Q1 2025 Lions Gate Entertainment Corp Earnings Call

Also joining us on the call today are Vice Chairman Michael Burns, COO Brian Goldsmith, Chairman of the TV Group, Kevin Beggs, Chairman of the Motion Picture Group Adam Foglison and President of Worldwide TV and Digital Distribution Jim Packer.

Unknown Executive: Chairman of the TV Group, Kevin Beggs, Chairman of the Motion Picture Group, Adam Fogelson, and President of Worldwide TV and Digital Distribution, Jim Packer. And from STARS, we have President and CEO Jeffrey Hirsch, CFO Scott McDonald, and President of Domestic Networks, Allison Hoffman.

Kevin Beggs: Chairman of the TV Group, Kevin Beggs, Chairman of the Motion Picture Group, Adam Fogelson, and President of Worldwide TV and Digital Distribution, Jim Packer.

Speaker Change: And from STARS, we have President and CEO Jeffrey Hirsch, CFO Scott McDonald, and President of Domestic Networks Allison Hoffman.

Jeffrey Hirsch: And from stars, we have President and CEO Jeffrey Hirsch, CFO, Scott McDonald, and President of Domestic Networks, Alison Hoffman. The matters discussed on the call also include four looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the four looking statements as a result of various factors. This includes the risk factor set forth in our public filings for Lions Gate Studios Corp and for Lions Gate Entertainment Corp.

Unknown Executive: The matters discussed on the call also include four forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors. This includes the risk factors set forth in our public filings for Lions Gate Studios and for Lions Gate Entertainment. The companies undertake no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. I'll now turn the call over to Jon.

The matters discussed on the call also include four looking statements, including those regarding the performance of future fiscal years.

Unknown Executive: The company's undertake no obligation to publicly release the result of any revisions to these four looking statements that may be made to reflect any future events or circumstances.

Speaker Change: Such statements are subject to a number of risks and uncertainties.

Speaker Change: Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors.

Jon: This includes the risk factors set forth in our public filings for Lions Gate Studios Corp. and for Lions Gate Entertainment Corp. The companies undertake no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. I'll now turn the call over to Jon.

Jon Feltheimer: Thank you, Nilay, and good afternoon, everyone. Thank you for joining us. In an operating environment of unprecedented industry disruption that touches every part of our business, we delivered a solid quarter in spite of soft results from our television segment, primarily due to some residual impact from the strikes, as well as a heavily backloaded year. Our Motion Picture Group exceeded financial expectations, our library turned in another strong performance, and STARS achieved domestic OTT revenue and subscriber growth over the prior year quarter.

Jon Feltheimer: I'll now turn the call over to Jon. Thank you, Nilay, and good afternoon, everyone. Thank you for joining us in an operating environment of unprecedented industry disruption that touches every part of our business. We delivered a solid quarter in spite of soft results from our television segment, primarily due to some residual impact from the strikes, as well as a heavily backloaded year. Our Motion Picture Group exceeded financial expectations. Our library turned in another strong performance, and stars achieved domestic OTT revenue and subscriber growth over the prior year quarter. There are things in our environment over which we have little control, the impact of disruption on our buyers and distributors, market volatility, and the long tail of the strikes and the pandemic.

Jon: Thank you, Nilay, and good afternoon, everyone. Thank you for joining us.

Jon: In an operating environment of unprecedented industry disruption that touches every part of our business, we delivered a solid quarter in spite of soft results from our television segment, primarily due to some residual impact from the strikes, as well as a heavily backloaded year.

Jon: Our Motion Picture Group exceeded financial expectations, our library turned in another strong performance, and STARS achieved domestic OTT revenue and subscriber growth over the prior year quarter.

Jon Feltheimer: There are things in our environment over which we have little control, the impact of disruption on our buyers and distributors, market volatility, and the long tail of strikes and the pandemic. But there are also a number of things we can control, and today I want to talk about four in particular.

There are things in our environment over which we have little control, the impact of disruption on our buyers and distributors, market volatility, and the long tail of the strikes and the pandemic.

Jon: But there are also a number of things we can control, and today I want to talk about four in particular.

Jon Feltheimer: But there are also a number of things we can control, and today I want to talk about four in particular. First, executing our strategic plan. The separation of our studio business and stars will allow our two companies to pursue the strategic agendas that are right for them in the current environment, scale their respective businesses and focus investor intention on what makes them special and unique within their own ecosystems. Over the past several months, we've generated strong momentum towards full separation, raising over $300 million in gross proceeds from equity financing, completing a bond exchange agreement to strengthen the respective stars and studio balance sheets, and closing a $340 million IP back facility that is primarily collateralized by the E1 library.

Jon Feltheimer: First, executing our strategic plan. The separation of our studio business and STARS will allow our two companies to pursue the strategic agendas that are right for them in the current environment, scale their respective businesses, and focus investor intent on what makes them special and unique within their own ecosystems. Over the past several months, we've generated strong momentum towards full separation, raising over $300 million in gross proceeds from equity financing, completing a bond exchange agreement to strengthen the respective STARS and Studio balance sheets, and closing a $340 million IP-backed facility that is primarily collateralized by the E1 Library.

First, executing our strategic plan.

Speaker Change: The separation of our studio business and STARS will allow our two companies to pursue the strategic agendas that are right for them in the current environment, scale their respective businesses, and focus investor attention on what makes them special and unique within their own ecosystems.

Over the past several months, we've generated strong momentum towards full separation.

raising over $300 million in gross proceeds from equity financing, completing a bond exchange agreement to strengthen the respective STARS and Studio balance sheets, and closing a $340 million IP-backed facility that is primarily collateralized by the E1 Library.

Jon Feltheimer: In addition, as we said on our last earnings call, a special committee of the board has been formed to evaluate and recommend to the full board whether a collapse of the company's dual class share structure would be in the best interest of our shareholders, and if so, advise on the appropriate structure for putting it into effect. The Special Committee concluded that a single class of stock is in our shareholders' best interest and recommended collapsing our two classes into one with a 12% exchange premium for the A shareholder.

In addition, as we said on our last earnings call, a special committee of the board was formed to evaluate and recommend to the full board whether a collapse of the company's dual class share structure would be in the best interest of our shareholders, and if so, advise on the appropriate structure for putting it into effect.

Jon Feltheimer: In addition, as we said on our last earnings call, a special committee of the board is formed to evaluate and recommend to the full board whether a collapse of the company's dual-class share structure would be in the best interest of our shareholders, and if so, advise on the appropriate structure for putting it into effect. Special committee concluded that a single class of stock is in our shareholders best interest and recommended collapsing our two classes into one with a 12 percent exchange premium for the A shareholders.

Speaker Change: Special Committee concluded that a single class of stock is in our shareholders' best interest and recommended collapsing our two classes into one with a 12% exchange premium for the A shareholders.

Jon Feltheimer: This board-approved proposal, which will be included in the proxy statement that will be filed in connection with the separation and voted on by the shareholders of both classes of stock, is another critical milestone in achieving full separation by calendar year end, subject to the timing of normal regulatory approval. Second, creating great content and adapting our portfolio of world-class IP and franchises. We continue to put together theatrical release slates, driven by 3 to 4 tentpoles a year, beginning in Fiscal 2016. In the quarter, we announced that we will adapt Suzanne Collins' next Hunger Games book, Sunrise on the Reaping, into a major motion picture for release on November 20th, 2026.

This board approved proposal, which will be included in the proxy statement that will be filed in connection with the separation, and voted on by the shareholders of both classes of stock,

Jon Feltheimer: This board approved proposal which will be included in the proxy statement that will be filed in connection with the separation and voted on by the shareholders of both classes of stock is another critical milestone in achieving full separation by calendar year end. Subject to the timing of normal regulatory approvals.

Speaker Change: is another critical milestone in achieving full separation by calendar year-end, subject to the timing of normal regulatory approvals.

Speaker Change: Second, creating great content and adapting our portfolio of world-class IP and franchises.

Jon Feltheimer: Second, creating great content and adapting our portfolio of world-class IP and friends. We continue to put together theatrical release lights driven by three to four ten polls a year beginning in fiscal 26. In the quarter, we announce that we will adapt Suzanne Collins' next hunger games book, Sunrise on the Reeping, into a major motion picture for release on November 20th, 2026. We are wrapping principal photography on Graham King and Antoine Fuqua's Michael Jackson biopic, putting the finishing touches on the John Wick spin-off ballerina, starting production on Ruben Fleischer's new installment of the now you see me franchise and Francis Lawrence's adaptation of Stephen King's The Long Walk and readying Chad Stahelski's Highlander for a production start early next year.

Speaker Change: We continue to put together theatrical release slates driven by 3-4 tentpoles a year beginning in Fiscal 26.

In the quarter, we announced that we will adapt Suzanne Collins' next-hungry games book, Sunrise on the Reaping, into a major motion picture for release on November 20th, 2026.

Jon Feltheimer: We're wrapping principal photography on Graham King and Antoine Fuqua's Michael Jackson biopic, putting the finishing touches on the John Wick spinoff, Ballerina, and starting production on Ruben Fleischer's new installment of the Now You See Me franchise and Frances Lawrence's adaptation of Stephen King's The Long Walk. And readying Chad Stahelski's Highlander for a production start early next year, and television in a year with 70% of scripted delivery scheduled for the third and fourth quarters.

We are wrapping principle photography on Graham King and Antoine Fuqua's Michael Jackson Biopic.

Putting the finishing touches on the John Wick spin-off, Ballerina.

Speaker Change: Starting production on Reuben Fleischer's new installment of the Now You See Me franchise and Frances Lawrence's adaptation of Stephen King's The Long Walk. And readying Chad Stahelski's Highlander for a production start early next year.

Speaker Change: In television, in a year with 70% of scripted delivery scheduled for the 3rd and 4th quarters,

Jon Feltheimer: In television, in a year with 70% of scripted delivery scheduled for the third and fourth quarters, the good news is that nearly all of these series are already ordered in production and on schedule. These shows include signature big shows like Spartacus House of Asher and The Hunting Wives for Stars, Seth Rogan's the studio for Apple TV Plus, and the seventh season of The Rookie for ABC. And new businesses picked up significantly with a total of 15 new series ordered and current series renewed to network pilots picked up and more than 30 projects sold into development.

Jon Feltheimer: The good news is that nearly all of these series are already ordered, in production, and on schedule. These include signature big shows like Spartacus, House of Asher, and The Hunting Wives for Starz, Seth Rogen's The Studio for Apple TV+, and the seventh season of The Rookie for ABC. And new business has picked up significantly, with a total of 15 new series ordered and current series renewed, two network pilots picked up, and more than 30 projects sold into development. At Starz, our content performed well in the quarter, with Ghost Season 4 opening to over 6.5 million multi-platform viewers in its premiere week and achieving strong in-season growth.

The good news is that nearly all of these series are already ordered, in production, and on schedule.

Speaker Change: These shows include signature big shows like Spartacus, House of Asher, and The Hunting Wives for Starz, Seth Rogen's The Studio for Apple TV+, and the seventh season of The Rookie for ABC.

and New Businesses picked up significantly with a total of 15 new series ordered and current series renewed to network pilots picked up and more than 30 projects sold into development.

Speaker Change: At Stars, our content performed well in the quarter with Ghost Season 4, opening to over 6.5 million multi-platform viewers in its premiere week and achieving strong in-season growth.

Jon Feltheimer: At stars, our content performed well in the quarter with Ghost Season 4, opening to over 6.5 million multi-platform viewers in its premiere week and achieving strong in-season growth. With raising Canaan and Outlander engaging both of our audience cohorts in the back half of the year, and with a rate increase rolling out in Q2, we expect to resume sequential quarter North American OTT subscriber growth in Q3. Looking ahead to our fiscal 26th slate, we'll continue to look at the future of the future of the season.

Jon Feltheimer: With Raising Canaan and Outlander engaging both of our audience cohorts in the back half of the year, and with a rate increase rolling out in Q2, we expect to resume sequential quarter North American OTT subscriber growth in Q3. Looking ahead to our fiscal 26th slate, we'll continue to execute on a focused content strategy in which we are complementing our returning 10-pulse series with high-profile new series like The Hunting Wives, Spartacus, the Outlander prequel Blood of My Blood, an array of female-focused third-party acquisitions, and a strong slate of studio features, creating business models that generate new areas of growth. By rolling out a suite of Lions Gate Fast Channels, including Moviesphere, the first fast channel to be rated by Nielsen, and 50 Cent Action, in partnership with Curtis 50 Cent Jackson.

with Raising Canaan and Outlander engaging both of our audience cohorts in the back half of the year.

and with a rate increase rolling out in Q2, we expect to resume sequential quarter North American OTT subscriber growth in Q3.

Looking ahead to our fiscal 26th slate.

We'll continue to execute on a focused content strategy in which we are complementing our returning 10-pulse series with high-profile new series like The Hunting Wives,

Jon Feltheimer: We'll continue to execute on a focus content strategy in which we are complementing our returning 10-pole series with high-profile new series like The Hunting Wives, Spartacus, The Outlander Prequel, Blood of My Blood, an array of female focus, third-party acquisitions, and a strong slate of studio features.

Spartacus, the Outlander Prequel blood of my blood, an array of female focus, third party acquisitions, and a strong slate of studio features.

Jon Feltheimer: Third, creating business models that generate new areas of growth by rolling out a suite of Lionsgate fast channels, including Movie Spear, the first fast channel to be rated by Nielsen, and 50 Cent Action in partnership with Curtis, 50 Cent Jackson. We're controlling and monetizing opportunistic windows that, together with our avod business, generate over $100 million in annual revenue. Stars, two strong core demos make it a bundling partner of choice in its wholesale and direct-to-consumer businesses.

3rd.

Speaker Change: Creating business models that generate new areas of growth. By rolling out a suite of Lions Gate Fast Channels, including Moviesphere, the first fast channel to be rated by Nielsen, and 50 Cent Action, in partnership with Curtis 50 Cent Jackson.

