Lionsgate Plans 17 Films For 2017, Says ‘Star Wars’ Grabbed $50M-$100M From ‘Mockingjay 2’; Stock Falls 27%
UPDATE with Lionsgate’s closing share price: Lionsgate is increasing its 2017 film slate by four films next year, from 13 to 17 films in wide release with lower overall film costs as they focus on “discipline production spends and a diverse portfolio,” executives said in a call early this morning with Wall Street analysts. The subject of Mockingjay 2‘s underperformance loomed large in the call as it affected the quarter.
Wall Street reacted sharply to yesterday’s earnings miss and today’s comments from CEO Jon Feltheimer that it was holding off on providing guidance. Lionsgate shares finished Friday at 18.53, down 27%, after hitting a new 52-week low of 16.21 intraday. That did no favors for the stock price of Starz; Lionsgate said earlier in the week it was exploring merger options with the cable network. Starz was off 22% today to 24.30 and nearly hit a 52-week low itself as both the Dow Jones and Nasdaq stumbled Friday.
Lionsgate execs during this morning’s call did note that despite Mockingjay “underperforming their profit margins by over $100M,” they believe that with their strong TV side — which includes Orange Is The New Black, which was renewed for three more seasons today, and The Wendy Williams Show — and ancillary businesses along with their three more wide releases in 2016 that includes another Divergent installment (Allegiance), they “have a clear path back to the adjusted EBITDA run rate of $350M to $400M that we’ve seen in recent years.”
They blamed the terrorist attacks in Europe along with box office monster Star Wars: The Force Awakens for knocking down the performance of Mockingjay 2. “I think the combination of circumstances was unique between the terrorist attack in Europe and Star Wars,” said Rob Friedman, Lionsgate’s co-chairman of the Motion Picture Group. He said the box office overperformance of Star Wars “hit our numbers by somewhere between $50M and $100M.” That claim is sure to raise some eyebrows around town.
RELATED: Lionsgate Shares Fall As ‘Mockingjay 2’ Contributes To Weaker Than Expected Quarter
However, the last in the Lionsgate franchise even failed this year to surpass The Last Witch Hunter in China. Lionsgate CEO John Feltheimer blamed it on the date and the competition as they were “all sandwiched together between The Martian and Spectre and we couldn’t get the screens.” He said, “we were disappointed in Mockingjay‘s performance in the country, especially since we did our first China premiere there.”
They also noted that 2016 was always considered to be the lowest contributor to their three-year plan because of the heavy production cost of Mockingjay 2. They said that 2017 slate should be stronger financially for the company because of the diversification of their slate, because they have plan to drop more films in the marketplace. “Clearly we feel very,very excited about Power Rangers, Hood (which stars Jamie Foxx), The Odyssey among others — not to mention Now You See Me 2 is coming and we are already starting for Now You See Me 3,” said Friedman. “So, we feel we have a lot of IPs that have a lot of breakout possibilities.” He also said he thinks that La La Land will be a breakout film for them and expect “a solid performance” from the upcoming Gods Of Egypt which they are advertising during the Super Bowl. That one bows on February. “We are not overthinking the performance on these.”
Gods of Egypt’s cost exposure, which is reported to have a $140M budget, is limited to the company, they said. Because of pre-sales, and tax credits, they said their actual risked capital in the film is under $10M.
It says it will also add two more horror films this year, they call “major additions.” Lionsgate also is planning a virtual reality game for its newest action franchise John Wick 2 as well and they believe they will start reaping “significant contribution” from the game space and from location-based entertainment business in the coming three years.
Related stories
New 'Gods Of Egypt' Trailer": Lionsgate Unleashes Super Bowl Spot A Day Early
'Gods Of Egypt' Getting 60-Second Spot In Super Bowl Pre-Game Show
MacGyver Film In the Works From Lionsgate
Get more from Deadline.com: Follow us on Twitter, Facebook, Newsletter
