LIOS GATE LIONS GATE ENTERTAINMENT CORP.
2022
ANNUAL REPORT
To Our Shareholders:
In fiscal 2022, we continued to navigate an environment marked by unprecedented industry change, the continued global pandemic and increasing economic uncertainty. Despite these challenges, we reported a year with strong growth in which we continued to expand our current franchises, created new ones, added hundreds of titles to one of the world's most valuable film and television libraries, strengthened our leadership as an independent supplier of premium scripted television series, and continued the transformation of STARZ into a premium global subscription platform with great programming, a focused content strategy and continued strong global subscriber gains.
Our financial results reflected 10% year-over-year revenue growth to $3.6 billion, adjusted net income attributable to Lionsgate shareholders of $95.4 million or adjusted diluted EPS of $0.42 and adjusted OIBDA of $402.2 million. We increased global subscribers at STARZ by 21% to 35.8 million (including STARZPLAY Arabia) with global streaming subscribers increasing 47% year-over-year to 24.5 million. Our film and television library revenue was $766 million for the trailing 12-month period. Our financial results didn't meet all of our expectations, but our balance sheet remains strong and our robust content growth, status as a major independent content platform and versatile distribution strategy position us for greater long-term profitability and continued strong value creation in the years to come.
Recognizing that our employees are our most important resource, it was also a year in which we continued to strengthen our business through execution of diversity, equity and inclusion initiatives that are an important part of our entrepreneurial and collaborative culture. With the implementation of new inclusive hiring policies, 58% of new hires were women and nearly 40% of new hires came from racially diverse backgrounds. We moved to create strong in-house talent pipelines with 60% of our intern class drawn from racially diverse backgrounds, strengthened our mentoring programs, and more than doubled our year-over-year spend on diverse suppliers. STARZ continued its industry leadership in representing diverse voices in front of and behind the camera with its #TakeTheLead initiative earning a prestigious Humanitas Voice of Change award.
Growing Current Film and TV Franchises While Creating New Ones
During the year, we continued to focus on growing the portfolio of brands and franchises that drive our business. We greenlit production of the Hunger Games prequel, The Ballad of Songbirds & Snakes, based on the Suzanne Collins bestseller, bringing our biggest box office franchise back to theatres on November 17, 2023. Next calendar year's film slate will also be anchored by John Wick: Chapter Four, with production currently wrapping for a March 2023 release and plans underway for John Wick: Chapter 5. The John Wick spinoff Ballerina, with Knives Out and No Time to Die star Ana De Armas, enters production this fall, and we're putting the finishing touches on the origin story The Continental for television as we continue to build out a multifaceted John Wick Universe.
Also slated for release next calendar year is the next chapter of the Lionsgate action franchise The Expendables 4, with an A-list cast of stars. The re-imagined romantic classic Dirty Dancing, one of our library's biggest-selling titles, starring Jennifer Grey and directed by Jonathan Levine, will hit theatres in time for Valentine's Day 2024. Behind these tentpoles, the next wave of big branded intellectual properties includes the films Now You See Me 3, Naruto, Highlander and the Michael Jackson event film from Bohemian Rhapsody producer Graham King as well as the breakout hit television series Ghosts, the highest- rated new network comedy in years, and new hit television series Home Economics, Julia, Minx and P-Valley.
A Record Content Year for Lionsgate Television
With 14 new Lionsgate television shows picked up to series, the most ever in a single year, and 15 current series renewed for additional seasons, another record, our Television Group established the foundation for long-term profitability and value creation in the year. We secured renewals of all three of our broadcast network series Home Economics (ABC), Welcome to Flatch (Fox) and Ghosts (CBS), demonstrating our ability to pivot quickly to capitalize on market opportunities.
Lionsgate Television has formed relationships with nearly every streaming platform, with multiple series for HBO Max, Apple TV+ and Netflix, among others, and a growing roster of original series for AVOD platforms The Roku Channel, Tubi and Freevee. We also continue to be a prolific supplier of series for STARZ from the Powerverse and Blindspotting to Black Mafia Family and Run The World.
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With contributions from across our scripted, unscripted, Debmar-Mercury, Pilgrim Media and 3 Arts platforms, Lionsgate Television scaled its slate to over 100 series. Our success was driven by strong partnerships with leading content creators such as BBC Studios, with whom we produced two broadcast network hits, and 3 Arts Entertainment, a collaboration that achieved its best year ever with four series and a dozen other projects in the pipeline. The success of our 3Arts partnership served as the template for our recent investment in the U.K. talent management and production company 42, as we continued to roll out our talent strategy globally.
To support the continued growth of our content businesses, we opened and began production at our state-of-the-art Yonkers film and television studio facilities and extended our studio production footprint with the announcement of Lionsgate Studios Newark, which will open in 2024 and give us access to additional sound stages in close proximity to metropolitan New York.