Jon Feltheimer: We're controlling and monetizing opportunistic windows that, together with our AVOD business, generate over $100 million in annual revenue. Starr's two strong core demos make it a bundling partner of choice in its wholesale and direct-to-consumer business. This afternoon, I'm pleased to announce that Starz and BritBox, the BBC Studios-owned streaming service, are launching a new bundle next quarter to offer their respective apps directly through Starz.com. By leveraging its advanced tech stack, Starz is enabling the creation of a compelling and complementary offering that pairs Starz hits like Outlander and The Serpent Queen with BritBox's unmatched collection of original series, such as Vera, Shetland, and Blue Lights, alongside iconic library classics like Downton Abbey and Killing Eve.

Speaker Change: We're controlling and monetizing opportunistic windows that, together with our AVOD business, generate over $100 million in annual revenue. STAR's two strong core demos make it a bundling partner of choice in its wholesale and direct-to-consumer businesses.

Speaker Change: This afternoon, I'm pleased to announce that Stars and Britbox, the BBC Studios-owned streaming service, are launching a new bundle next quarter to offer their respective apps directly through Stars.com by leveraging its advanced tech stack.

Jon Feltheimer: This afternoon, I'm pleased to announce that Stars and Britbox, the BBC Studios owned streaming service, are launching a new bundle next quarter to offer their respective apps directly through Stars.com. By leveraging its advanced tech stack, Stars is enabling the creation of a compelling and complimentary offering that pairs Stars' hits like Outlander and the Serpent Queen with Britbox's unmatched collection of original series, such as Vera, Shetland, and Blue Lights, alongside iconic library classics like Downton Abbey and Killing Eve.

Starz is enabling the creation of a compelling and complimentary offering that pairs Starz hits like Outlander and The Serpent Queen with Britbox's unmatched collection of original series.

Speaker Change: Such as Vera, Shetland, and Blue Lights, alongside iconic library classics like Downton Abbey and Killing Eve. At a time when our traditional buyers are being disciplined around their budgets.

Jon Feltheimer: At a time when traditional buyers are being disciplined around their budgets... Our television group is pivoting to shows with efficient business models and production for new buyers, like The Rainmaker for USA, two new series for Hallmark, and an array of international co-productions, increasing our universe of potential buyers by as much as 50%. We announced during the quarter that former CAA and Bad Robot executive Bryan Weinstein had been named co-CEO of our leading talent management and production company, 3Arts Entertainment, and strategic advisor to the office of the CEO at Lions Gate.

Jon Feltheimer: At a time when our traditional buyers are being disciplined around their budgets, our television group is pivoting to shows with efficient business models and production for new buyers, like the Rainmaker for UFA, two new series for Hallmark, and an array of international co-productions, increasing our universe of potential buyers by as much as 50%.

Our television group is pivoting to shows with efficient business models and production for new buyers, like The Rainmaker for USA.

Speaker Change: Two new series for Hallmark.

and an array of international co-productions, increasing our universe of potential buyers by as much as 50%.

Jon Feltheimer: He joins co-CEO Michael Rotenberg and the other 3Arts partners in executing a focused and accelerated growth strategy to extend 3Arts into new areas of representation. Under our new Motion Picture Group leadership, our Global Products and Experiences Group is expanding its portfolio of properties and accelerating the monetization of ancillary and derivative opportunities for our franchise properties, with 13 Broadway shows in the pipeline, including adaptations of some of our most important IP. Exciting progress towards the launch of our John Wick AAA game, a new John Wick experience opening soon in Las Vegas, and a number of high-profile licensing initiatives around the world.

Jon Feltheimer: We announced during the quarter that former CAA and bad robot executive Brian Weinstein had been named co-CEO of our leading talent management and production company, three arts entertainment, and strategic advisor to the Office of the CEO at Lions. He joins co-CEO Michael Rotenberg and the other three arts partners in executing a focused and accelerated growth strategy to extend three arts into new areas of representation Under our new motion picture group leadership, our global products and experiences group is expanding its portfolio of properties and accelerating the monetization of ancillary and derivative opportunities for our franchise properties.

Speaker Change: We announced during the quarter that former CAA and Bad Robot executive Brian Weinstein had been named co-CEO of our leading talent management and production company, 3Arts Entertainment, and strategic advisor to the office of the CEO at Lions Gate.

He joins co-CEO Michael Rotenberg and the other 3Arts partners in executing a focused and accelerated growth strategy to extend 3Arts into new areas of representation.

Speaker Change: Under our new Motion Picture Group leadership, our Global Products and Experiences Group is expanding its portfolio of properties and accelerating the monetization of ancillary and derivative opportunities for our franchise properties.

with 13 Broadway shows in the pipeline, including adaptations of some of our most important IP.

Jon Feltheimer: With 13 Broadway shows in the pipeline, including adaptations of some of our most important IP, exciting progress towards the launch of our John Wick AAA game, a new John Wick experience opening soon in Las Vegas, and a number of high profile licensing initiatives in the works.

Speaker Change: Exciting progress towards the launch of our John Wick AAA game, a new John Wick experience opening soon in Las Vegas, and a number of high-profile licensing initiatives in the works. We expect to begin seeing a meaningful uptick in revenue later this year.

Jon Feltheimer: We expect to begin seeing a meaningful uptick in revenue later this year, and finally, Cutting Cod. Lions Gate is already one of the leanest companies at scale in the media business, but here are just a few of the things we're doing to become even leaner. In television, we're reducing the number of combined Lions Gate and E1 producer deals by 70%, with $30 million in projected annual savings.

Jon Feltheimer: We expect to begin seeing a meaningful uptick and revenue later this year, and finally, cutting costs. Lions Gate is already one of the leanest companies that scale in the media business, but here there are just a few of the things we're doing to become even leaner. In television, we're reducing the number of combined Lions Gate and E1 producer deals by 70%, with $30 million in projected annual savings. As we complete the integration of E1, we're reducing GNA and remain on track for our operational and financial targets.

Speaker Change: and finally, Cutting Costs.

Speaker Change: Lions Gate is already one of the leanest companies at scale in the media business.

But here are just a few of the things we're doing to become even leaner. In television, we're reducing the number of combined Lions Gate and E1 producer deals by 70%, with $30 million in projected annual savings.

Jimmy: As we complete the integration of E1, we're reducing GNA and remaining on track for our operational and financial targets. Within our Motion Picture Group, we have flattened the organizational structure and reallocated overhead from non-core activities to support the ramp of our film output, with a laser focus on marketing and distribution expenses. In our real estate operations, we've consolidated offices and expect to reduce lease expenses by 30% on a pro forma basis over a three-year period, and we're currently analyzing AI applications to our business, everything from more efficient library utilization and production and marketing benefits to broader G&A efficiencies in order to continue to take costs out of the business.

As we complete the integration of E1, we're reducing GNA and remain on track for our operational and financial targets.

Jon Feltheimer: Within our motion picture group, we have flattened the organizational structure and reallocated overhead from non-core activities to support the ramp of our film output, with a laser focus on marketing and distribution expenses. In our real estate operations, we've consolidated offices and expect to reduce lease expenses by 30% on a pro-forma basis over a three-year period. And we're currently analyzing AI applications to our business in everything for more efficient library utilization and production and marketing benefits to broader GNA efficiencies in order to continue to take cost out of the business.

Speaker Change: Within our Motion Picture Group, we have flattened the organizational structure and reallocated overhead from non-core activities to support the ramp of our film output, with a laser focus on marketing and distribution expenses.

Speaker Change: In our real estate operations, we've consolidated offices and expect to reduce lease expenses by 30% on a pro forma basis over a three-year period.

And we're currently analyzing AI applications to our business in everything from more efficient library utilization and production and marketing benefits to broader G&A efficiencies in order to continue to take costs out of the business.

Jimmy: In closing, there are many reasons why I remain bullish about the long-term prospects of our business. The domestic box office is rebounding just as we prepare one of our strongest film slates for fiscal 26. Our television group continues to lean into its portfolio of companies to generate content for old and new buyers alike. Starz has grown its North American OTT subscribers and revenue from the prior year quarter, increased ARPU, decreased churn, and remained profitable as it continues its transition to a predominantly digital future. Management and production leader, with a strong growth trajectory ahead of him, and we're continuing to put together all of the pieces for a value-defining separation of the studio and stars by the end of the calendar year.

Speaker Change: In closing, there are many reasons why I remain bullish about the long-term prospects of our business.

Jon Feltheimer: In closing, there are many reasons why I remain bullish about the long-term prospects of our business. The domestic box office is rebounding just as we prepare one of our strongest film slates for fiscal 26. Our television group continues to lean into its portfolio of companies to generate content for old and new buyers alike. Stars has grown its North American OTT subscribers and revenue from the prior year quarter, increased RPU, decreased churn and remained profitable as it continues its transition to a predominantly digital future.

Speaker Change: The Domestic Box Office is rebounding just as we prepare one of our strongest film slates for Fiscal 26.

Speaker Change: Our television group continues to lean into its portfolio of companies to generate content for old and new buyers alike. Starz has grown its North American OTT subscribers and revenue from the prior year quarter.

Speaker Change: increased ARPU, decreased churn, and remained profitable as it continues its transition to a predominantly digital future.

Speaker Change: 3Arts is a talent management and production leader with a strong growth trajectory ahead of it and we're continuing to put together all of the pieces for a value-defining separation of the studio and stars by the end of the calendar year.

Jon Feltheimer: Three arts is a talent management and production leader, with a strong growth trajectory ahead of it. And we're continuing to put together all of the pieces for a value-defining separation of the studio and stars by the end of the calendar year. I would note that in terms of our financial projections for the year, we have some ground to make up after the first quarter, and our back-loaded slates leave us less margin for error than usual. However, amidst this disruptive environment, the one thing you can be sure of is that we will continue to adapt, pivot and innovate in order to meet our challenges and create value for our share.

Jimmy: I would note that in terms of our financial projections for the year, we have some ground to make up after the first quarter, and our backloaded slates leave us less margin for error than usual, but amidst this disruptive environment, the one thing you can be sure of is that we will continue to adapt, pivot, and innovate in order to meet our challenges and create value for our shareholders. Now I'll turn things over to Jimmy.

Speaker Change: I would note that, in terms of our financial projections for the year, we have some ground to make up after the first quarter, and our backloaded slates leave us less margin for error than usual.

Speaker Change: However, amidst this disruptive environment, the one thing you can be sure of is that we will continue to adapt, pivot, and innovate in order to meet our challenges and create value for our shareholders.

Jimmy: Thanks, Jon, and good afternoon, everyone. I'll briefly discuss our first quarter financial results and provide an update on the balance sheet. For the quarter, Lions Gate's consolidated revenue was $835 million, adjusted OEBDA was $105 million, and operating income was $19 million. Revenue was down 8%, while adjusted OEBDI was up 22% year over year. Reported fully diluted earnings per share was a loss of $0.25 per share, and fully diluted adjusted earnings per share was a positive $0.09 per share. Net cash flows used in operating activities was $159 million, while use of adjusted free cash flow for the quarter was $89 million.

Unknown Executive: Golders.

Speaker Change: Now I'll turn things over to Jimmy. Thanks, Jon, and good afternoon, everyone. I'll briefly discuss our first quarter financial results and provide an update on the balance sheet.

Unknown Executive: Now I'll turn things over to Jimmy.

Jim Packer: Thanks, Jon, and good afternoon everyone. I'll briefly discuss our first quarter financial results and provide an update on the balance sheet. For the quarter, Lions Gate's consolidated revenue was $835 million, adjusted to EBITDA was $105 million, and operating income was $19 million. Revenue was down 8% while adjusted to EBITDA was up 22% year-over-year. Reported fully diluted earnings per share was a loss of 25 cents per share, and fully diluted adjusted earnings per share was a positive $0.9 per share.

Jimmy: For the quarter, Lions Gate's consolidated revenue was $835 million, adjusted OEBDA was $105 million, and operating income was $19 million.

Speaker Change: Revenue was down 8% while adjusted OEBDI was up 22% year-over-year.

Speaker Change: reported fully diluted earnings per share was a loss of $0.25 per share and fully diluted adjusted earnings per share was a positive $0.09 per share. Net cash flows used in operating activities was $159 million while use of adjusted free cash flow for the quarter was $89 million.

Jim Packer: Net cash flows used in operating activities was $159 million, while use of adjusted free cash flow for the quarter was $89 million. Notwithstanding some of the strong industry headwinds affecting television, we are reiterating our previously announced fiscal 25 adjusted to EBITDA outlook for the studio and stars. Starting with studio, we continue to forecast adjusted to EBITDA, which we define as studio segment profit less corporate GNA to be $430 million. However, with a slower than anticipated post-strike recovery of our television business and inherent variability in our television releases over the remainder of the fiscal year, we recognize we have a larger task in front of us.

Jimmy: Notwithstanding some of the strong industry headwinds affecting television, we are reiterating our previously announced Fiscal 25 Adjusted OEBDI Outlook for the Studio and Star. Starting with the Studio, we continue to forecast adjusted OEBDA, which we define as Studio Segment Profit Less Corporate G&A, to be $430 million. However, with a slower than anticipated post-strike recovery of our television business and inherent variability in our television releases over the remainder of the fiscal year, we recognize we have a larger task in front of us. As Jon noted in his prepared remarks, we are already proactively taking several steps to adapt to the changing environment, and we will continue to provide updates on our studio outlook as the year progresses.

Speaker Change: Notwithstanding some of the strong industry headwinds affecting television, we are reiterating our previously announced Fiscal 25 Adjusted Web at Eye Outlook for the studio and stars.

Speaker Change: Starting with Studio, we continue to forecast adjusted OEBDA, which we define as Studio Segment Profit Less Corporate G&A, to be $430 million.

Speaker Change: However, with a slower than anticipated post-strike recovery of our television business and inherent variability in our television releases over the remainder of the fiscal year, we recognize we have a larger task in front of us.

Speaker Change: As Jon noted in his prepared remarks, we are already proactively taking several steps to adapt to the changing environment, and we will continue to provide updates on our studio outlook as the year progresses.

