iDeal Partners Film Fund and Hanson Film Fund co-financed TENDERNESS. The film stars Academy Award® winner Russell Crowe, Jon Foster, Sophie Traub and Academy Award® nominee Laura Dern. The announcement was made jointly by Lionsgate President of Theatrical Films Tom Ortenberg and President of Acquisitions and Co-Productions Peter Block.

"TENDERNESS delivers an unbeatable combination of story, filmmakers and actors," noted Ortenberg and Block. "The common denominator here is intensity: on the one hand, you have the heightened emotions of a young couple on the run, and on the other, the fierce resolve of the cop who is hard on their trail, trying to prevent disaster. John Polson, Russell Crowe, Jon Foster, Sophie Traub, and Laura Dern have given it their all — which means that audiences can count on an incredibly gripping experience."

Said Penotti, "We are delighted to be partnering with Lionsgate on TENDERNESS. The entire Lionsgate team is renowned for their sharp ideas and enormous energy, and we are looking forward to working with them to bring TENDERNESS to moviegoers on four continents."


Lori Cranston (Sophie Traub) is a confused fifteen-year-old dreamer in search of an escape from her troubled home life. She discovers and becomes enthralled with Eric (Jon Foster), a young man with a violent past. As they embark on a harrowing journey, a hardened local cop (Russell Crowe), who has been following Eric for years, is intent on exposing him as a serial killer before Lori’s fate is determined.

The deal was negotiated for Lionsgate by Block, Jason Constantine, Senior Vice President of Acquisitions, and Wendy Jaffe, Senior Vice President Legal & Business Affairs, Acquisitions; and for GreeneStreet by Vicki Cherkas, GreeneStreet Head of Business Affairs, Business Development and New Ventures, and CAA.

Lionsgate Urges Change at Image

SANTA MONICA, Calif., and VANCOUVER, British Columbia, Oct. 9/PRNewswire-FirstCall/ – Lionsgate (NYSE:LGF) today issued a final statement to fellow Image Entertainment (NASDAQ:DISK) stockholders emphasizing that every vote counts in Image’s annual stockholders meeting which is being held tomorrow, October 10, 2006. Lionsgate is urging fellow Image stockholders to vote for a change by voting for Lionsgate’s independent slate of nominees by telephone or Internet today. The text of the statement is below. For more information, please visit www.votetoimproveimage.com.

Image Entertainment’s Annual Meeting is tomorrow. Every vote counts, and we urge all of our fellow Image stockholders to support our independent slate of nominees and to vote for change today. The two leading independent governance authorities that have examined this proxy contest – Institutional Shareholder Services (ISS) and Glass, Lewis & Co. – have both reached the same conclusion – change is needed at Image.

If you remember only three words from this entire proxy challenge, we believe that those words should be "independent" and "stockholder value." Dr. Duke Bristow, Barry Perlstein, Jack R. Crosby, Edward Huguez, Joseph J. Incandela and Joachim Kiener are experienced, highly qualified, independent nominees who can guide Image to a new course where stockholder value is an imperative rather than a distraction. These nominees are beholden neither to Lionsgate nor to Image’s current entrenched management team — they are beholden only to you, our fellow stockholders. Their only mandate is to make a genuine, meaningful and independent commitment to explore ways to maximize stockholder value.

ISS and Glass Lewis have both urged that their clients vote FOR Dr. Bristow. Glass Lewis recommends that its clients vote FOR Barry Perlstein as well. Both ISS and Glass Lewis recommend that their clients DO NOT VOTE for ANY of Image’s slate of nominees. We respectfully ask that you follow those recommendations to NOT VOTE for any of Image’s slate of nominees, and we urge that you vote the BLUE proxy card FOR all six of our highly qualified, independent nominees. We appreciate your consideration of this issue, which is important to all of us as stockholders of Image Entertainment.

Vote Value. Vote Blue.

We urge you to vote the BLUE proxy card TODAY – by telephone or by Internet. If you have already voted a white proxy card, you can automatically revoke that earlier vote by simply voting your BLUE proxy card TODAY.

Lionsgate Letter to Image Stockholders

SANTA MONICA, Calif. and VANCOUVER, British Columbia, Oct. 5/PRNewswire-FirstCall/ – Lionsgate (NYSE:LGF) today sent another letter to other Image Entertainment (NASDAQ:DISK) stockholders urging them to focus on the "central issues" of the current proxy challenge and to elect the six independent candidates nominated by Lionsgate to replace Image’s current board of directors at Image’s annual stockholders’ meeting next Tuesday, October 10, 2006. The proxy advisory services Institutional Shareholder Services (ISS) and Glass, Lewis & Co. have now both recommended DO NOT VOTE for any director on Image’s slate.

The text of the letter is below. For more information, please visit www.votetoimproveimage.com.


