Yesterday (Dec. 27) Lionsgate finalized its $500 million acquisition of Hasbro’s entertainment platform Entertainment One (eOne). As a result of the merger, Lionsgate will add 6,500 new titles to its content library, including popular series like Showtime’s Yellowjackets and ABC’s The Rookie. According to CEO Jon Feltheimer, the acquisition is part of an effort to separate Lionsgate’s studios business and its network and streaming service Starz into standalone companies.
The merger, announced in August, was completed a week after Lionsgate announced it will spin off its studios business, Lionsgate Studios, as a publicly traded company. Lionsgate Studios will go public through a reverse merger with Screaming Eagle Acquisition Corp, a special-purpose acquisition company (SPAC), valuing it at $4.6 billion. The listing is expected to bring in $350 million in gross proceeds to Lionsgate.
The spinoff means Starz will become a standalone network and streaming service. In November, Feltheimer cut 10 percent of Starz’s staff and ended its operation in the U.K. in due to the restructuring.
In Lionsgate’s second-quarter earnings release in November, Feltheimer said the downsizing reflected Liongate’s “focus on preparing the service to thrive as a profitable and successful standalone company.”
Hasbro acquired eOne in August 2019 for $4 billion. Both Hasbro and eOne have been cutting costs to prepare for the sale to Lionsgate. Earlier this year, Hasbro laid off about 1,000 employees, or 15 percent of its total staff.
In a joint statement on Dec. 22, Feltheimer and Michael Burns, Lionsgate’s vice chair, said they have “put together all of the pieces for a thriving standalone content company with a strong financial growth trajectory.” In the statement, they touted the acquisition of eOne, Lionsgate’s growing stake in 3 Arts Entertainment and the company’s strong “content slates,” which include releases like The Hunger Games: The Ballad of Songbirds and Snakes and John Wick: Chapter Four.
Lionsgate’s studio business, which includes its motion picture and television production divisions, reported a revenue of $790 million in the quarter ended September, up 21 percent from the year prior. Lionsgate’s motion picture studio saw its revenue jump 77 percent year-over-year, while television production revenue fell 9 percent in part due to the Hollywood strikes.