Jim Packer: As Jon noted and is prepared remarks, we are already proactively taking several steps to adapt to the changing environment, and we will continue to provide updates on our studio outlook as the year progresses. Regarding stars outlook, we continue to anticipate that the North American business will generate 200 million plus of adjusted to EBITDA in fiscal 2025. Now, let me briefly discuss the fiscal first quarter performance of our studio and media networks businesses compared to the previous year quarter.

Jimmy: Regarding STARS Outlook, we continue to anticipate that the North American business will generate $200 million-plus of adjusted WebBI in fiscal 2025. Now, let me briefly discuss the fiscal first quarter performance of our studio and media networks businesses compared to the previous year. Starting with the studio business, quarterly revenue declined 6% year over year to $588 million, while studio adjusted oebida declined 6% to $58 million. Trailing 12-months library revenue of $882 million was largely in line with past year's Q1 trailing 12-months revenue as organic library strength and two-quarters of E1 library contribution largely offset the benefit of Schitt's Creek in last year's numbers. Breaking down the studio business, let's start with the motion picture.

Jon: Regarding STARS Outlook, we continue to anticipate that the North American business will generate $200 million plus of adjusted OEBDI in fiscal 2025.

Jimmy: Motion picture revenue for the quarter was $347 million, while segment profit was $86 million. Revenue expectedly declined on a difficult comparison to last year's favorable theatrical release of John Wick 4, while segment profit was up 24% due to lower P&A spend and content amortization. Moving on to TV, quarterly television revenue of $241 million was up 10% year-over-year with contribution from E1's The Rookie Season 6 and A Gentleman in Moscow. However, segment profit of $11 million was down year over year due to the strike's lingering impact on both episodic deliveries in our scripted and unscripted businesses, as well as commissions in our talent management.

Speaker Change: Now, let me briefly discuss the fiscal first quarter performance of our Studio and Media Networks businesses compared to the previous year quarter.

Speaker Change: Starting with the studio business quarterly revenue to climb 6% year over year to $588 million. While studio had just did a webinar to climb 6% to 58 million dollars.

Jim Packer: Starting with the studio business quarterly revenue declined 6% year over year to $588 million, while studio adjusted to EBITDA declined 6% to $58 million. Trailing 12 months library revenue of $882 million was largely in line with the past year's Q1 trailing 12 months revenue as organic library strength and two quarters of E1 library contribution largely offset the benefit of Schitt's Creek and last year's number. Breaking down the studio business, let's start with motion pictures.

Speaker Change: Trailing 12 months library revenue of $882 million was largely in line with the past year's Q1 trailing 12 months revenue as organic library strength and two-quarters of E1 library contribution largely offset the benefit of Schitt's Creek in last year's number.

Speaker Change: Breaking down the studio business, let's start with motion pictures.

Jim Packer: Motion picture revenue for the quarter was $347 million, while segment profit was $86 million. Revenue expectedly declined on a difficult comparison to last year's favorable theatrical release of John Wick 4, while segment profit was up 24% due to lower P&A spend and content amortization. Moving on to TV, quarterly television revenue of $241 million was up 10% year over year with contribution from E1's the rookie season 6 and a gentleman in Moscow. Segment profit of $11 million was down year over year due to the strike's lingering impact on both episodic deliveries and our scripted and unscripted businesses as well as commissions and our talent management.

Speaker Change: Motion picture revenue for the quarter was $347 million, while segment profit was $86 million.

Speaker Change: Revenue expectedly declined on a difficult comparison to last year's favorable theatrical release of John Wick 4, while segment profit was up 24% due to lower P&A spend and content amortization.

Speaker Change: Moving on to TV, quarterly television revenue of $241 million was up 10% year-over-year with contribution from E1's The Rookie Season 6 and A Gentleman in Moscow.

Speaker Change: Segment profit of $11 million was down year-over-year due to the strike's lingering impact on both episodic deliveries in our scripted and unscripted businesses, as well as commissions in our talent management business.

Jimmy: Media Network's quarterly revenue was $350 million, and segment profit was $58 million. Revenue was expectedly down year over year due to the exit from substantially all of our international markets, which was largely completed over the course of fiscal 2024, although with the exit from the U.K. complete.

Speaker Change: Media Network's quarterly revenue was $350 million and segment profit was $58 million.

Jim Packer: Management Business. Media Network's quarterly revenue was $350 million in segment profit with $58 million. Revenue was expectedly down year over year due to the exit from substantially all of our international markets, which was largely completed over the course of fiscal 2024. With the exit from the UK complete, stars is exclusively focused on the strength of its North American business. As such, I will focus my comments today on stars North American financial performance and subscriber trends.

Speaker Change: Revenue was expectedly down year over year due to the exit from substantially all of our international markets, which was largely completed over the course of fiscal 2024.

Jimmy: Starz is exclusively focused on the strength of its North American business. As such, I will focus my comments today on Starz North American financial performance and subscriber trends. Quarterly North American revenue of $345 million was up 1% year-over-year on growth in OTT subscribers and an increase in ARPU. STARS will be implementing a $1 price increase across its U.S. subscriber base in the next few weeks, which we expect to further drive ARPU and revenue growth.

Speaker Change: With the exit from the U.K. complete, Starz is exclusively focused on the strength of its North American business.

Speaker Change: As such, I will focus my comments today on Starz North American financial performance and subscriber trends.

Speaker Change: Quarterly North American revenue of $345 million was up 1% year-over-year on growth in OTT subscribers and an increase in ARPU.

Jim Packer: Quarterly North American revenue of $345 million was up 1% year over year on growth in OTT subscribers and an increase in R-Poo. Stars will be implementing a $1 price increase across the US subscriber base in the next few weeks, which we expect to further drive R-Poo in revenue growth. North American segment profit of $59 million was up 54% year over year driven by lower original content amortization, partially offset by higher pay one film cost.

Speaker Change: STARS will be implementing a $1 price increase across the U.S. subscriber base in the next few weeks, which we expect to further drive ARPU and revenue growth.

Jimmy: North American segment profit of $59 million was up 54% year-over-year, driven by lower original content amortization, partially offset by higher pay-one-film costs. Looking briefly at subscriber trends, Star ended the quarter with 13.2 million North American OTT subscribers, up 6% year-over-year. We ended the quarter with 21.3 million total North American subscribers, which represents a sequential decline of 500,000, primarily due to the decline in linear.

Speaker Change: North American segment profit of $59 million was up 54% year-over-year, driven by lower original content amortization, partially offset by higher pay-one-film costs.

Speaker Change: Looking briefly at subscriber trends, stars ended the quarter with 13.2 million North American OTT subs, up 6% year-over-year.

Jim Packer: Looking briefly at subscriber trends, stars ended the quarter with 13.2 million North American OTT subs up 6% year over year. We ended the quarter with 21.3 million total North American subscribers, which represents sequential decline of 500,000 primarily due to the decline in linear.

Speaker Change: We ended the quarter with 21.3 million total North American subscribers, which represents a sequential decline of 500,000 primarily due to the decline in linear.

Jimmy: Now, let's take a look at the balance sheet. We ended the quarter with $2 billion of net debt at the Consolidated Company, which reflects reductions in net debt to $1.4 billion at Studio and $625 million at Starz. The $2 billion net debt level includes the proceeds from the Lions Gate Studios capital raise, as well as the quarter's use of cash stemming from the post-strike increase in content spend. Excluding adjusted OEBDA from exited Lions Gate Plus territories and inclusive of the $60 million of projected run rate contribution from E1, both consolidated Lions Gate and standalone Lions Gate Studios leverage was 3.9 times, while standalone Starz leverage declined to 2.8 times on positive adjusted free cash flow.

Speaker Change: Now let's take a look at the balance sheet. We ended the quarter with $2 billion of net debt at the Consolidated Company, which reflects reductions in net debt to $1.4 billion at Studio and $625 billion at Starz.

Jim Packer: Now let's take a look at the ballot sheet. We ended the quarter with $2 billion net debt at the consolidated company, which reflects reductions in net debt to $1.4 billion at studio and $625 million at stars. The $2 billion net debt level includes the proceeds from the Lansgate Studios capital raise, as well as the quarter's use of cash stemming from the post-strike increase in content spin. Excluding adjusted to EBITDA from Exited Lansgate plus territories and inclusive of the $60 million of projected run rate contribution from E1, both consolidated Lansgate and standalone Lansgate Studios leverage was 3.9 times, while standalone stars leverage declined the 2.8 times on positive adjusted free cash flow.

Speaker Change: The $2 billion net debt level includes the proceeds from the Lions Gate Studios capital raise, as well as the quarter's use of cash stemming from the post-strike increase in content spend.

Speaker Change: Excluding adjusted EBITDA from exited Lions Gate Plus territories and inclusive of the $60 million of projected run rate contribution from E1, both consolidated Lions Gate and standalone Lions Gate Studios leverage was 3.9 times

Speaker Change: while standalone stars leverage declined to 2.8 times on positive adjusted free cash flow.

Jimmy: As we prepare for full separation by the end of calendar year 2024, we continue to make progress on establishing the stand-alone capital structures for both Lions Gate Studios and, Subsequent to the end of the quarter, we closed a $340 million dollar IP-backed loan facility supported by the E-1 library. This facility is favorably priced, so at plus 225 basis points, and travels with Lions Gate Studios upon separation. Coupling this financing with our previously announced bond exchange further demonstrates that we can attractively round out remaining refinancings at Starz and Lions Gate Studios in conjunction with the full separation.

Speaker Change: As we prepare for full separation by the end of calendar year 2024, we continue to make progress on establishing the stand-alone capital structures for both Lions Gate Studios and STARS.

Jim Packer: As we prepare for full separation by the end of calendar year 2024, we continue to make progress on establishing the standalone capital structures for both Lansgate Studios and stars. Subsequent to the end of the quarter, we closed a $340 million IP back loan facility supported by the E1 library. This facility is favorably priced so far plus 225 basis points and travels with the Lansgate Studios upon separation. Coupling this financing with our previously announced bond exchange further demonstrates that we can attractively round out remaining refinancings at stars and Lansgate Studios in conjunction with the full separation.

Speaker Change: Subsequent to the end of the quarter, we closed a $340 million dollar IP-backed loan facility supported by the E-1 library.

Speaker Change: This facility is favorably priced, so for plus 225 basis points, and travels with the Lions Gate Studios upon separation.

Speaker Change: Coupling this financing with our previously announced bond exchange further demonstrates that we can attractively round out remaining refinancings at Stars and Lions Gate Studios in conjunction with the full separation.

Jimmy: The bond exchange allows $325 million of 5.5% coupon bonds due in 2029 to stay at STARS, while the remaining bonds will travel to the studio at a 6% coupon with an extended maturity to 2030, creating a balanced allocation of attractively priced fixed-rate, long-term bonds across both capital structures.

Speaker Change: The bond exchange allows $325 million of 5.5% coupon bonds due in 2029 to stay at STARS, while the remaining bonds will travel to the studio at a 6% coupon with an extended maturity to 2030.

Jim Packer: The bond exchange allows $325 million of 5.5% coupon bonds due in 2029 to stay at stars. While the remaining bonds will travel to the studio at a 6% coupon with an extended maturity to 23rd. Committee, creating a balanced allocation of attractively priced fixed rate long-term bonds across both capital structures. Looking forward to the remainder of fiscal 25, as we noted before, we continue to forecast that the consolidated companies adjusted to EBITDA and adjusted free cash flow will be second half weighted.

Speaker Change: Creating a balanced allocation of attractively priced, fixed-rate, long-term bonds across both capital structures.

Jimmy: Looking forward to the remainder of Fiscal 25, as we noted before, we continue to forecast that the Consolidated Company's adjusted OEBDI and adjusted free cash flow will be second-half weighted, driven by a significant increase in television deliveries, post-theatrical slate cash flows, STARS price increase, and a return to OTT subscriber growth. However, the second quarter is expected to include six wide theatrical releases, which will result in an increase in P&A, while STARS is expected to have higher content amortization related to the timing of originals, pay 1, and pay 2 releases.

Speaker Change: Looking forward to the remainder of Fiscal 25.

Speaker Change: As we noted before, we continue to forecast that the Consolidated Company's adjusted OEBDI and adjusted free cash flow will be second-half weighted.

Speaker Change: Driven by a significant increase in television deliveries, post-theatrical slate cash flows, Starz price increase, and a return to OTT subscriber growth.

Jim Packer: Driven by a significant increase in television deliveries, post theatrical slate cash flows, stars price increase, and a return to OTT subscriber growth. However, the second quarter is expected to include six wide theatrical releases, which result in an increase in PNA, while stars is expected to have higher content amortization related to the timing of originals, pay one and pay two releases. As such, we expect leverage at both Lions Gate studios and stars to increase in the second quarter before returning to levels closer to three times by the end of the day.

Speaker Change: However, the second quarter is expected to include six wide theatrical releases, which will result in an increase in P&A, while STARS is expected to have higher content amortization related to the timing of originals, pay 1 and pay 2 releases.

Jimmy: As such, we expect leverage at both Lions Gate Studios and S.T.A.R.S. to increase in the second quarter before returning to levels closer to three times by the end of the fiscal year. Now, I'd like to turn the call over to Nilay for Q&A. Thanks, Jimmy.

Speaker Change: As such, we expect leverage at both Lions Gate Studios and S.T.A.R.S. to increase in the second quarter before returning to levels closer to three times by the end of the fiscal year.

Nilay Shah: Thanks, Jimmy. Operator, can we open the call up for Q&A?

Speaker Change: Now I'd like to turn the call over to Nilay for Q&A.

Nilay: Thanks, Jimmy. Operator, can we open the call up for Q&A?

Operator: We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble a roster. This question comes from Thomas Yeh with Morgan Stanley. Please go ahead.

Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone.

Unknown Executive: We will now begin the question and answer session. To ask a question, you may press star then one on the attached tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been answered, and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble a roster.

Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2.

Speaker Change: At this time, we will pause momentarily to assemble a roster.

Speaker Change: This question comes from Thomas Yeh with Morgan Stanley . Please go ahead.

Kevin Beggs: Question comes from Thomas, with Morgan Stanley. Please go ahead. Thanks so much. I wanted to touch base on the television delivery comments. There has certainly been a lot of moving industry pieces from your buyers and an ongoing focus on rationalization. I know there's a strike timing element to it as well. Is that the former component of that driving anything in terms of how it's impacting your discussions? Can you maybe just talk a little bit about what you're seeing in the industry landscape in terms of the buyer appetite for new orders?

Thomas Yeh: Thanks so much. I wanted to touch base on the television delivery comments. There's certainly been a lot of moving industry pieces from your buyers and an ongoing focus on rationalization. I know there's a strike timing element to it as well. Is that, is the former component of that driving anything in terms of how it's impacting your discussions, and can you maybe just talk a little bit about what you're seeing in the industry landscape in terms of the buyer appetite for

Thomas Yeh: Thanks so much. I wanted to touch base on the television delivery comments. There's certainly been a lot of moving industry pieces from your buyers.

Speaker Change: and an ongoing focus on rationalization.

Speaker Change: I know there's a strike timing element to it as well. Is the former component of that driving anything in terms of how it's impacting your discussions? And can you maybe just talk a little bit about what you're seeing in the industry landscape in terms of the buyer appetite for new orders?

Unknown Executive: The post-strike hangover was longer than I think anyone expected, and in the scripted side, particularly once the strike was over, then you have then you start writing, so there's another two-month lag behind, but what we're seeing on the development side is a pretty robust demand for product. There is more financial discipline about the budgets that are going to be commissioned, but we sold 37 new projects subsequent to the strike. That's a record for us and I think indicative of demand, but we're also shooting all over the world finding variable price points to help manage the profitability aspects which all the streamers are really focusing on in this kind of post-strike correction era. What it points to, I think, is ongoing demand but with a lot of flexibility about pricing, budget, and above all, great creative because it has to stand out.

Speaker Change: This is Kevin Begg speaking.

Kevin Beggs: Kevin Begg speaking, that's a great question. The post strike hangover was longer than I think than anyone expected. In the scripted side, particularly once the strike was over, then you start writing so there's another two-month lag behind. But what we're seeing in the development side is a pretty robust demand for product. There is more financial discipline about the budgets that are going to be commissioned. But we sold 37 new projects subsequent to the strike as a record for us.

Speaker Change: That's a great question.

Speaker Change: The post-strike hangover was longer than I think than anyone expected.

Speaker Change: And in the scripted side, particularly, once the strike was over, then you start writing, so there's another two-month lag behind.

Speaker Change: But what we're seeing in the development side is a pretty robust demand for product. There is more financial discipline about the budgets that are going to be commissioned, but we sold 37 new projects subsequent to the strike. That's a record for us.

Speaker Change: and I think indicative of demand, but we're also shooting all over the world, finding variable price points.

Kevin Beggs: And I think indicative of demand. But we're also shooting all over the world finding variable price points to help manage the profitability aspects, which all the streamers are really focusing on in this kind of post strike correction era. What it points to I think is going to be ongoing demand, but for a lot of flexibility about pricing, budget, and above all, great creative because it has to stand out in a crowded market.

Speaker Change: to help manage the profitability aspects, which all the streamers are really focusing on in this kind of post-strike correction era.

Speaker Change: What it points to, I think, is going to be ongoing demand, but for a lot of flexibility about pricing, budget, and above all, great creative, because it has to stand out in a crowded market.

Jeffrey Hirsch: Okay, that's helpful. And for Jeff, I think Jon mentioned an expectation for a return to sequential OTT subscriber growth. Given the current landscape and the maturity of the streaming market and price increase in the works, what gives you confidence in that? Maybe talk a little bit about the slate and what you're seeing so far in the month of August. Yeah, thanks for the question, Thomas. You know,

Jeffrey Hirsch: Okay, that's helpful. And for Jeff, I think John mentioned an expectation for a return to star sequential OTT subscriber growth. Given the current landscape and the maturity of the streaming market and price increase in the works, what gives you confidence in that? Maybe talk a little bit about the slate and what you're seeing to date in the month of August. Yeah, thanks for the question, Thomas. As John talked about, we have implemented a rate Christians quarter, so they'll be continued pressure on subs as quarter.

Speaker Change: Okay, that's helpful and for Jeff

Jeff: I think Jon mentioned an expectation for a return to star sequential OTT subscriber growth.

Speaker Change: Given the current landscape and the maturity of the streaming market and the price increase in the works, what gives you confidence in that? Maybe talk a little bit about the slate and what you're seeing to date in the month of August .

Jeffrey Hirsch: Thanks for the question, Thomas. As Jon talked about, we implemented a rate increase this quarter, so there'll be continued pressure on subs this quarter. But as we turn to the back half of the year, in quarters three and four, it's our strongest slate in terms of originals. We've got Outlander 7B coming back. We've got Kanan coming back on.

Jon: Yeah, thanks for the question Thomas. You know, as Jon talked about, we have a...

Speaker Change: implemented a rate increase this quarter, so there'll be continued pressure on subs this quarter. But as we turn to the back half of the year in quarters three and quarters four, it's our strongest slate in terms of originals. We've got Outlander 7B coming back. We've got Canon coming back on. We've got a really robust slate of pay-one movies from Lions Gate and pay-two from Universal, and so it's probably our strongest slate part of the year. We also have the holiday period in there, which our partners are really working with us in terms of offers together, and so it's a really robust opportunity to grow the business in the back half of the year. So we feel very confident that we'll have healthy OTT growth in quarters three and quarter four, and we also will come out of the year with revenue growth for the year.

Jeffrey Hirsch: But as we turn to the back half of the year in quarters, three and quarters, fourths are strongest slate in terms of originals that outlander seven B coming back. We've got caning coming back on. We've got a really robust slate of pay one movie, some lion gate and pay two from universal. And so it's probably our strongest slate part of the year. We also have the holiday period in there, which our partners are really working with us in terms of offers together.

Jeffrey Hirsch: We've got a really robust slate of pay-one movies from Lions Gate and pay-two from Universal. And so it's probably our strongest slate part of the year. We also have the holiday period in there, and our partners are really working with us in terms of offers together. And so it's a really robust opportunity to grow the business in the back half of the year. So we feel very confident that we'll have healthy OTT growth in quarters three and four, and we will also come out of the year with revenue growth.

Jeffrey Hirsch: And so it's a really robust opportunity to grow the business in the back half of the year. So we feel very confident that we'll have healthy OTT growth in quarters three and quarter four. And we also will come out of the year with revenue growth, of the Year. Thanks so much.

Unknown Executive: Thanks Thomas, opportunity to be given the next question please.

Unknown Executive: Thanks, Thomas. Operator, could we get the next question, please?

Speaker Change: Thanks so much.

Operator: The next question comes from Steven Cahall with Wells Fargo. Please go ahead.

Speaker Change: Thanks Thomas. Operator, could we get the next question please?

Speaker Change: The next question comes from Steven Cahall with Wells Fargo. Please go ahead.

Steven Cahall: The next question comes from Steven Cahall, let's both Fargo, please go ahead. Thank you. So, Jon and Jimmy, you both mentioned some of the fiscal first quarter softness that you need to recover from. First could you just be a little more clear about what didn't come together in the quarter that you expected. I know some of the TV deliveries were lighter. I've expected that that was timing, but maybe there's some bigger kind of industry trends that you're seeing.

Steven Cahall: Thank you. Jon and Jimmy, you both mentioned some of the fiscal first quarter softness that you need to recover from. First, could you just be a little more clear about what didn't come together in the quarter that you expected? I know some of the TV deliveries were lighter.

Steven Cahall: Thank you. So Jon and Jimmy, you both mentioned some of the fiscal first quarter softness that you need to recover from. First, could you just be a little more clear about what didn't come together in the quarter that you expected? I know some of the TV deliveries were lighter. I suspected that was timing, but maybe there's some bigger kind of industry trends that you're seeing. And you both mentioned some adaptations that the company's making. Could you be a little more clear about what sort of benefits from those adaptations we can see to help you get to the studio's guidance that you've given for the year?

Steven Cahall: And you both mentioned some adaptations that the company's making. Could you be a little more clear about what sort of benefits from those adaptations we can see to help you get to the studio guidance that you've given for the year. And then Jimmy, could you just spend a little more time on the IP back loan facility with the E1 content. Do you have an opportunity to do something with the rest of the library.

Unknown Executive: I suspected that was timing, but maybe there's some bigger kind of industry trends that you're seeing. And you both mentioned some adaptations that the company's making. Could you be a little more clear about what sort of benefits from those adaptations we can see to help you get to the studio's guidance that you've given for the year? And then, Jimmy, could you just spend a little more time on the IP-backed loan facility with the E-1 content?

Unknown Executive: Do you have an opportunity to do something with the rest of the library that would be attractive vis-a-vis some of your other debt structures, and why not consider that? And then lastly, anything in particular that you're seeing on the library side, a pretty good library revenue number. We're just curious about any longer-term trends in licensing and libraries. Thank you.

Speaker Change: And then, Jimmy, could you just spend a little more time on the IP-backed loan facility with the E-1 content?

Speaker Change: Do you have an opportunity to do something with the rest of the library that would be attractive vis-a-vis some of your other debt structures, and why not consider that? And then lastly, anything in particular that you're seeing on the library side, a pretty good library revenue number?

Steven Cahall: That would be attractive DCV, some of your other debt structures and why not consider that. And then lastly, anything in particular that you're seeing on the library side, a pretty good library revenue number, which is curious on any longer term trends in licensing and library. Thank you. Sure, look in terms of the quarter, you know, we are feeling the impact is noted of a kind of more extended, a little deeper impact of the strike.

Speaker Change: We're just curious on any longer term trends in licensing and library. Thank you.

Unknown Executive: Sure. Look, in terms of the quarter, you know, we are feeling the impact, as noted, of a kind of more extended, a little deeper impact of the strike. So, definitely affected deliveries. That's timing. We had some cancellations. But it's more than just timing, right? So, a little deeper impact.

Speaker Change: sure

Steven Cahall: So definitely if affected deliveries that's timing, we have some cancellations that's more than just timing, right. So a little deeper impact will feel good about where we are in our path to getting back to our number. We've got to work cut out for us over the next three quarters. And the second quarter in particular, we got a great film release coming up. So we got six releases coming up, but it'll be heavy up on PNA.

Speaker Change: Look, in terms of the quarter, we are feeling the impact, as noted, of a more extended, a little deeper impact of the strike. So, definitely affected deliveries.

Speaker Change: That's timing. We had some cancellations. It's more than just timing, right? So a little deeper impact. We feel good about where we are in our path to getting back to our number. We've got our work cut out for us over the next three quarters.

Unknown Executive: We feel good about where we are on our path to getting back to our number. We've got our work cut out for us over the next three quarters. And in the second quarter, in particular, we've got a great film release coming up. So, we've got six releases coming up. It'll be heavy on P&A. So, you'd expect the trailing 12 months in EBITDA to be impacted by that. STARS has some increased content amortization based on the timing of originals and the pay 1 and pay 2 window.

Speaker Change: And the second quarter in particular, we got a great film release coming up. So we got six releases coming up. It'll be heavy up on P&A, so you'd expect trailing 12 months in EBITDA to be impacted by that. STARS has some increased content amortization based on the timing of...

Steven Cahall: So you would expect trailing 12 months in EBITDA to be impacted by that. Stars has some increased content amortization based on the timing of originals and pay one and pay two window. And so as you go to the cadence and you move into the back half of the year in the Q3 and Q4, you start to see the bounce back coming off the strike, episodic deliveries increasing. We have almost doubled the number of scripted episodic orders in the second half of this year coming up in TV relative to the prior year.

Unknown Executive: And so, as you go to the cadence and you move into the back half of the year, in Q3 and Q4, you start to see the bounce back coming off the strike, with episodic deliveries increasing. We have almost doubled the number of scripted episodic orders in the second half of this year coming up on TV relative to the prior year. And obviously, then we get the benefit of the second quarter film releases coming forward, as well as on the STARS side, returning to the OTT growth, as Jeff mentioned, as well as strong content in the latter part of the year and the benefit of increased ARPU and a price increase. So, there we go. We execute and head towards these numbers. The second part of your question was with regard to the IP facility.

Speaker Change: originals in the pay 1 and pay 2 window. And so as you go to the cadence and you move into the back half of the year in the Q3 and Q4,

Speaker Change: You'll start to see the bounce back coming off the strike. Episodic delivery is increasing. We have almost double the number of...

Speaker Change: of scripted episodic orders in the second half of this year coming up in TV relative to the prior year. And obviously then we get the benefit of the second quarter.

Steven Cahall: And obviously then we get the benefit of the second quarter film releases coming forward as well as on the starter side, returning to the OTT growth as Jeff mentioned, as well as strong content in the back part of the year and the benefit of increased RPU and a price increase. So there we go. We execute and head towards these numbers. Your second part of your question was with regards to the IP facility.

Speaker Change: Thank you very much.

Jim Packer: There we go. We execute and head towards these numbers. Your second part of your question was with regards to the IP facility. I'm going to let, actually, Jim Packer answer the question about library and talk about sort of the environment for library and our library specifically.

Jim Packer: I'm going to let Jim Packer answer the question about libraries and talk about the environment for libraries and our library specifically.

Steven Cahall: I'm going to let actually Jim Packer answer the question of that library and talk about sort of the environment for library and and our library specifically. I see even we are experiencing as you can see with our a six trailing 12 months continue strength. The portfolio has gotten much better with E1. You know, we have the rookie. We really didn't have a great procedural in our library. Now we do. We also as John mentioned have a really robust fast and kind of avod self directed publishing business that's well over 100 million now.

