Filing scope and business context
This is Lions Gate Entertainment Corp.’s Form 10-K for the fiscal year ended March 31, 2024—not a standalone STARZ Entertainment Corp. filing or a calendar-year Q4 report. The results cover Lionsgate’s Motion Picture, Television Production and Media Networks businesses, including STARZ, before the May 2024 Studio Business transaction.
On May 13, 2024, Lionsgate completed a transaction that made the Studio Business a separately traded company, Lionsgate Studios Corp. (Nasdaq: LION). Lionsgate retained approximately 87.2% ownership. The transaction generated approximately $350 million in gross proceeds, intended to repay Term Loan A and Term Loan B.
Financial performance and liquidity
| Metric | FY2024 | FY2023 |
|---|---|---|
| Revenue | $4.017 billion | $3.855 billion |
| Operating loss | $938.8 million | $1.858 billion |
| Net loss attributable to Lionsgate shareholders | $1.103 billion; $4.77 per share | $2.010 billion; $8.82 per share |
| Operating cash flow | $396.8 million | $(114.3) million |
| Cash and cash equivalents at year-end | $314.0 million | $272.1 million |
| Corporate debt, gross | $2.509 billion | $2.060 billion |
| Film-related obligations, gross | $1.949 billion | $2.035 billion |
Revenue rose 4.2%, while the operating loss narrowed by $918.9 million and the shareholder net loss narrowed by $907.3 million. Improvement largely reflects lower goodwill impairment than in FY2023; it does not represent a return to GAAP profitability. Operating cash flow improved by $511.1 million, mainly from lower investment in film and television programs and program rights and collections of receivables.
Total segment profit, a management performance measure, was $653.7 million, up 35.9%. Studio Business segment profit was $466.2 million versus $409.9 million; Media Networks segment profit was $236.4 million versus $106.8 million. Consolidated operating margin remained negative, at approximately 23.4%.
Year-end current assets were $1.464 billion against current liabilities of $3.992 billion. The balance sheet reported a $310.5 million total equity deficit, versus $786.0 million of equity a year earlier. Cash, cash equivalents and restricted cash totaled $371.4 million. The revolving facility had $675 million of availability at March 31, 2024; availability is subject to covenants.
Material changes and unusual items
- Motion Picture revenue increased 25.1% to $1.656 billion, driven by theatrical, digital home entertainment and international performance, including The Hunger Games: The Ballad of Songbirds & Snakes and John Wick: Chapter 4.
- Television Production revenue fell 24.4% to $1.330 billion, reflecting fewer STARZ original-series licenses and fewer third-party deliveries, with production also affected by the writers’ and actors’ strikes. FY2024 includes eOne results from its December 27, 2023 acquisition.
- Media Networks revenue increased 1.9% to $1.576 billion, but STARZ Networks revenue declined $30.4 million as traditional linear revenue fell; higher OTT revenue partly offset the decline. STARZ North America subscribers were 21.8 million, down from 22.78 million.
- Media Networks restructuring and impairment charges included $364.5 million of content impairments. The segment also recorded $493.9 million of goodwill impairment and $170.0 million of STARZ trade-name impairment. Cumulative content impairments under the restructuring plan reached $743.8 million.
- The company expects $80–$90 million of net future cash outlays for the Media Networks restructuring, with potential for further exits, impairments or restructuring charges. LIONSGATE+ was being wound down in multiple international territories; management identified Canada and India as remaining international operations.
- Other notable costs included $49.2 million of incremental compensation expense related to the 3 Arts Entertainment interest transaction, $12.8 million of Television Production development write-offs and approximately $16.6 million related to a theft at a production, for which partial recovery was expected.
- Interest expense increased to $269.8 million from $221.2 million, largely due to higher average rates and variable-rate debt balances. A $70 million tax benefit arose from settling a prior refund claim.
Outlook, risks and contingencies
Management expected FY2025 production cash requirements to increase and marketing spending to decrease versus FY2024; it also expected Motion Picture distribution and marketing expense to decline. Management believed operating cash flow, cash on hand, credit availability and financing sources would cover known operating and debt-service needs for the next 12 months and beyond. This outlook is subject to execution and market conditions.
The $819.2 million Term Loan B was due March 2025. If the required amount is not repaid, refinanced or extended by the specified date, the revolving facility and Term Loan A could become due early; management expected to refinance or extend Term Loan B before December 23, 2024. The company reported covenant compliance at March 31, 2024. Variable-rate debt, content performance, subscriber losses, distributor renewals, strikes, integration of eOne, and the ongoing restructuring are material risks. The filing reported no material pending legal proceedings believed likely to have a material adverse effect.
The audited financial statements received an unqualified audit opinion. Management and the auditor reported effective internal control over financial reporting, but eOne’s controls were excluded from the year-end effectiveness assessment because of the acquisition timing.
Important facts for investors to verify
- Confirm the post-transaction reporting perimeter, ownership and use of Lionsgate Studios proceeds, including the planned repayment of Term Loan A and Term Loan B.
- Track refinancing or extension of the $819.2 million Term Loan B and any related acceleration risk to other facilities.
- Reconcile the filing’s differing May 2024 senior-note exchange amounts: one passage refers to $382.7 million and another to $389.9 million.
- Monitor STARZ subscriber trends, distributor renewals, international service exits, restructuring cash costs and any additional impairments.
- Assess the quality and sustainability of operating cash flow, particularly the effects of receivable monetization and changing production investment.
- Review eOne purchase-price adjustments and integration results; the purchase accounting remained preliminary, and eOne’s controls were not included in the year-end control assessment.