Dear Fellow Image Stockholder:

Image Entertainment’s October 10, 2006 Annual Meeting is only five days away. The rhetoric of the current proxy contest cannot obscure the following realities that we urge you to consider when voting. These are the central issues of this proxy contest on which we believe that you should focus, because these are the issues that affect you, like us, as Image Entertainment stockholders.

Image is unprofitable.

Who says so? They do. In their fiscal 2007 first quarter earnings announcement, they reported a net loss of $0.11 per share. They missed analyst estimates for the second time in a row and the sixth time in the past nine quarters. Then, in their most recent September 29, 2006 letter to you, they told their stockholders that "this year, with the distraction, cost and expense of Lions Gate’s repeated attacks, we have become unprofitable." They neglected to tell you that last year (fiscal 2006) they were also unprofitable, as well as in fiscal 2004, fiscal 2003 and fiscal 2002. Blaming Lionsgate’s proxy challenge for their own unprofitability is one of the most disingenuous and irresponsible excuses for poor corporate performance that a company has ever given to its stockholders.

Image’s operating margins continue to deteriorate.

Their operating margins have declined to negative 9.1%, continuing a negative trend that began with their June 30, 2005 quarter and is now worsening.

Image’s overhead is bloated.

Image’s overhead costs increased to 17.2% of revenues in their most recent fiscal quarter.

Image’s stock is significantly underperforming every major market index.

Their stock price has fallen from $5.94 on December 31, 2004 to $3.43 as of yesterday’s close, reflecting a 42% erosion of shareholder value over that period.

Image’s current Board is conflicted.

Who says so? The Wall Street Journal reported on September 6, 2006, that "five of the seven [Image] directors are listed in the company’s proxy statement under the heading of having ‘certain relationships and related transactions’ with Image, even though those five are also billed as ‘independent directors,’ or those without other ties to the company." Nell Minow of the Corporate Library, an independent authority on corporate governance, concluded that the directors’ ties to the company "make it very difficult for the company to show that they looked at the proposals for purchase fairly and independently."

Image has had a Special Committee in place for the past year to examine strategic alternatives for maximizing shareholder value, and they have proposed nothing to stockholders.

In the past year, Image’s special committee has made no recommendations to stockholders regarding ways to increase shareholder value. It appears that Image’s current board is either unwilling or unable to identify ways of maximizing value to its stockholders.

Image refuses to disclose specifics about its allegedly "landmark" deal with Relativity.

On August 14, 2006, Image announced a deal with Relativity Media LLC that its current management hailed as possibly "the single most significant agreement" in Image’s history. Yet in their most recent September 29, 2006 letter to you, they didn’t even mention this "landmark" deal once. Why? Perhaps because they are unwilling or unable to provide specifics. Perhaps because they promised their stockholders in their August 14, 2006 announcement of the deal that they would announce specific titles by the end of September and, once again, they broke their promise. They have not even filed the underlying agreements with the Securities and Exchange Commission for stockholder review, as is customary with any significant agreement, much less one the company considers a "landmark" deal.

It’s time for a change.

Who says so? After hearing presentations from both Image and Lionsgate, the leading proxy advisory service Institutional Shareholder Services (ISS) concluded last week, "the long-term financial, operational and recent governance performance of [Image] and Mr. Bristow’s background in corporate governance establish both the need for change and the dissident’s ability to effect change." ISS recommended a vote FOR only Dr. Duke Bristow from our independent slate. ISS recommended DO NOT VOTE for ANY director on Image’s slate.

The other leading proxy advisory service Glass, Lewis & Co. concluded today that "the incumbent board has presided over an extended period of poor operating performance and we believe that it has taken a lackadaisical approach to its review of strategic alternatives." Glass Lewis recommended votes FOR Dr. Bristow and Barry Perlstein from our independent slate. They, too, recommended DO NOT VOTE for ANY director on Image’s slate.

These are the issues that Image wants to distract you from with inflammatory rhetoric and false scare tactics about "stacked" boards — the issues of their shrinking margins, sagging profits, bloated overhead, conflicted board and the need to increase shareholder value. To paraphrase the film A FEW GOOD MEN, "These are the facts, and they are undisputed."

Our highly qualified independent board shares your interests – finding ways to reverse the slide in Image’s operating performance and committing themselves to a genuine search for ways to increase shareholder value. Their only commitment that they have given us – and the only commitment we have sought from them – is to, if elected, exercise their independent judgment in all matters that come before the Image board in accordance with their fiduciary duties to all stockholders. They are beholden neither to us nor to Image’s current entrenched management team – they are beholden only to you, the stockholders of Image Entertainment. We trust that you will cut through the rhetoric to focus on the real issues and will agree that there is a need for change.

Vote Value. Vote Blue.

We urge you to vote the BLUE proxy card today – by telephone, by Internet or by signing, dating and returning your BLUE proxy card in the postage-paid envelope that was provided to you earlier. If you have already voted a white proxy card, you can automatically revoke that earlier vote by simply voting your BLUE proxy card today.

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