Jim Packer: Hi Steven. We are experiencing, as you can see with our 886 trailing 12 months, continued strength. The portfolio has gotten much better with E1. You know, we have the rookie. We really didn't have a great procedural in our library.

Speaker Change: Yeah.

Jim Packer: Hi, Steven. We are experiencing, as you can see with our 886 trailing 12 months,

Jim Packer: Continued strength.

Jim Packer: The portfolio has gotten much better with E1, you know, we have the rookie, we really didn't have a great procedural in our library, now we do. We also, as Jon mentioned, have a really robust, fast, and kind of AVOD.

Jim Packer: Now we do. We also, as John mentioned, have a really robust, fast, and kind of AVOD-based self-directed publishing business that's well over $100 million now. So I think we're finding that this portfolio approach is really working. I think if you look at any of the top streamers, you'll see one or two of our titles in the top 10 on every single platform. And I think that's the key to the diversity of our library and the fact that everybody's really continuing to do business with us and wants to do business with us.

Jon: Self-directed publishing business that's well over a hundred million now, so we're

Steven Cahall: So we're I think we're finding that this portfolio approach is really working. I think if you look at any of the top streamers, you'll see one or two of our titles in the top 10 on every single platform. And I think that's the key to the diversity of our library and the fact that everybody's really continuing to do business with us and want to do. This is what it is. Yeah. And in terms of adaptations, I'm not sure what you're referring to.

Speaker Change: I think we're finding that this portfolio approach is really working. I think if you look at any of the top streamers...

Jon: You'll see one or two of our titles in the top ten on every single platform, and I think that's the key to the diversity of our library and the fact that everybody's really continuing to do business with us and want to do business with us.

Unknown Executive: Yeah, and in terms of adaptations, I'm not sure what you're referring to. There certainly are; Kevin and his television team are out in the marketplace right now. I think you can expect to see some pretty exciting announcements about adaptations, the word you used, in terms of our television business in regards to our franchises. But I would also add that Adam Fogelson is really taking charge of our games, product, and experience group, and that's an area I think Adam, you might want to talk a little about how we're pushing earlier monetization and what we're doing in that area. Yeah, I mean, the group...

Speaker Change: Yeah, and in terms of adaptations, I'm not sure what you're referring to. There certainly are, Kevin and his television team are out in the marketplace right now. I think you can expect to see them.

Steven Cahall: There certainly are Kevin and his television team are out in the marketplace right now. I think you can expect to see some pretty exciting announcements about adaptations, the word you use in terms of our television business in regards to our franchises. But I would also add that Adam Fogelson has really taken charge of our games, product and experience group. And that's an area I think Adam, you might talk a little about and how we're pushing earlier modernization and what we're doing in that area.

Speaker Change: some pretty exciting announcements about adaptations the word you use in terms of our television business in regard to our franchises but I would also add that Adam Fogelson is really taking charge of

Adam: are games, product, and experience group. And that's an area, I think, Adam, you might talk a little about and how we're pushing earlier monetization and what we're doing in that area. Yeah, I mean, the group has been doing—thanks so much, Jon. The group's been doing a lot of great development work over the last few years, but it's time to put the pedal down and start monetizing. And the only reason to do that is because the content deserves it. I think Jon mentioned in his remarks 13 shows that are preparing for Broadway. A number of them should be coming in the next 12 to 18 months.

Adam Fogelson: Yeah, I mean, the group has been doing thanks so much, Jon. The group's been doing a lot of great development work over the last few years, but it's time to put the pedal down and start monetizing. And the only reason to do that is because the content deserves it. I think Jon mentioned in his remarks that there are 13 shows that are preparing for Broadway, and a number of them should be coming in the next 12 to 18 months.

Steven Cahall: Yeah, I mean the group has been doing thanks so much Sean. The group's been doing a lot of great development work over the last few years, but it's time to put the pedal down and start monetizing. And the only reason to do that is because the content deserves it. I think Jon mentioned in his remarks, 13 shows that are preparing for Broadway. A number of them should be coming in the next 12 to 18 months.

Adam Fogelson: We're seeing huge momentum on the game side. We mentioned the John Wick AAA game specifically, but a number of our properties, the fans are asking us to interact with those properties in much more significant ways. And on the gaming side, both in the console world and in the online world, there are a lot of opportunities there. So we do think that there are going to be meaningful increases in revenue and contribution starting in this fiscal year and then growing over the course of the coming year.

Speaker Change: We're seeing huge momentum on the game side, we mentioned the John Wick AAA game specifically, but a number of our properties, the fans are asking us to interact with those properties.

Steven Cahall: We're seeing huge momentum on the game side. We mentioned the John Wick AAA game specifically, but a number of our properties. The fans are asking us to interact with those properties in much more significant ways. And on the gaming side, both in the console world and in the online world, there are a lot of opportunities there. So we do think that there's going to be meaningful increases in revenue and contribution coming starting in this fiscal year and then growing over the course of the coming years.

Speaker Change: in much more significant ways. And on the gaming side, both in the console world and in the online world, there are a lot of opportunities there. So we do think that there's going to be meaningful increases in revenue and contribution coming starting in this fiscal year and then growing over the course of the coming years.

Unknown Executive: Does that, Steven, answer your question? Well, coming back to your question on the IP facility, Steven, yeah, thanks for noting we did $340 million primarily off the E1 library and very efficient pricing, as I noted. So yeah, you should expect us to see that continue.

Speaker Change: Does that, Steven, answer your question? Well, coming back to your question on the IP facility, Steven...

Steven Cahall: That even answer your questions. Well, coming back to your question. On the IP facility, Stephen. Yeah, thanks for noting we did 340 million. Primarily off the E1 library and very efficient pricing as I noted. So yeah, you should expect us to see continuing that. As you know, the benefit of that is is it travels with the studio. So you put that next to the bond exchange. And, you know, the significant amount of the debt and capital structure are already established for both studio and stars.

Steven Cahall: Yeah, thanks for noting. We did 340 million.

Speaker Change: primarily off the E1 library and very efficient pricing, as I noted. So, yeah, you should expect us to see continuing that. As you know, the benefit of that is it travels with the studio. So you put that next to the bond exchange.

Unknown Executive: As you know, the benefit of that is it travels with the studio, so you put that next to the bond exchange and a significant amount of the debt and capital structure already established for both the studio and the stars. So I'm highly confident we can come back and take the asset-rich aspect of the studio balance sheet and do more IP facilities and ABL, ultimately taking out the bank lines at the time of full separation. And then on stars: it's a misunderstood asset.

Speaker Change: And, you know, a significant amount of the debt and capital structure are already established for both studio and stars.

Steven Cahall: So I'm highly confident we can come back and take the asset rich aspect of the studio balance sheet and do more IP facilities and ABL ultimately to take out the bank lines at the time of full separation. And then on stars, this understood asset. There's significant cash flows very visible there. You got 325 million a bond. You have 625 million net debt. You put another 300 to 350 terminate a against that.

Speaker Change: So I'm highly confident we can come back and...

Speaker Change: Hi!

Speaker Change: Take the asset-rich aspect of the studio balance sheet and do more IP facilities and ABL, ultimately, to take out the bank lines at the time of full separation.

Unknown Executive: There are significant cash flows, very visible there. You've got $325 million of bonds; you have $625 million net debt. You put another $300 to $350 in term loan aid against that, and you're, as I said in my remarks, you're closer to three times leverage, and you've got significant cash flow coming out of that over time with effectively no cash taxes, with NOL carryovers, minimal cash interest of maybe $50 million a year, and minimal capex. So you've got a really strong business to finance there.

Speaker Change: And then on S.T.A.R.S., it's a misunderstood asset. There's significant cash flows, very visible there. You've got $325 million of bonds. You have $625 million net debt. You put another $300 to $350 term loan aid against that.

Speaker Change: And, you know, you're, as I said in my remarks, you're closer to three times leverage and you've got significant cash flow coming out of that over time.

Steven Cahall: And, you know, you're, as I said in my remarks, you're closer to three times leverage and you got significant cash flow coming out of that over time with effectively no cash taxes within a well carry over as minimal cash interest. So maybe 50 million a year and minimal cat tax. So you got a really strong business to finance there. Thank you.

Speaker Change: with effectively no cash taxes, with NOL carryovers, minimal...

Speaker Change: Cash Interest of maybe $50 million a year and minimal capex, so you've got a really strong business to finance there.

Unknown Executive: Thanks.

Unknown Executive: Thanks. Operator, could we get the next question, please?

Speaker Change: Thank you.

Operator: The next question comes from Barton Crockett with Wilson Blatt. Please go ahead.

Speaker Change: Thanks. Operator, could we get the next question, please?

Unknown Executive: How pretty could we get the next question, please?

Speaker Change: The next question comes from Barton Crockett with Wilson Blatt. Please go ahead.

Barton Crockett: The next question comes from Barton Crockett with Wilson Blatt. Please go ahead. Hi, thanks for taking the question. I wanted to understand a little bit more precisely if I can what you're saying about your expectation for. I doubt near term. So are you saying with the spending in the studio segment that studio, I doubt will be less in the second quarter than it was in the first quarter? Is that what you're trying to indicate?

Barton Crockett: Hi, thanks for taking the question. I wanted to understand a little bit more precisely if I can what you're saying about your expectation for OEBDA near term. So are you saying, with the spending in the studio segment, that studio OEBDA will be less in the second quarter than it was in the first quarter? Is that what you're trying to indicate?

Barton Crockett: Hi, thanks for taking the question. I wanted to understand a little bit more precisely, if I can, what you're saying about your expectation for OIBDA near-term. So

Barton Crockett: Are you saying with the spending in the studio segment that...

Speaker Change: Studio OIDA will be less in the second quarter than it was in the first quarter.

Unknown Executive: That's one question. And then the second question is just wanting to understand a little bit more precisely the process for the split from here. Is it simply just a matter of completing some filings and getting them past the SEC and then getting a vote, or is there something else that has to happen?

Speaker Change: Is that what you're trying to indicate? That's one question, and then...

Barton Crockett: That's one question. And then the second question is just wanting to understand a little bit more precisely the process for the split from here. Is it simply just a matter of completing some filings and getting them passed the SEC or is there, and then getting a vote? Or is there something else that has to ask? Yeah, thanks, Barton.

Speaker Change: The second question is just wanting to understand a little bit more precisely the process for the split from here. Is it simply just a matter of completing some filings and getting them past the SEC and then getting a vote, or is there something else that has to happen?

Unknown Executive: Yeah, thanks, Barton. Yeah, I'll take the EBITDA question first. Yeah, we would expect, and you would too, expect the studio EBITDA to be less in the second quarter because we have, again, six releases, which is really heavy, but we're excited about that on the film side. So that P&A is going to hit immediately, but then obviously, that puts very strong recovery back into Q3 and Q4. The TV business will be up beyond and build throughout the year, but not enough to overcome the, you know, the six, the releases on the film side.

Unknown Executive: Yeah, thanks.

Speaker Change: Yeah, thanks, Barton. Yeah, I'll take the EBITDA question first. Yeah, we would expect, and you would too, expect the studio...

Jim Packer: Yeah, I'll take the EBITDA question first. Yeah, we would expect, and you would do is at the studio EBITDA to be less in the second quarter because we have again six releases, which is really heavy up, but we're excited about that on the film side. So that PNA is going to hit immediately, but then obviously that puts very strong recovery back into Q3 and Q4. The TV business will be up beyond and build throughout the year, but not enough to overcome the six, the releases on the film side, and then we have the spin.

Speaker Change: We're excited about that on the film side, so that P&A is going to hit immediately, but then obviously that puts very strong recovery back into Q3 and Q4. The TV business will be up beyond and build throughout the year.

Barton Crockett: But not enough to overcome the, you know, the six, the releases on the film side. And then we have the spin. So as we said from the beginning,

Unknown Executive: And then we have the spin. So as we've said from the beginning, the back end of this year is back end loaded into Q3 and Q4. So it is playing out like that. And, you know, we feel great about the second half, and we're prepared that in Q2, we will have an increase in leverage, some use of cash flow. Again, it's the cadence of the content business on the studio, and then.

Jim Packer: So as we said from the beginning, the back end, this year is back in loaded into the Q3 and Q4. So it is playing out like that, and we feel great about the second half, and we're prepared to then Q2. We will have an increase and leverage some use of cash flow. Again, it's the cadence of the content business on the studio side. And then proxy.

Speaker Change: The back-end, this year is back-end loaded into the Q3 and Q4.

Barton Crockett: So it is playing out like that.

Barton Crockett: and, you know, we feel great about the second half and we're...

Barton Crockett: prepared that in Q2 we will have an increase in leverage, some use of cash flow. Again, it's the cadence of the content business on the studio side.

Unknown Executive: Your last question in terms of the timing of the spin, what we would expect is that our next steps would be to file a preliminary proxy in September, okay? It will be subject to SEC review. Once we clear the SEC, then we will be mailing the definitive proxy and going for Canadian regulatory review and ultimate shareholder votes in mid to late fall as we approach and stay on track for a tax-efficient spin within calendar year 2024.

Barton Crockett: Amen.

Barton Crockett: Roxy

Speaker Change: Your last question in terms of timing of the spin.

Unknown Executive: Your last question in terms of timing of the spin, what we would expect is our next steps would be to file a preliminary proxy in September. It will be subject SEC review. Once we clear the SEC, then we would be mailing a definitive proxy and going for Canadian regulatory review and ultimate shareholder votes and mid-to-late fall as we approach and stay on track for a tax-efficient spin within calendar year 2024. Great. Thank you. Thanks, Barton.

Speaker Change: What we would expect is our next steps would be to file a preliminary proxy in September , okay? It will be subject to SEC review. Once we clear the SEC, then we would be mailing the definitive proxy and going for Canadian regulatory review and ultimate shareholder votes in mid to late fall as we approach and stay on track for a tax-efficient spend.

Speaker Change: within calendar year 2024.

Unknown Executive: Thanks, Barton. Operator, could we get the next question, please?

Barton Crockett: Thank you.

Operator: The next question comes from David Joyce with Seaport Research Partners. Please go ahead.

