Lionsgate (LION) Q1 FY27 earnings call: guidance and Q&A

What influences the success of IP, and what gives Lionsgate confidence in its film slate, especially with sequels/revivals?

Adam Fogelson explained that Lionsgate focuses on answering audience demand for specific characters or storylines, maintaining robust communication with fan bases, and making films for the right budget with the right filmmakers. He stated that their slate meets these threshold criteria.

“the lens that we're looking at with these projects is does the movie in question answer an audience demand or interest about a particular character or a particular storyline or when we invite the audience to think about an idea that they may never have considered, do they get excited.”

asked by Vikram Kesavabhotla · answered by Adam Fogelson

Discuss the potential impact of the Netflix Power deal on library value and the broader health/trend of the library business.

Jim Packer highlighted the strategic wins of the Netflix Power deal, noting its transformative potential for international growth and setting up future global opportunities with a 3-year term. He also mentioned other important series returning to distribution (Orange is the New Black, Mythic Quest, Mad Men) that will further boost the library.

“this is going to be transformative for the show and for the franchise. Netflix has an international footprint and the entire franchise is going to grow significantly, I think, because of that.”

asked by Vikram Kesavabhotla · answered by Jim Packer

Given press reports on M&A interest, how does Lionsgate view the consolidated media environment and its strategic position?

Michael Burns stated that Lionsgate has not engaged in substantive conversations regarding M&A speculation. He emphasized the company's strong IP and franchises, making it a compelling asset in a consolidating market, and highlighted its strategic optionality due to asset strength and operating performance.

“In spite of what the headline suggests, we haven't engaged in any substantive conversations. As a policy, we don't comment on M&A speculation. What I will say is this, given the strength and the breadth of our IP and our franchises, we remain one of the most compelling assets in a rapidly consolidating marketplace.”

asked by Omar Mejias Santiago · answered by Michael Burns

Is the strategic review for 3 Arts ongoing, and what are the fundamental trends in that business?

Brian Weinstein confirmed focus on potential strategic (not purely financial) transactions for 3 Arts. He noted strong operational momentum, particularly in new verticals like sports and creator content, and highlighted the robust collaboration between Lionsgate and 3 Arts, with roughly 30 shared projects. He also cited recent industry transactions reinforcing the value of talent representation businesses.

“we are focused and remain focused on potential transactions, but not ones that are purely financial. There's some interesting strategic elements in some of the deals we're looking at.”

asked by Brent Penter · answered by Brian Weinstein

What is the status and potential timing of the 'Michael' sequel, and how do the economics (e.g., using prior footage) impact the budget?

Adam Fogelson stated they are targeting a production start for the 'Michael' sequel towards the end of this year and early next, with a potential release between late calendar '27 and H1 '28. He confirmed that some big musical sequences shot previously could be incorporated, allowing for efficiency, but did not give specific budget guidance.

“we are targeting a production start towards the end of this year and early next. And think that somewhere between the end of calendar '27 and the first half of calendar '28 would be a current thought of roughly where the movie could go.”

asked by Brent Penter · answered by Adam Fogelson

How does the Paramount/Warner Bros. deal pause affect Lionsgate, and would Lionsgate be better off if it closes or not?

Jon Feltheimer stated that uncertainty and delay are bad for the business. He believes a better-financed, competitive streamer (like a bolstered Paramount+) would be positive for Lionsgate, leading to more original programming and library sales. He noted existing conversations about co-financing feature films and expressed favor for the transaction, but most importantly, for certainty.

“I would say for us, a more -- a better financed streamer, a competitive streamer will be better for us, better for us in terms of original programming, better for us in terms of selling library.”

asked by Brent Penter · answered by Jon Feltheimer

Elaborate on the TV demand paradigm shift and why Lionsgate's content resonates with streamers.

Kevin Beggs explained that the market has returned to active buying, and Lionsgate's 'secret sauce' is finding non-traditional ways to get shows on, such as fully funded sponsored series (DINKS with Publicis) or starting with international buyers (Trauma with Amazon Prime UK). He also highlighted the strength of their library and long-term strategy.

“I think our secret sauce is we're finding ways to get shows on in sometimes nontraditional ways, a fully funded sponsored series in DINKS, partnering with Amazon. And Publicis is a great example.”

asked by Sean Diffley · answered by Kevin Beggs

How is Lionsgate using AI to leverage IP, and what are the expected cost savings or creative unlocks?

Michael Burns stated that AI is a real opportunity for revenue growth and cost reduction in content production and operations, emphasizing responsible deployment with creative talent. Jon Feltheimer added that they are experimenting with AI in pre-production, post-production, and creating video versions of podcasts, noting that it's saving money and making them more efficient, with 95% employee adoption.

“Every single employee here at this company is trained in AI and is using a 95% adoption right now across the business. And every day, we find a more interesting use for it that can save us money or enhance revenue.”

asked by Sean Diffley · answered by Jon Feltheimer