Continued Growth of Our Crown Jewel Library
The success of our intellectual property continued to drive high-margin library revenue growth in the year. Trailing
12-month library revenue for fiscal 2022 and fiscal 2021 has increased by an average of nearly 40% in the past three years, with the freshness of our library titles - more than 80% have been produced since 2000 - contributing to their appeal. At a time when many studios are creating walled gardens to keep content within their own ecosystems, we remain committed to a strategy of operating as a global licensing powerhouse agnostic to platform.
Led by robust licensing deals for Ghosts and Schitt's Creek, we continue to see strong and growing demand for premium content, with new buyers quick to step up whenever others pull back. We leaned into this demand with an orchestrated strategy of theatrical output agreements, complementing our STARZ Pay One theatrical output deal with Pay Two output deals with Roku and Peacock and an output agreement with Tubi.
A Successful Growth Strategy at STARZ
In an ultracompetitive streaming environment, STARZ benefitted from a disciplined ramp in content investment and a focused content strategy, achieving strong subscriber growth while remaining profitable. Our investment delivered our most robust programming slate ever with new content nearly every week. We grew the Power Universe with the launch of the fourth hit series in the franchise, Power Book IV: Force, brought back fan favorite Outlander for a successful sixth season and launched star-driven properties Shining Vale with Courteney Cox and Greg Kinnear and Gaslit with Julia Roberts and Sean Penn to continue strengthening the STARZ brand. After the close of the fiscal year, P-Valley debuted to record numbers in its breakout second season, catapulting to one of the most widely viewed series on the STARZ platform.
STARZ's growth is being supported by recent major bundle deals with Disney in Latin America, Canal Plus in France and Viaplay in the Nordic territories. The fiercely premium SVOD focus of our content and the desirability of our core demos gives us confidence that STARZ will be bundled and packaged by a growing number of streaming platforms as the industry continues to evolve.
We're excited by the opportunities created by the strategic process we have undertaken to unlock value at STARZ and our studio. We're currently in negotiations with potential strategic partners and we're targeting an announcement of our plan by the end of the summer with a final transaction closing as early as our fiscal fourth quarter.
Maintained A Strong Balance Sheet
Though Fiscal 2022 marked our largest investment in content and marketing, we were able to fund the investment in our existing core businesses with our own positive adjusted free cash flow. We reduced net debt and ended the fiscal year with $371 million of cash and $1.25 billion of undrawn revolver. In a challenging economic environment, we will continue to be disciplined and focused in our content investment, explore ways to monetize non-core assets, streamline our operations, reduce overhead and cut costs in every part of our business.
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In closing, we are at a critical inflection point for our Company and our industry, mindful of the economic and competitive challenges around us. However, our ability to create evergreen content with lasting value is undiminished, our position as the largest independent content platform will continue to translate into exciting opportunities, and we remain on the right operational and strategic path to create long-term value for our shareholders.
Sincerely,
Jon Feltheimer | Michael Burns |
Chief Executive Officer | Vice Chair |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
- ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2022
OR
-
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period fromto
Commission File No.: 1-14880
LIONS GATE ENTERTAINMENT CORP.
(Exact name of registrant as specified in its charter)
British Columbia, Canada | N/A |
(State or Other Jurisdiction of | (I.R.S. Employer |
Incorporation or Organization) | Identification No.) |
250 Howe Street, 20th Floor | 2700 Colorado Avenue |
Vancouver, British Columbia V6C 3R8 | Santa Monica, California 90404 |
(877) 848-3866 | (310) 449-9200 |
(Address of Principal Executive Offices, Zip Code) Registrant's telephone number, including area code:
(877) 848-3866
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on Which | |||||
Title of Each Class | Trading Symbol(s) | Registered | |||
Class A Voting Common Shares, no par | |||||
value per share | LGF.A | New York Stock Exchange | |||
Class B Non-Voting Common Shares, no | |||||
par value per share | LGF.B | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes Í No ' Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934. Yes ' No Í
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes Í No '
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes Í No '
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | Í | Accelerated filer | ' |
Non-accelerated filer | ' | Smaller reporting company | ' |
Emerging growth company | ' |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. '
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Í
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ' No Í
The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of September 30, 2021 (the last business day of the registrant's most recently completed second fiscal quarter) was approximately $2,474,675,945, based on the closing sale price of such shares as reported on the New York Stock Exchange.
As of May 20, 2022, 83,272,113 shares of the registrant's no par value Class A voting common shares were outstanding, and 142,462,033 shares of the registrant's no par value Class B non-voting common shares were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive proxy statement relating to its 2022 annual meeting of shareholders (the " 2022 Proxy Statement") are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2022 Proxy Statement will be filed with the U.S. Securities and Exchange Commission (the "SEC") within 120 days after the end of the fiscal year to which this report relates. Portions of the Registrant's Annual Report on Form 10-K for Fiscal 2021, filed with the SEC on May 28, 2021, are incorporated by reference into Part II of this Annual Report on Form 10-K.
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Lions Gate Entertainment Corporation published this content on 28 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2022 22:03:13 UTC.