Barton Crockett: Thanks Barton. Operator, could we get the next question please?

David Joyce: How pretty could we get the next question, please? The next question comes from David Joyce with C4 Research Partners. Please go ahead. Thank you. Two questions.

Speaker Change: The next question comes from David Joyce with Seaport Research Partners. Please go ahead.

David Joyce: Thank you. First, if you could just provide a little bit more clarity on the remaining financing for both studios and stars in terms of how that's progressing, when you expect to close on them, any price talk yet, that sort of thing.

David Joyce: Thank you. Two questions. First, if you could just provide a little bit more clarity on...

Jim Packer: First, if you could just provide a little bit more clarity on the remaining semantics for both studios and stars in terms of how that's progressing when you expect to close on them, any price talk yet, that sort of thing, then I've got a second question. Yeah, sure, David. Yeah, the next steps we are definitely having conversations with the banks. Those are going very well. Again, we just closed the E1 IP facility the Friday after 4th of July weekend, and we're moving ahead.

David Joyce: The remaining financings for both studios and stars in terms of, you know, how that's progressing, when you expect to close on them, any price talk yet, that sort of thing. Then I've got a second question.

Unknown Executive: Yeah, sure, David. Yeah, the next steps. We are definitely having conversations with the banks. Those are going very well. Again, we just closed the E1 IP facility the Friday after the Fourth of July weekend. And, you know, we're moving ahead. We can do another IP facility just off of a slice of Lions Gate Libraries, for example, in the same way we just did, pay down some existing debt that does not move forward.

David Joyce: Yeah, sure, David.

Speaker Change: Yeah, the next steps, we are definitely having conversations with the banks, those are going very well.

Speaker Change: Again, we just closed the E1IP facility the Friday after 4th of July weekend.

Speaker Change: We're moving ahead. We can do another IP facility just off of a slice of Lions Gate Libraries, for example, in the same way we just did, pay down some existing...

Jim Packer: We can do another IP facility just off of a slice of or a landscape library, for example, and in the same way we just did pay down some existing debt that does not move forward and the new IP facility would move forward and travel with the studio. And in the day, you've got significant unsold lights, valuation on the landscape library. Okay, over and beyond the E1 valuation, and that provides plenty of assets with which to fully refinance probably a billion, too, if you look at our outstanding debt at the end of June 30th, the Terminal Nays, the Bees, and Revolver, which is effectively what you'd be refinancing.

Speaker Change: that does not move forward and the new IP facility would move forward and travel with the studio. And at the end of the day,

Unknown Executive: And the new IP facility would move forward and travel with the studio. And at the end of the day, you've got a significant unsold lights valuation on the Lions Gate Library, okay, over and beyond the E1 valuation. And that provides plenty of assets with which to fully refinance probably a billion, two, if you look at our outstanding debt at the end of June 30th, the Terminal A's, the B's, and Revolver, which is effectively what you'd be refinancing. And again, we've already done the bonds. So those have already been split.

Speaker Change: You've got significant Unsold Lights valuation on the Lions Gate Library, over and beyond the E1 valuation, and that provides plenty of assets with which to fully refinance, probably $1.2 billion if you look at our

Speaker Change: Outstanding Debt at the end of June 30th, the Terminal A's, the B's, and Revolver, which is effectively what you'd be refinancing.

Unknown Executive: We've already done $340 million of this IP facility. So really, you've got a billion or two left on the studio side with plenty of assets to finance that. And then you need maybe $300 to $350 of Terminal A on the starter side. And again, that's a very strong business. We've had conversations with the banks. I'm very confident. I don't want to get out in front of things in terms of price talk, but I'll tell you it is very favorable. And if one was so inclined, you could swap the variable back to fix right now and the two-year swap and pick up over 100 basis points. So I feel good about where we are.

Speaker Change: And again, we've already done the bonds, so those have already been split. We've already done $340 million of this IT facility.

Jim Packer: And again, we've already done the bonds, so those are already been split. We've already done 340 million of this IP facility. So really, you've got a billion, two left on the studio side with plenty of assets to finance that. And then you need baby 300 to 350 of Terminal Nays on the Star side. And again, that's a very strong business. We've had conversations with the banks. I'm very confident. I don't want to get out in front of things in terms of price talk, but I'll tell you it is very favorable. And if one was so inclined, you could swap variable back fixed right now to your swap and pick up over 100 basis points. So I feel good about where we are.

Speaker Change: So really, you've got a billion-two left on the...

Barton Crockett: on the studio side with plenty of assets to finance that. And then you need maybe 300 to 350 of Terminal A on the star side. And again, that's a very strong business. We've had conversations with the banks. I'm very confident. I don't wanna get out in front of things in terms of price talk, but I'll tell you it is very favorable.

Barton Crockett: And if one was so inclined, you could swap variable back to fix right now in two-year swap and pick up over 100 basis points. So I feel good about where we are.

Unknown Executive: And then you had a second question, David.

David Joyce: Yeah, thank you. This was a quarter with a lot of content spend, you know, catch up after the strike. Is this about the maximum level of spend that you can handle in your system? And I was wondering, and this kind of dovetails with another question earlier, but what would be the timing of the deliveries from this content spending? We just saw this quarter.

Unknown Executive: Then you had a second question, David. Yeah, thank you.

Speaker Change: And then you had a second question, David.

David Joyce: Yeah, thank you. This was a quarter with a lot of content spend, you know, catch up after the strike.

Unknown Executive: This was a quarter with a lot of content spend, you know, catch up after the strike. Is this about the maximum level of spend that you can handle in your system and I was wondering, and I think this kind of need of tails with another question earlier, but what would the timing be on the deliveries from this content spending we just saw this quarter? Yeah, well that starts to inform the third and fourth quarter and then pushing on into 26 in terms of just strong results, how we're back in loaded.

David Joyce: Is this about the maximum level of...

Speaker Change: spent this week.

Unknown Executive: Yeah well that that starts to inform the third and fourth quarter and then pushing on into 26 in terms of just strong results how we're back in loaded. We can always manage more content spend for the right content okay but this was pretty peak expect a little bit of the same in Q2 and then it starts to mitigate through the back end of the year settles out right around 500 billion a quarter if you will you know over Q3 and Q4 and and at the same time then you start to see the cash generation from the from the television deliveries okay and from the theatrical releases in Q2 you start to see that cash flow flowing through so it's very strong cash flow in the back end.

Speaker Change: Yeah, well, that starts to inform the third and fourth quarter and then pushing on into 26 in terms of just strong results, how we're back in loaded.

Speaker Change: We can always manage more content spend for the right content, okay? But this was pretty peak, expect a little bit of the same in Q2. And then it starts to mitigate through the back end of the year, settles out right around $500 billion a quarter, if you will.

Unknown Executive: We can always manage more content spend for the right content, okay, but this was pretty peak. Expect a little bit of the same in Q2, and then it starts to mitigate through the back end of the year, settles out right around 500 million a quarter, if you will. You know, over Q3 and Q4 and at the same time, then you start to see the cash generation from the television deliveries, okay, and from the theatrical releases in Q2, you start to see that cash flow flowing through this is very strong cash flow in the back end. Appreciate it. Thank you.

Barton Crockett: you know, over Q3 and Q4. And at the same time, then you start to see the cash generation from the television deliveries.

Speaker Change: Okay, and from the theatrical releases in Q2, you start to see that cash flow flowing through. So it's very strong cash flow in the back end.

Unknown Executive: Thanks, David. Operator, can we get to some questions, please? The next question comes from Jason Bazinet with Citi. Please go ahead.

Speaker Change: I appreciate it. Thank you.

Speaker Change: Thanks, David. Operator, can we get to some questions, please?

Unknown Executive: David, I'll probably get the next question.

Speaker Change: The next question comes from Jason Bazinet with Citi. Please go ahead.

Adam Fogelson: The next question comes from Jason Bassinette with city, please go ahead. Hi, I just had two quick questions. First, I guess it's been about eight months as you close in E1, and I was just curious is that gone about as you expected better, any surprises took the downside. And then my second question, I know it's not the largest business for you, but there's sort of a big debate in the industry about whether theatrical in the US is ever going to get back to this 11th billion number pre-COVID.

Jason Bazinet: Hi, I just had two quick questions. First, I guess it's been about eight months since you closed on E1, and I was just curious, how has that gone? About as well as you expected.

Jason Bazinet: Hi, I just had two quick questions. First, I guess it's been about eight months since you closed on E1, and I was just curious, has that gone about as you expected? Better? Any surprises to the downside?

Jason Bazinet: Any surprises to the downside? And then my second question, I know it's not the largest business for you, but, There's sort of a big debate in the industry about whether theatrical in the U.S. is ever going to get back to this 11-ish billion number pre-COVID. Do you guys have a house view on, given everything that's going on in the industry and changes in windows and all that, you know, where we ultimately settle out on the U.S. theatrical box receipts?

Speaker Change: And then my second question, I know it's not the largest business for you, but...

Adam Fogelson: Do you guys have a house view on giving everything it's going on in the industry and changes and windows and all that, you know, where would ultimately settle out on the US theatrical box received thanks. Hey, it's Adam. Happy to answer the second question first, and then I'll pass the ball. I'm not sure that anyone is necessarily predicting that the overall box office will climb back to that 11 billion dollar number.

Speaker Change: There's sort of a big debate in the industry about whether theatrical...

Speaker Change: in the U.S. is ever going to get back to this 11-ish billion number pre-COVID. Do you guys have a house view on, given everything that's going on in the industry and changes in windows and all that, you know, where we ultimately settle out on the U.S. theatrical box?

Adam Fogelson: Hey, it's Adam. I'm happy to answer the second question first, and then I'll pass the ball.

Speaker Change: Receipts, thanks.

Speaker Change: Hey, it's Adam. Happy to answer the second question first and then I'll pass the ball.

Adam Fogelson: I'm not sure that anyone is necessarily predicting that the overall box office will climb back to that 11 billion dollar number. However, I would also say that a lot of conversation two, three, four, five months ago about the possibility that people weren't interested in going to movie theaters anymore has been pretty radically disproven by great content over the course of the last summer. And not only have it been sort of tent poles and franchises that have been working, but smaller films as well.

Speaker Change: I'm not sure that anyone is necessarily predicting that the overall box office will climb back to that $11 billion number. However...

Adam Fogelson: However, I would also say that a lot of conversation two, three, four, five months ago about the possibility that people were interested in going to movie theaters anymore has been pretty radically disproven by great content over the course of the last summer. And not only has it been sort of tentfalls and franchises that have been working, but smaller films as well. And even films that don't necessarily make it onto everyone's radar from a publicity standpoint.

Speaker Change: I would also say that a lot of conversation two, three, four, five months ago about the possibility that people weren't interested in going to movie theaters anymore.

Speaker Change: has been pretty radically disproven by great content over the course of the last summer. And not only has it been sort of tentpoles and franchises that have been working, but smaller films as well. And even films that don't necessarily make it onto everyone's radar from a publicity standpoint.

Adam Fogelson: And even films that don't necessarily make it onto everyone's radar from a publicity standpoint. We had three theatrical releases in the last quarter, all of which performed exceptionally well. Ministry, Unsung Hero, and Strangers were all really, really profitable and all delivered really significant margins well north of that 20% number everyone was talking about last year.

Adam Fogelson: We had three theatrical releases in the last quarter, all of which performed exceptionally well. The ministry unsung hero and strangers were all really, really profitable and all delivered really significant margins well north of that 20% number everyone was talking about last year. So we are really bullish about what the theatrical business can do, especially because we have the benefit of an incredibly careful and precise and small overhead relative to the competition.

Speaker Change: three theatrical releases.

Speaker Change: in the last quarter, all of which performed exceptionally well. Ministry, Unsung Hero, and Strangers were all really, really profitable and all delivered really significant margins, well north of that 20% number everyone was talking about last year. So we are really bullish about...

Unknown Executive: So we are really bullish about what the theatrical business can do, especially because we have the benefit of an incredibly careful and precise and small overhead relative to the competition and are managing both the production costs and the marketing costs in a very different way. And so our ability to continue to generate profits, not only on the big tentpole films like the John Wicks and the Hunger Games of the world but also on small and mid-sized films that, again, may not generate great press headlines but are certainly generating great returns for the company.

Speaker Change: what the theatrical business can do, especially because we have the benefit of an incredibly

Speaker Change: careful and precise and small overhead relative to the competition, and are managing both the production costs and the marketing costs in a very different way. And so our ability to continue to generate profits.

Adam Fogelson: And our managing both the production costs and the marketing cost in a very different way. And so our ability to continue to generate profits, not only on the big tentful films like the John Wicks and the Hunger Games of the world, but also on small and mid-size films that again may not generate great press headlines, but are certainly generating great returns for the company. And I want to add one thing there, John, that what we don't know or haven't seen yet is that the part of the consumer base that always drove a lot of the theatrical business, which was the frequent moviegoer, the moviegoer that went once a month was about 28% of the business.

Barton Crockett: Not only on the big tentpole films like the John Wick's and the Hunger Games of the world But also on small and mid-sized films that again may not generate great press headlines But are certainly generating great returns for the company

Unknown Executive: And I want to add one thing there, John, that what we don't know or haven't seen yet is that the part of the consumer base that always drove a lot of the theatrical business, which was the frequent moviegoer, the moviegoer that went once a month, was about 28% of the business. And I think there is a possibility, if we start getting that frequent moviegoer back, the sky is the limit. This thing could really work.

Adam Fogelson: And I think there is a possibility if we start getting that frequent moviegoer back, I mean the sky is the limit, this thing could really work. But it is exciting to see the overperformance of so many movies in the marketplace right now. And Adam and his team really are right now in great position, particularly going into 26 with all of the franchises to take advantage of that.

Speaker Change: And I want to add one thing there, Jon.

Jon: that what we don't know or haven't seen yet is that the part of the consumer base that always drove a lot of the theatrical business, which was the frequent moviegoer, the moviegoer that went once a month, was about 28% of the business.

Jon: I think there is a possibility, if we start getting that frequent moviegoer back, I mean, the sky is the limit.

Unknown Executive: But it is exciting to see the overperformance of so many movies in the marketplace right now, and Adam and his team really are right now in a great position, particularly going into 26 with all of the franchises, to take advantage of that. In terms of E1, I would say we are very pleased with E1. And not just because, really, the thesis for E1 was mostly about a library and integrating a huge library, 7,000 titles, which, going back to sort of the overhead question that always comes up, we've added a total of seven people between Lionsgate and E1 to handle 7,000 titles across seven people.

Jon: This thing could really work, but it is exciting to see the over-performance of so many movies in the marketplace right now, and Adam and his team really are right now in a great position, particularly going into 26 with all of the franchises.

Speaker Change: to take advantage of that. In terms of E1, I would say we are very pleased with E1. And not just, you know, really the thesis around E1 was mostly about a library and integrating a huge library, 7,000 titles, which going back to sort of the overhead

Jon Feltheimer: In terms of E1, I would say we are very pleased with E1 and not just the thesis around E1 was mostly about a library and integrating a huge library 7000 titles, which going back to sort of the overhead question that always comes up. But we have added a total between Lionsgate and E1 to handle 7000 titles of 7 people. That would be unheard of at any of the other studios. And so that part of the deal looks very solid, but there is a strategic value to this integration that we are finding right now.

Speaker Change: We've added a total between Lions Gate and E1 to handle 7,000 titles of seven people. That would be unheard of at any of the other studios, and so that part of the deal looks very solid, but there's a strategic value to it.

Unknown Executive: That would be unheard of at any of the other studios. And so that part of the deal looks very solid. But there's a strategic value to this integration that we're finding right now. I'm going to let Jim Packer talk a little about that.

Speaker Change: to the

Jim Packer: integration that we're finding right now. I'm going to let Jim Packer talk a little about it. Yeah, I think there were three things that were really set out early on that are really proving out the right way. One is Lionsgate Canada.

Jim Packer: Yeah, I think there were three things that were really set out early on that are really proving out the right way. One is Lions Gate Canada. We are now a really significant presence up there. Our Canadian content licensing business has really skyrocketed. It's been really great for us.

Jim Packer: I am going to let Jim Packard talk a little about it. Yeah, I think there were three things that were really set out early on as a really proven out the right way. One is Lionsgate Canada. We are now a really significant presence up there, our Canadian content, licensing business has really skyrocketed. It has been really great for us. Second, some of our franchises, Hunger Games, WIC, Twilight were controlled by E1 in major territories, Canada, UK, Spain and others.

Jim Packer: We are now a really significant presence up there. Our Canadian content licensing business has really skyrocketed. It's been really great for us.

Jim Packer: Second, some of our franchises, Hunger Games, WIC, Twilight, were controlled by E1 in major territories, Canada, the UK, Spain, and others. We now control those, and that's a big deal for us in our licensing business in a market like Spain. We actually are having a record year through our motion picture group because we're controlling these franchises. And then lastly, there was one soft spot in our library. It was procedurals, as I said earlier, but in addition to the Rookie, which is a kind of a global phenomenon as far as procedurals are concerned, we got 20 other procedurals as part of this library. So that aspect is really strong for the group and is playing out nicely.

Jim Packer: Second, some of our franchises, Hunger Games, WIC, Twilight, were controlled by E1 in major territories.

Jim Packer: Canada, UK, Spain, and others.

Jim Packer: We now control those and that's a big deal for us in our licensing business in a market in a country like Spain We actually are having a record year through our motion picture group because we're controlling these franchises and then lastly

Jim Packer: We now control those. And that is a big deal for us in our licensing business, in a market, in a country like Spain. We actually are having a record year through our motion picture group because we are controlling these franchises. And then lastly, there was one soft spot in our library with procedures, as I said earlier, but in addition to the rookie, which is kind of a global phenomenon as far as procedural, we got 20 other procedures as part of this library. So that aspect is really strong for the group and playing out nice. Thank you for all the color.

Jim Packer: There was one soft spot in our library, it was procedurals as I said earlier, but in addition to the rookie, which is kind of a global phenomenon as far as procedural, we got 20 other procedurals as part of this library, so that aspect is really strong for the group and playing out nicely.

Unknown Executive: That's great. Thank you for all the color.

Unknown Executive: Thanks, Jason. I predict we will get the next question, please.

Speaker Change: That's great. Thank you for all the color.

Operator: The next question comes from Alan Gould with Loop Capital. Please go ahead.

Jim Packer: Thanks, Jason. I'm pretty sure we get the next question, please.

Alan Gould: Next question comes from Alan Gould, with Loop Capital, please go ahead. Thanks for taking my question, I've got two please, one for Jeff and one for Jimmy. Jeff, I realize that stores is priced a lot less, lower price to the consumer than most of the other services.

Speaker Change: The next question comes from Alan Gould with Loop Capital. Please go ahead.

Alan Gould: Thanks for taking my question. I've got two, please. One for Jeff and one for Jimmy. Jeff, I realize that Starz is priced a lot less lower for the consumer than most of the other services, but everybody seems to be raising prices these days. I need to know how much I can handle. And for Jimmy, just curious, so a 200 plus million dollar increase in deferred revenue at the studio this quarter seems like an integral item. Can you tell me what that is?

Alan Gould: Thanks for taking my question. I've got two, please. One for Jeff and one for Jimmy. Jeff, I realize that stores is priced a lot less, lower price to the consumer than most of the other services, but everybody seems to be raising price these days.

Jim Packer: But everybody seems to be raising price these days, and it's all about how much the earth can handle. And for Jimmy, just some curious, so a $200 plus million increase in deferred revenue at the studio of this quarter seems like an additional item. Just tell me what that is. Hi, Alan. Thanks for the question. You know, as you look at the industry, as we've said, and we've always, stars has always been a very complimentary service, whether it's been on the linear business or in the new kind of digital business in terms of trying to be that, that add on or that bundle partner for all these broad based streaming services.

Speaker Change: I saw a $200-plus million increase in deferred revenue at the studio this quarter, seems like an integral item. Can you just tell me what that is?

Jeffrey Hirsch: Hi Alan. Thanks for the question. You know, as you look at the industry, as we've said, and we always will, Starz has always been a very complementary service, whether it's been in the linear business or in the new kind of digital business, in terms of trying to be that add-on or that bundle partner for all these broad-based streaming services. And what we've seen over the last couple years, and you saw it this week, is that broad-based streamers continue to raise their rates at significant levels, which gives us room to continue to raise our rates.

Speaker Change: Hi Alan, thanks for the question. You know as you look at the industry as we've said and we've always, Starz has always been a very complimentary

Speaker Change: whether it's been on the linear business or in the new kind of digital business in terms of

Speaker Change: trying to be that add-on or that bundle partner for all these broad-based streaming services. And what we've seen over the last couple years, and you've been seeing it this week, that the broad-based streamers continue to raise their rates at significant...

Jim Packer: And what we've seen over the last couple years, and you've seen it this week, that the broad based streamers continue to raise their rates at significant levels, which gives us room to continue to raise our rate. We just executed our second rate increase this past Monday. We look at engagement on the service in terms of our consumers with the big originals and the pay one and pay two, and we're seeing record engagement.

Jeffrey Hirsch: We just executed our second rate increase this past Monday. We look at engagement on the service in terms of our consumers with the big originals and the pay one and pay two, and we're seeing record engagement. And so we felt like we still had room to go, and so we just raised rates again. And we'll continue to watch that. But as long as the broad-based streamers continue to raise rates, that gives us room to maintain our strategic position as complementary; we'll continue to look at rates as a way to grow revenue.

Speaker Change: Levels, which gives us room to continue to raise our rate. We just executed our second rate increase this past Monday.

Jim Packer: And so we felt like we still had room to go, and so we just raise rates again, and we'll continue to watch that. But as long as the broad based streamers continue to raise rates, that gives us room to maintain our strategic position as complimentary. We'll continue to look at rate as a way to grow revenue. And the deferred revenue represents content sales, who's like library, et cetera, who's avail dates are not ready yet, so you've not been able to recognize revenues. So, effectively, it represents future revenue.

Speaker Change: We look at engagement on the service in terms of our consumers with the big originals, and the pay 1 and pay 2, and we're seeing record engagement, and so we felt like we still had room to go, and so we just raised rates again, and we'll continue to watch that. But as long as the broad-based streamers continue to raise rates, that gives us room to maintain our strategic position as complementary, we'll continue to look at rates as a way to grow revenue.

Jimmy: And the deferred revenue represents content sales that are like library, etc., whose availed dates are not ready yet, so you've not been able to recognize revenue, so effectively, it represents future revenue.

Speaker Change: And the deferred revenue represents content sales that, who's like library, etc., who's availed dates are not ready yet, so you've not been able to recognize revenue. So, effectively, it represents future revenue.

Jimmy: Was there one big package or something, Jimmy? Because you've never had $200 million in a quarter before. That was more of a combination.

Speaker Change: Was there one big package or something, Jimmy? Because you've never had $200 million in a quarter before.

Jim Packer: Was there one big package or something, Jimmy, because it's never had 200 million in a quarter before? That was more of a combination of things. Remember, we also have the E1 integration as well, so we'll sell any one content as well. Okay, thank you. Thanks, Aaron.

Jimmy: That was more of a combination of things. Remember, we also have the E1 integration as well, so we're selling E1 content as well.

Jimmy: That was more of a combination of things. Remember, we also have the E1 integration as well, so we're selling E1 content as well.

Unknown Executive: Thanks, Alan. After that, could we get the next question, please?

Speaker Change: Thank you.

Speaker Change: Thanks Alan. Aparna, could we get the next question please?

Operator: The next question comes from Jim Goss with Warrington Research. Please go ahead.

Unknown Executive: How pretty could we get the next question, please?

Speaker Change: The next question comes from Jim Goss with Warrington Research. Please go ahead.

Jim Packer: The next question comes from Jim Goss, that's Barrington Research. Please go ahead. All right, thanks. Lainty, it's always been very diverse in terms of its output bias type and distribution, and now you have E1 and other acquisitions. I'm wondering if you might characterize the fiscal 25 and fiscal 26 output by the ethical versus TV versus direct streaming, and possibly by a mix of titles by size. Any sort of global characteristics you might provide?

Jim Goss: All right, thanks. Lions Gate has always been very diverse in terms of its output, size, type, and distribution, and now you have E1 and other acquisitions. I'm wondering if you might characterize the fiscal 25 and fiscal 26 output by theatrical versus TV versus direct-to-streaming and possibly by a mix of titles by size and genre, you know, sort of global characteristics.

Jim Goss: Alright, thanks. Lions Gate has always been very diverse in terms of its output, size, type, and distribution, and now you have E1 and other acquisitions. I'm wondering if you might characterize

Jim Goss: The Fiscal 25 and Fiscal 26 Outlook by Theatrical vs. TV vs. Direct-to-Streaming and possibly by a mix of titles by size and genre.

Speaker Change: You know, sort of global.

Unknown Executive: Is that related to E1, Jim, in terms of just how the... No, no, I mean all of your output. I just meant to... It added to it.

Speaker Change: Characteristics you might provide.

Speaker Change: Is that related to E1, Jim, in terms of just how the... No, no, I mean all of your output. I just meant to...

Jim Packer: Is that related to E1, Jim, in terms of just other now? No, I mean, all of your output, I just meant that added into it. Does it tilted more to television now, and maybe possibly also some streaming? Just looking at the overall output of releases on an annual basis for this year and next year. Yeah, I think, you know, we pretty much have a, when you look at the kind of studio side of things, $3 billion plus of revenue, you know, it's fairly well mixed.

Unknown Executive: Does it tilt it more to television now? And maybe, possibly also, and streaming? Just looking at the overall output of releases on an annual basis for this year and next year. Yeah, I think we pretty much have a pretty decent mix when you look at the kind of studio side of things, $3 billion plus of revenue, you know, it's fairly well mixed. It'll bounce from period to period depending on the number of theatrical releases, so it's pretty well balanced.

Speaker Change: That added into it, does it tilt it more to television now, and maybe possibly also just some streaming? Just looking at the overall output of releases on an annual basis for this year and next year.

Jim: Yeah, I think, you know, we pretty much have a, when you look at the kind of studio side of things, $3 billion plus of revenue, you know, it's fairly well mixed. It'll bounce period to period, depending on the number of theatrical releases. So it's pretty well mixed.

Jim Packer: It'll bounce period to period, depending on the number of theatrical releases. So it's pretty well mixed. On the E1 side, it's going to be more heavily weighted towards TV. I would say, probably 80% in fiscal 25 would be TV related, more like less than 20% on the motion picture side, motion picture is a little heavier on the percentage in Q1 because we had Arthur, we had some other things we were integrating, but really the bigger piece of E1 is going to be their television product and library sales related to that.

Unknown Executive: On the E1 side, it's going to be more heavily weighted towards TV. I would say probably 80% of fiscal 25 would be TV-related, more like less than 20% on the motion picture side. The motion picture business was a little heavier on the percentage in Q1 because we had Arthur, and we had some other things we were integrating, but really, the bigger piece of E1 is going to be their television product and library sales related to that.

Speaker Change: On the E1 side, it's going to be more heavily weighted towards TV. I would say probably 80% in fiscal 25 would be TV-related.

Speaker Change: More like less than 20% on the motion picture side. Motion picture was a little heavier on the percentage in Q1 because

Unknown Executive: But also, in terms of the total number of total film releases, for example, you probably have maybe as many as a dozen one year or the next in terms of theatrical, but you'd also have a lot of others that go direct-to-streaming, or...

Speaker Change: It also, in terms of the total film releases, for example, you probably have...

Jim Packer: It also, in terms of the total, total film releases, for example, you probably have maybe as many as a dozen one year or the next in terms of theatrical, but you'd also have a lot of others that go maybe direct to streaming or just some other output.

Speaker Change: maybe as many as a dozen one year or the next in terms of theatrical but you'd also have a lot of others that go

Adam Fogelson: Hey, it's Adam. I'm happy to try to answer that question. I mean, what I would say is this. Jon and I have gone over the development slate and looked at the strength of the franchises that we have. Both franchises that we have already been thriving with, like John Wick and Hunger Games, and also franchises that we're building. Jon mentioned Highlander, really evolving Now You See Me to the next level, developing Monopoly with Margot Robbie and her terrific company working on Naruto, all of those projects.

Speaker Change: Maybe direct-to-streaming or just some other output.

Speaker Change: Hey, it's Adam. I'm happy to try to answer that question. I mean, what I would say is this.

Jeffrey Hirsch: Hey, it's Adam. I'm happy to try to answer that question. I mean, I, what I would say is this, John and I have gone over the development slate and looked at the strain of the franchises that we have, both franchises that we have already been thriving with, like John Wick and Hunger Games, and also franchises that we're building. John mentioned Highlander. Really evolving. Now you see me to the next level developing monopoly with Margot Robbie and her and her terrific company working on Naruto, all of those projects.

Jeffrey Hirsch: So I think that you're going to see three to four tent poles per year starting in fiscal 26, where probably it was one or two in prior years. I think the balance of this late and we will have 12, 15 or more wide releases of various kinds will be made up of the types of films that you've seen over the course of the last year, small and midsize films in genres that the company has thrived in in the past, continuing to work with top flight filmmakers.

Jon: Jon and I have gone over the development slate and looked at the strength of the franchises that we have, both franchises that we have already been thriving with, like John Wick and Hunger Games, and also franchises that we're building. Jon mentioned Highlander, really evolving Now You See Me to the Next Level, developing Monopoly with Margot Robbie and her terrific company working on Naruto, all of those projects. So I think that you're going to see three to four tentpoles per year, starting in fiscal 26, where probably it was one or two in prior years. I think the balance of the slate, and we will have 12, 15 or more wide releases of various kinds, will be made up of the types of films that you've seen over the course of the year.

Adam Fogelson: So I think that you're going to see three to four tentpoles per year, starting in fiscal 26, where it probably was one or two in prior years. I think the balance of the slate, and we will have 12, 15, or more wide releases of various kinds, will be made up of the types of films that you've seen over the course of the last year, small and mid-sized films in genres that the company has thrived in in the past, continuing to work with top-flight filmmakers.

Speaker Change: for the last year, small and mid-sized films.

Speaker Change: in genres that the company has thrived in in the past.

Adam Fogelson: Francis Lawrence is excited to be working with us on the next Hunger Games movie, as he has with the prior three, but he's also excited to be developing a much smaller film, but one that we're really excited about, The Long Walk, which Jon mentioned in his remarks. So we're really thrilled with the quality of talent, both in front of and behind the camera, that want to work here. And our ability to deliver both on tentpole films but also on those small and mid-sized films that can be incredibly artistically satisfying but also generate a real return for the company is something that I think we're uniquely positioned to do.

Speaker Change: continuing to work with Top Flight filmmakers. Francis Lawrence is excited to be working with us on the next Hunger Games movie, as he has the prior three. But he's also excited to be developing a much smaller film, but one that we're really excited about, The Long Walk, which Jon mentioned in his remarks. So we're really thrilled with the quality of talent, both in front of and behind the camera, that want to work here, and our ability to deliver both on tentpole films, but also on those small and mid-sized films.

Jeffrey Hirsch: Francis Lawrence is excited to be working with us on the next Hunger Games movie as he has the prior three, but he's also excited to be developing a much smaller film, but one that we're really excited about the long walk, which John mentioned in his remarks. So we're really thrilled with the quality of talent both in front of and behind the camera that want to work here and our ability to deliver both on tent pole films, but also on those small and midsize films that can be incredibly artistically satisfying, but also generate a real return for the company.

Jon: that can be incredibly artistically satisfying but also generate a real return for the company is something that I think we're uniquely positioned to be able to do. Yeah, I think, again, if you're trying to get sort of a broader perspective, I would say as we...

Adam Fogelson: Yeah, I think, again, if you're trying to get sort of a broader perspective, I would say as we get past all of the strike-related delays, you'll start looking at what has been a typical Lionsgate portfolio of motion pictures, around 10 to 12 wide releases, another 30 plus direct-to-video, multi-platform, et cetera, between television and film. I think you're going to see, actually, growth in the revenues of both of those businesses, and they're actually pretty equivalent. They'll be very close to each other this year, and they'll be very close to each other with growth in both areas next year. So if that's the kind of thing you're looking for,

Jeffrey Hirsch: It's something that I think we're uniquely positioned to be able to do. Yeah, I think again, if you're trying to get sort of a broader perspective, I would say as we get past all of the strike related delays, you'll start looking at what has been a typical alliance gate portfolio of motion pictures around 10 to 12 wide releases. This is another 30 plus direct to video, multi platform, etc, between television and film.

Jon: Get past all of the strike-related delays. You'll start looking at what has been a typical Lions Gate portfolio of motion pictures, around 10 to 12 live releases, another 30-plus.

Jon: Direct-to-video, multi-platform, etc. between television and film. I think you're going to see actually growth of both of the revenues of both of those businesses and they're actually pretty equivalent. They'll be very close to each other this year. They'll be very close to each other with growth in both areas next year. So if that's the kind of thing you're looking for, you know, that's what it'll look like from a macro level.

Jeffrey Hirsch: I think you're going to see actually growth of both of the revenues of both of those business and they're actually pretty equivalent. They'll be very close to each other this year. They'll be very close to each other with growth in both areas next year. So if that's the kind of thing you're looking for, that's where it will look like from the macro level. Okay, yes. And one other thing, the stars and brickbox steel you mentioned, I thought some of interesting.

Jeffrey Hirsch: Okay, yes. And one other thing, the Stars and Brickbox deal you mentioned sounded interesting. Are they basically trading content, some of the U.S. content, going to their platform and vice versa? And is that a template STARS might use to expand its franchise without actually having those international businesses that it started to go into and then backed out of?

Jon: Okay, yes. And one other thing, the STARS and Brickbox deal you mentioned, I thought sounded interesting.

Jeffrey Hirsch: Are they basically creating content to some of the U.S, content going to their platform and vice versa, and is that a template stars might use to expand its franchise without actually having those international businesses that it started to go into and then backed out of?

Speaker Change: Are they basically trading content, some of the U.S. content, going to their platform and vice versa? And is that a template?

Speaker Change: Stars might use to expand its franchise without actually having those international businesses that it started to go into and then backed out of.

Jeffrey Hirsch: Hi, it's Jeff. We're really excited about this partnership. Obviously, we focus on two-core demos, and BritBox and STARS really overlap in their programming for those two-core demos. And we've been able to use, I would say, world-class technology out of our group in Denver and our tech stack in our app to actually build this offering through the STARS app and STARS.com in a very simple and frictionless way for the consumer to put both products together.

Jon: Hi, it's Jeff. We're really excited about this partnership. Obviously, we focus on two-chord demos and BritBox and SARS.

Jeffrey Hirsch: Hi, it's Jeff. We're really excited about this partnership. Obviously, we focus on two core demos and brickbox and stars really overlap in their programming in those two core demos. And we've been able to use, I would say, a world class tech out of our group in Denver and our tech tech and our app to actually build this offering through the stars app through stars.com in a very simple, and frictionless way for the consumer to put both products together.

Jon: really overlap in their programming and in those two core demos and we've been able to use

Jon: I would say a world-class tech out of our group in Denver and our tech stack and our app.

Jon: to actually build this offering through the S.T.A.R.S. app, through S.T.A.R.S.com, and a very...

Jeffrey Hirsch: It's also a way to get more content that both of our consumers want together, and so we will look to do more of that with our technology. We're having conversations with other players that align with our programming strategy to really build out the portfolio and to drive churn down and make the whole business better for both of us.

Jon: Simple and frictionless way for the consumer to put both products together.

Jeffrey Hirsch: It's also a way to get more content that both of our consumers want together. And so we will look to do more of that with our technology. We're having conversations with other players that align with our programming strategy to really build out the portfolio and to drive churn down and make the whole business better for both of us. Okay, thanks very much. Thanks, Jim. Operative.

Jon: It's also a way to get more content that both of our consumers want together. And so we will look to do more of that with our technology. We're having conversations with other players that align with our programming strategy to really build out the portfolio and to drive churn down and make the whole business better for both of us.

Unknown Executive: Okay, thanks very much.

Operator: Thanks, Jim. Operator, could we get the last question, please?

Speaker Change: Okay, thanks very much.

Matthew Harrigan: The last question comes from Matthew Harrigan with Benchmark. Please go ahead.

Speaker Change: Thanks, Jim. Operator, could we get the last question, please?

Adam Fogelson: Could we get the last question, please? Last question comes from Matthew Hargan with Benchmark. Please go ahead. Thank you. It's great that you got so much content that readily available and even has some built-in pull demand for video games and maybe even AR over a period of time. And certainly one of the[inaudible] Thank you. Sure. No, happy to. This is Adam. I appreciate the question. I would say importantly, our creative team is deeply involved in the creative process.

Speaker Change: The last question comes from Matthew Harrigan with Benchmark. Please go ahead.

Matthew Harrigan: Oh, thank you. It's great that you have so much content that's readily adaptable and even has some built-in pull demand for video games, maybe even AR over a period of time. And it's certainly one of the growth businesses within media, but it can be a difficult business. I know some studios, you know, take the Star Wars example, have had issues working with publishers.

Matthew Harrigan: Oh, thank you. It's great that you've got so much content that's readily adaptable and even has some built-in pull demand for video games and maybe even AR over a period of time. And it's certainly one of the growth businesses within media, but it can be a difficult business. I know some studios, you know, take the Star Wars example, have had issues.

Unknown Executive: How engaged are you in the creative process for the Hunger Games game to make sure that it's up to, you know, Lions Gate quality? And are you also looking more at mobile games and free games, because there's also a lot of interest in that area? I'd just like to get your observations on the learning curve so far and what you're finding. Thank you. Sure. No, happy to.

Speaker Change: working with publishers. How engaged are you in the creative process for the Hunger Games game to make sure that it's up to Lions Gate quality? And are you also looking more at mobile games and free games? Because there's also a lot of interest in that area. I'd just like to...

Adam Fogelson: Sure. No, happy to. This is Adam.

Speaker Change: Get your observations on the learning curve so far and what you're finding. Thank you.

Adam Fogelson: I appreciate the question. I would say, importantly, that our creative team is deeply involved in the creative process. More importantly, the filmmakers that we've worked with to generate these great franchises are completely involved and partnered with us to make sure that we are delivering games and experiences that reflect the true creative essence of the franchises that we've built. So this is not something we're doing without those partners. It's something we're doing with them.

Adam: Sure, no, happy to. This is Adam. I appreciate the question. I would say, importantly, our creative team is deeply involved in the creative process. More importantly, the filmmakers that we've worked with to generate these great franchises.

Adam Fogelson: More importantly, the filmmakers that we've worked with to generate these great franchises are completely involved and partnered with us in making sure that we are delivering games and experiences that reflect the true creative essence of the franchises that we've built. So this is not something we're doing without those partners is something we're doing with them. And we've got in literally every case across every platform. And yes, we're absolutely working on with mobile games as well.

Speaker Change: are completely involved and partnered with us in making sure that we are delivering games and experiences that reflect the true creative essence of the franchises that we've built. So this is not something we're doing without those partners, it's something we're doing with them and we've got in literally every case across every platform and yes we're absolutely working on with mobile games as well. The John Wick franchise lends itself

Adam Fogelson: And we've got, in literally every case, across every platform, and yes, we're absolutely working on mobile games as well. The John Wick franchise lends itself to experiences and opportunities across the broadest possible spectrum. In each and every case, we have the ability to make decisions, whether they're licensing deals or investment deals, so that we are making sure that we're using our capital where we believe it fits with our expertise and where it makes the most sense to fit into the overall portfolio of how we're spending our money.

Adam Fogelson: The John Wick franchise lends itself to experiences and opportunities across the broadest possible spectrum. In each and every case, we have the ability to make decisions whether they're licensing deals or investment deals, so that we are making sure that we're using our capital where we believe it fits with our expertise and where it makes the most sense fitting into the overall portfolio of how we're spending our money.

Speaker Change: to experiences and opportunities across the broadest possible spectrum in each and every case.

Jon: We have the ability to make decisions, whether they're licensing deals or investment deals, so that we are making sure that we're using our capital where we believe it fits with our expertise and where it makes the most sense fitting into the overall portfolio of how we're spending our money. But our creative partners are fully engaged with us.

Adam Fogelson: But our creative partners are fully engaged with us, and I will tell you that the things we've seen across games, across stage, and across live experiences from a creative standpoint are really exciting to us and to the filmmaking partners that we're working with.

Adam Fogelson: But our creative partners are fully engaged with us, and I will tell you that the things we've seen across games, across stage, and across live experiences from a creative standpoint are really exciting to us and to the filmmaking partners that we're working with. Thank you. Thanks everyone.

Jon: And I will tell you that the things we've seen across games, across stage, and across live experiences from a creative standpoint are really exciting to us and to the filmmaking partners that we're working with.

Unknown Executive: Thanks, everyone. Please refer to the Select Releases and Events tab under the Investor Relations section of each company's website for a discussion of certain non-GAAP forward-looking measures discussed on this call. Thank you.

Speaker Change: Great, thank you.

Speaker Change: Thanks everyone. Please refer to the Select Releases and Events tab under the Investor Relations section of each company's website for discussion of certain non-GAAP forward-looking measures discussed on this call. Thank you.

Unknown Executive: Please refer to the specializes in events tab under the Investor Relations section of each company's website for discussion of certain non-gap forward looking measures discussed on this call.

Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Unknown Executive: Thank you.

Speaker Change: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

unknown: [music]

Speaker Change: [music]

Larry Weaver: www.larryweaver.com www.larryweaver.com