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Ray Pride

By Ray Pride Pride@moviecitynews.com

Lions at the Lionsgate: an analyst says yes, Icahn

onoz_omg2.gifA multitude of emails in various inboxes this morning from “Richard Alan Incorporated Founder and CEO Richard A. Dorfman”‘s publicistas: he has strong opinions about investor Carl Icahn tearing down The House of SAW, after acquiring “4.1 million shares of Lions Gate [sic]Entertainment at a cost of just under $42 million. As a result, Icahn now owns a nearly 4% stake in the last remaining major independent film… and distribution company in the United States.” Specific analysis of Lionsgate’s valuation follows before Dorfman’s esteeming of the company’s many titles. his “Film Library For Dummies” explanation is a sturdy basic read, followed by this: “So, what is Lions Gate [sic] worth? … [I]t’s hard to say for sure other than that it’s going to be worth what the highest bidder is willing to pay for it in an arms length transaction. [We can] get some idea of its value based on [the fund controlled by] George Soros… stanley park.jpgone of the savviest investors in the world [acquiring] the DreamWorks library from Paramount for $900 million… [W]ith just 59 titles, it in no way comes close to having the breadth or depth of the 8,000 titles in Lions Gate’s [sicsic] would have to involve an auction to extract maximum value. This should be possible since there are likely to be plenty of potential bidders, including studios, cable operators and private equity players, all of whom could bid alone or… as part of a consortium. I suspect cable operators in particular will be eager to participate in the bidding since the Lions Gate [sic] library is well positioned to serve as the foundation for one or more new cable channels… “I would not be surprised to see Lions Gate [sic] bring $2 billion or more in a sale, which would translate into a stock price potentially in excess of $16 per share… [T]his conclusion is not based on any rigorous financial analysis. Instead, it reflects a common sense approach that takes into consideration the history and dynamics of recent transactions as well as the current state of the motion picture industry.”

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“Ten years ago at Telluride, I said on a panel that theatrical distribution was dying. It seemed obvious to me. I was surprised how many in the audience violently objected: ‘People will always want to go to the movies!’ That’s true, but it’s also true that theatrical cinema as we once knew it has died. Theatrical cinema is now Event Cinema, just as theatrical plays and musical performances are Events. No one just goes to a movie. It’s a planned occasion. Four types of Event Cinema remain.
1. Spectacle (IMAX-style blockbusters)
2. Family (cartoon like features)
3. Horror (teen-driven), and
4. Film Club (formerly arthouse but now anything serious).

There are isolated pockets like black cinema, romcom, girl’s-night-out, seniors, teen gross-outs, but it’s primarily those four. Everything else is TV. Now I have to go back to episode five of ‘Looming Tower.'”
~ Paul Schrader

“Because of my relative candor on Twitter regarding why I quit my day job, my DMs have overflowed with similar stories from colleagues around the globe. These peeks behind the curtains of film festivals, venues, distributors and funding bodies weren’t pretty. Certain dismal patterns recurred (and resonated): Boards who don’t engage with or even understand their organization’s artistic mission and are insensitive to the diverse neighborhood in which their organization’s venue is located; incompetent founders and/or presidents who create only obstacles, never solutions; unduly empowered, Trumpian bean counters who chip away at the taste and experiences that make organizations’ cultural offerings special; expensive PR teams that don’t bring to the table a bare-minimum familiarity with the rich subcultural art form they’re half-heartedly peddling as “product”; nonprofit arts organizations for whom art now ranks as a distant-second goal behind profit.”
~ Eric Allen Hatch