By David Poland firstname.lastname@example.org
He tried to take over the bloated Lionsgate many different ways. But company leadership and their board have had too good a time building the company to let Icahn come in and do what they haven’t be able to do… make it work for Wall Street.
And so they fought. They fought him off in every way possible. And when smart people get focused and the #1 focus of the organization is not being taken over by Carl Icahn, positive results can be achieved. And so they have.
Ironically, he was paid less that he was offering to pay for shares of the company. (I thought he’d hold out to get what he had offered others… but I guess he was done wasting his time trying to fight the immovable object.)
Lionsgate is a moderately successful studio and distributor of feature films with aging franchise titles, a nice sized TV division and a massive, massive library. Like MGM, they value the company much higher internally than the market does. And so, the opportunity to cash out on a high has never taken place.
A movie or two may be a huge or bomb… it doesn’t really matter. The company is much bigger than any movie (unless they get a Twilight or an Avatar).
So after two years of defensive maneuvering and years before that of doggy paddling, what is the future of this company?
I don’t know. And I don’t think anyone else really knows.
It’s still a tweener. Anyone who would ever buy it for an acceptable price to the management would have to sell pieces of it off to make it work for them. And clearly, management doesn’t like that idea. So it needs to get bigger or smaller.
“Bigger” was a bit of a disaster last year. But they can keep trying. If I were them, I would get very serious about streaming their library and making that work beyond the EPIX relationship. Even though they have more library product (and their complete TV library, which Par splits with CBS), they are living in Paramount’s shadow there. There is finally a real advantage – since the dawn of DVD – to having a very ling tail. Use it. The more expensive movie business… not so much.
“Smaller” means selling off some of the acquired holdings. Could try spinning off TV. Could turn the library into a separate business. Could make the production side even smaller.
I guess time will tell…