Lions Gate Entertainment Corporation (LGF) always seeks strategic acquisitions and alliances to enhance its competitive position, maximize return and build a diversified portfolio for future growth. As a part of its ongoing strategy, the company recently entered into a television partnership with Thunderbird Films.
The new venture coined “Sea To Sky Entertainment,” will be engaged in producing programming for broadcast and cable networks targeting U.S. and Canadian commercial viewers. The production and distribution costs will be borne by Lions Gate and Thunderbird Films together.
Lions Gate is hopeful that the new partnership will definitely provide it with wider spectrum, help in producing program in a cost effective manner, and will considerably bode well for the ongoing diversification of its television business. On the other hand, the collaboration with Lions Gate is the initial step taken by Vancouver-based Thunderbird Films to enhance and diversify its television business activities.
Both Lions Gate and Thunderbird Films remain highly enthusiastic about their partnership, which encompasses many exciting projects in its periphery including a production and development deal with R.J. Cutler, the documentary filmmaker, and Callie Khouri, the writer; a limited series project on the upcoming book "An Uncommon Youth;" and a 60-minute drama from American author Dennis Lehane.
The deal with Lions Gate, provided an opportunity to Frank Giustra, the major stakeholder of Thunderbird Films, to again become a part and parcel of the company, where he has served for 6 years as the chairman from 1997 to 2003. Currently, Giustra is the President and CEO of Fiore Financial Corporation, and also spearhead Fiore Capital Corporation.
Thunderbird Films is a television production, distribution and financing corporation, and consists of more than 400 hours of U.S. and Canadian television programming content that are broadcast worldwide through cable, Internet and wireless networks.
Lions Gate is a film studio, producing and distributing motion pictures for theatrical and straight-to-video release and television programming for the cable and broadcast networks. To grab its share of box office receipts, Lions Gate competes with other major studios, such as Fox Entertainment Group, Paramount Motion Pictures Group and Time Warner Inc. (TWX).
In February 2012, Lions Gate posted third-quarter 2012 results. The company incurred a loss of one cent during the quarter, and missed the Zacks Consensus Estimate of earnings of 9 cents a share by a huge margin. But it showed an improvement over a net loss of 4 cents a share in the prior-year quarter.
Total revenue also dropped 23.6% to $323 million on account of no wide theatrical releases in the quarter, and fell short of the Zacks Consensus Estimate of $362 million. Motion Pictures revenue slid 28.6%, whereas Television Production revenue declined 6.8%.
Currently, we maintain our long-term Underperform recommendation on the stock, given its dismal quarterly performance and prefer to be on the sidelines untilwe witness top and bottom-line growth. However, Lions Gate retains a Zacks #3 Rank that translates into a short-term Hold rating, and well defines the strategic endeavors undertaken to put itself on the growth trajectory.
LIONS GATE ETMT (LGF): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment