10q10k10q10k.net

What changed in STARZ ENTERTAINMENT CORP /CN/'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of STARZ ENTERTAINMENT CORP /CN/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+589 added−561 removedSource: 10-K (2024-05-30) vs 10-K (2023-05-25)

Top changes in STARZ ENTERTAINMENT CORP /CN/'s 2024 10-K

589 paragraphs added · 561 removed · 390 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

55 edited+38 added−40 removed66 unchanged
Biggest changeFor the fiscal year ended March 31, 2023, Lionsgate UK television programming that was acquired, began production, continued production after delays due to the COVID-19 global pandemic, was produced or was broadcast, included the following: 14 Table of Contents Fiscal 2023 Television - Lionsgate UK Title Network Partner(s) The Pact Series 2 BBC Little Door Motherland 2022 Christmas Special BBC BBC, Merman Northern Lights TG4 Deadpan Son of a Critch 2 CBC Project 10 Leopard Skin Peacock Skinny Leopard Wong & Winchester Rogers & Québecor Pixcom International Workin’ Moms Netflix & CBC Coldsprings Media, Wolf + Rabbit Entertainment Dark City: The Cleaner Sky NZ Endeavour Ventures Prosper Stan Lingo Pictures Television Production - Home Entertainment For information regarding television production home entertainment revenue, see Motion Picture - Home Entertainment above.
Biggest changeFor the fiscal year ended March 31, 2024, Lionsgate UK television programming that was acquired, began production, was produced or was broadcast, included the following: Fiscal 2024 Television - Lionsgate UK Title Network Partner(s) Northern Lights TG4 Deadpan Pictures Son of Critch 3 CBC & CW Project 10 Borderline ZDF & Roku Further South Productions and ShinAwil The Burnings Girls Paramount+ and Roku Buccaneer Media The Final Score Netflix Dynamo Dark City: The Cleaner Sky NZ Endevour Ventures Prosper Stan Lingo Pictures Population 11 Stan Jungle Entertainment Pistol FX/Hulu and Disney+ Wiip Endangered M-Net MOTD Entertainment Television Production - Home Entertainment For information regarding television production home entertainment revenue, see Motion Picture - Home Entertainment above.
We construct release schedules taking into account moviegoer attendance patterns and competition from other studios' scheduled theatrical releases. After the initial theatrical release, distributors seek to maximize revenues by releasing films in sequential release date windows, which may be exclusive against other non-theatrical distribution platforms.
We construct release schedules taking into account moviegoer attendance patterns and competition from other studios' scheduled theatrical releases. After initial theatrical release, distributors seek to maximize revenues by releasing films in sequential release date windows, which may be exclusive against other non-theatrical distribution platforms.
ITEM 1. BUSINESS. Overview Lionsgate (NYSE: LGF.A, LGF.B) encompasses world-class motion picture and television studio operations aligned with the STARZ premium global subscription platform to bring a unique and varied portfolio of entertainment to consumers around the world.
ITEM 1. BUSINESS. Overview Lionsgate (NYSE: LGF.A, LGF.B) encompasses world-class motion picture and television studio operations aligned with the STARZ premium global subscription platform designed to bring a unique and varied portfolio of entertainment to consumers around the world.
The table below depicts the STARZ app and our 17 existing linear services, their respective on-demand services, and highlights some of their key attributes. 15 Table of Contents Demographics and Strategy Designed to complement any television offering for general audiences across both wholesale and retail OTT, as well as traditional MVPD distribution platforms, STARZ is a best-in-class subscription service delivering premium original series and hit movies with appeal to women and diverse audiences worldwide.
The table below depicts the STARZ app and our 17 existing linear services, their respective on-demand services, and highlights some of their key attributes. 16 Table of Contents Demographics and Strategy Designed to complement any television offering for general audiences across both wholesale and retail OTT, as well as traditional MVPD distribution platforms, STARZ is a best-in-class subscription service delivering premium original series and hit movies with appeal to women and diverse audiences worldwide.
Moreover, our networks compete with other programming networks for viewing and subscribership by each distributor’s customer base, as well as for carriage by such distributors.
Moreover, our networks compete with other programming networks for viewing and subscribership among each distributor’s customer base, as well as for carriage by such distributors.
We compete with the major studios, numerous independent motion picture and television production companies, television networks, pay television services and digital media platforms for the acquisition of literary, film and television properties, the services of performing artists, directors, producers and other creative and technical personnel and production financing, all of which are essential to the success of our businesses.
We compete with the major studios, numerous independent film and television production companies, television networks, pay television services and digital media platforms for the acquisition of literary, film and television properties, the services of performing artists, directors, producers and other creative and technical personnel and production financing, all of which are essential to the success of our businesses.
In doing so, we may mitigate the financial risk associated with production by, among other things: • Negotiating co-financing development and co-production agreements which may provide for cost-sharing with one or more third-party companies; • Pre-licensing international distribution rights on a selective basis, including through international output agreements (which license rights to distribute a film in one or more media generally for a limited term, and in one or more specific territories prior to completion of the film); • Structuring agreements that provide for talent participation in the financial success of the film in exchange for reduced guaranteed “up-front payments” that would be paid regardless of the film's success; and • Utilizing governmental incentives, programs and other structures from state and foreign countries (e.g., sales tax refunds, transferable tax credits, refundable tax credits, low interest loans, direct subsidies or cash rebates, calculated based on the amount of money spent in the particular jurisdiction in connection with the production).
In doing so, we may mitigate the financial risk associated with production by: • Negotiating co-financing development and co-production agreements which may provide for cost-sharing with one or more third-parties; • Pre-licensing international distribution rights on a selective basis, including through international output agreements (which license rights to distribute a film in one or more media generally for a limited term, and in one or more specific territories prior to completion of the film); • Structuring agreements that provide for talent participation in the financial success of the film in exchange for reduced guaranteed “up-front payments” that would be paid regardless of the film's success; and • Utilizing governmental incentives, programs and other structures from state and foreign countries (e.g., sales tax refunds, transferable tax credits, refundable tax credits, low interest loans, direct subsidies or cash rebates, calculated based on the amount of money spent in the particular jurisdiction in connection with the production).
We offer programs to develop and enrich the employee experience with offerings such as tuition reimbursement, leadership development programs, mentorship, and additional programs to help support specific populations (e.g., minorities, women, parents, LGBTQIA). We conduct annual employee training on anti-harassment, information technology security, the Foreign Corrupt Practices Act, as well as manager, diversity, equity and inclusion trainings.
We offer programs to develop and enrich the employee experience with offerings such as tuition reimbursement, leadership development programs, mentorship, and additional programs to help support specific populations (e.g., minorities, women and LGBTQ). We conduct annual employee training on anti-harassment, information technology security, the Foreign Corrupt Practices Act, as well as manager, diversity, equity and inclusion trainings.
In addition, our motion pictures compete for audience acceptance and exhibition outlets with motion pictures produced and distributed by other companies. Likewise, our television product faces significant competition from independent distributors as well as major studios.
In addition, our motion pictures compete for audience acceptance and exhibition outlets with motion pictures produced and distributed by other companies. Similarly, our television product faces significant competition from independent distributors as well as major studios.
Our productions distribute documents electronically to minimize paper consumption and waste and 22 Table of Contents limit the use of single-use plastics. Our productions follow best practices featured in the Producers Guild of America and Sustainable Production Alliance’s Green Production Guide, which are designed to reduce the film, television, and streaming industry’s carbon footprint and environmental impact.
Our productions distribute documents electronically to minimize paper consumption and waste and limit the use of single-use plastics. Our productions follow best practices featured in the Producers Guild of America and Sustainable Production Alliance’s Green Production Guide, which are designed to reduce the film, television, and streaming industry’s carbon footprint and environmental impact.
We generally distribute motion pictures directly to movie theaters in the U.S. whereby the exhibitor retains a portion of the gross box office receipts and the balance is remitted to the distributor. Concurrent with their release in the U.S., films are generally released in Canada and may also be released in one or more foreign countries.
We generally distribute motion pictures directly to movie theaters in the U.S. whereby the exhibitor retains a portion of the gross box office receipts and the balance is remitted to the distributor. Concurrent with their release in the U.S., films are generally released in Canada and in one or more foreign countries.
Engaging in such responsibility not only helps us manage risks and maximize opportunities, but also helps us understand and manage our social, environmental, and economic impact that enables us to contribute to society’s wider goal of sustainable development.
Engaging in such responsibility not only helps us manage risks and maximize 22 Table of Contents opportunities, but also helps us understand and manage our social, environmental, and economic impact that enables us to contribute to society’s wider goal of sustainable development.
Our affiliation agreements expire at various dates into 2027. 16 Table of Contents We work with our distributors to increase the number of subscribers to our services. To accomplish this, we may help fund the distributors’ efforts to market our services or may permit distributors to offer limited promotional periods with discounted or no payment of subscriber fees.
Our affiliation agreements expire at various dates through 2027. 17 Table of Contents We work with our distributors to increase the number of subscribers to our services. To accomplish this, we may help fund the distributors’ efforts to market our services or may permit distributors to offer limited promotional periods with discounted or no payment of subscriber fees.
Regulation 18 Table of Contents The regulation of programming services, cable television systems, direct broadcast satellite providers, broadcast television licensees and online services is subject to the political process and has been in constant flux historically.
Regulation The regulation of programming services, cable television systems, direct broadcast satellite providers, broadcast television licensees and online services is subject to the political process and has been in constant flux historically.
This includes FCC oversight in connection with communications satellites and related uplink/downlink equipment and transmissions, content-specific requirements such as closed captioning, messaging during children’s programming, loudness of commercials, and program access requirements in connection with certain distributors and programmer services with shared attributable interests.
This includes FCC oversight in connection with communications satellites and related uplink/downlink equipment and transmissions, content-specific requirements such as closed captioning, loudness of commercials, and program access requirements in connection with certain distributors and programmer services with shared attributable interests.
In doing so, we capitalized on increased optionality in distribution and maintained a platform agnostic approach to distribution to take full advantage of new windowing opportunities and alternative distribution strategies (while also continuing to work closely with our theatrical exhibition partners).
In doing so, we capitalize on increased optionality in distribution and maintain a platform agnostic approach to distribution to take full advantage of new windowing opportunities and alternative distribution strategies (while also continuing to work closely with our theatrical exhibition partners).
Subscribers have access to a vast library of quality content and a top-rated user experience, along with the ability to download and watch STARZ original series, blockbuster theatricals and favorite classic TV series and movies without an internet connection.
Subscribers have access to a vast library of quality content and a top-rated user experience, along with the ability to download and watch STARZ original series, blockbuster theatricals and favorite classic TV series and movies.
Our film, television, subscription and location-based entertainment businesses are backed by an 18,000-title library and a valuable collection of iconic film and television franchises. We manage and report our operating results through three reportable business segments: Motion Picture , Television Production and Media Networks .
Our film, television, subscription and location-based entertainment businesses are backed by a more than 20,000-title library and a valuable collection of iconic film and television franchises. We manage and report our operating results through three reportable business segments: Motion Picture , Television Production and Media Networks .
Human Capital Management Employees As of May 23, 2023, we had approximately 1,500 full-time employees in our worldwide operations. We also utilize many consultants in the ordinary course of our business and hire additional employees on a project-by-project basis in connection with the production of our motion pictures and television programming.
Human Capital Management Employees As of May 24, 2024, we had approximately 1,717 full-time employees in our worldwide operations. We also utilize many consultants in the ordinary course of our business and hire additional employees on a project-by-project basis in connection with the production of our motion pictures and television programming.
Motion Picture - Other Global Products and Experiences Our Global Products and Experiences division drives incremental revenue and builds consumer engagement across our entire portfolio of properties via licensing and launching live shows and experiences, location-based entertainment destinations, games, physical and digital merchandise, and through select strategic partnerships and investment s.
Motion Picture - Other Global Products and Experiences Our Global Products and Experiences division drives incremental revenue and builds consumer engagement across our entire portfolio of properties via live shows and experiences, location-based entertainment destinations, games, physical and digital merchandise, and select strategic partnerships and investments .
Our merchandise is available in the Lionsgate Store, our official ecommerce shop, and at many well- known retail outlets such as Hot Topic and Target. We are developing new offerings across a broad range of categories with best in class licensees, including American Classics, Ripple Junction, Goodie Two-Sleeves, Hot Toys, Funko and more.
Our merchandise is available in the 12 Table of Contents Lionsgate Shop, our official e-commerce shop, and at many well- known retail outlets such as Hot Topic, Walmart and Target. We are developing new offerings across a broad range of categories with best-in-class licensees, including LEGO, American Classics, Ripple Junction, Goodie Two-Sleeves, Hot Toys, Funko and more.
Within the Media Networks segment, revenues were generated from the following: • Starz Networks, 90.3%; • LIONSGATE+, 9.7% Corporate Strategy We manage a large and diversified portfolio of film and television content that we license to theatrical exhibitors, streaming, broadcast, pay cable and other platform partners worldwide.
Within the Media Networks segment, revenues were generated from the following: • Starz Networks, 86.6%; • LIONSGATE+, 13.4% Corporate Strategy We manage a large and diversified portfolio of film and television content that we license to theatrical exhibitors, streaming, broadcast, pay cable and other platform partners worldwide.
SVOD services to which we license our content include, among others, Netflix, Hulu, Amazon’s Prime Video, Peacock, Paramount+ and Max; ad-supported video-on-demand services to which we license our content include, among others, The Roku Channel, Tubi TV, YouTube, Freevee, Samsung and Pluto; and linear networks to which we distribute our content include, among others, pay television networks such as STARZ, EPIX, HBO and Showtime, and basic cable network groups such as NBCUniversal Cable Entertainment, Paramount Global Domestic Media Networks, Disney Media & Entertainment Distribution Networks, Warner Media Entertainment Networks, A+E Networks and AMC Networks, as well as Bounce, Telemundo and UniMás.
Transactional video-on-demand services to which we license our content include, among others, Prime Video, Apple TV, Fandango at Home, YouTube, Google TV, Comcast Xfinity and Microsoft Movies & TV; SVOD services to which we license our content include, among others, Netflix, Hulu, Amazon’s Prime Video, Peacock, Paramount+ and Max; ad-supported video-on-demand services to which we license our content include, among others, The Roku Channel, Tubi TV, YouTube, Samsung and Pluto; and linear networks to which we distribute our content include, among others, pay television networks such as STARZ, EPIX, HBO and Showtime, and basic cable network groups such as NBCUniversal Cable Entertainment, Paramount Global Domestic Media Networks, Disney Media & Entertainment Distribution Networks, Warner Media Entertainment Networks and AMC Networks, as well as Bounce, Telemundo and UniMás.
Through our local office in Mumbai, we manage the following activities: • License our feature films, television series, library content to local linear and digital platforms; • Appoint and work closely with theatrical distribution partners to maximize box office for our films; • Partner with local production companies, as well as develop in-house, Indian local language television series and feature films for distribution across other media platforms; • Continue to expand our STARZ’s offering in the region and across emerging Asian markets (branded as Lionsgate Play), through our direct-to-consumer launch and in collaboration with telco and broadband partners, Amazon and Apple TV; and • Explore investment opportunities throughout the South Asian and South East Asian media market.
Through our local office in Mumbai, we manage the following activities: • Appoint and work closely with theatrical distribution partners to maximize box office for our films; • Partner with local production companies, as well as develop in-house, Indian local language television series and feature films for distribution across other media platforms; • Offer STARZ in the region and across emerging Asian markets, through our direct-to-consumer product and in collaboration with telco and broadband partners, Amazon and Apple TV; and • Explore investment opportunities throughout the South Asian and South East Asian media market.
Our flagship premium service STARZ had 20.3 million subscribers as of March 31, 2023 (not including subscribers who receive programming free as part of a promotional offer). STARZ offers premium original series and recently released and library movies without advertisements.
Our flagship premium service STARZ had 21.8 million subscribers as of March 31, 2024 (total North America not including subscribers who receive programming free as part of a promotional offer). STARZ offers premium original series and recently released library movies without advertisements.
We are focused on developing and distributing authentic and engaging programming that resonates with women, African American, Latinx and LGBTQIA audiences, all of which have been traditionally underserved in the premium television space. Across our digital platforms, the STARZ app provides an alternative for subscribers looking for a competitively priced option.
We are focused on developing and distributing authentic and engaging original programming that resonates with audiences that have been traditionally underrepresented in the premium television space. Across our digital platforms, the STARZ app provides an alternative for subscribers looking for a competitively priced option.
The Starz Domestic Platform together with the LIONSGATE+ platforms are referred to as the “Starz Platforms.” Segment Revenue For the year ended March 31, 2023, contributions to the Company’s consolidated revenues from its reporting segments included Motion Picture 34.3%, Television Production 45.7% and Media Networks 40.1%, and intersegment revenue eliminations represented (20.1)% of consolidated revenues.
The Starz Domestic Platform together with the LIONSGATE+ platforms are referred to as the “Starz Platforms.” Segment Revenue For the year ended March 31, 2024, contributions to the Company’s consolidated revenues from its reporting segments included Motion Picture 41.2%, Television Production 33.1% and Media Networks 39.2%, and intersegment revenue eliminations represented (13.6)% of consolidated revenues.
We license rights in all media on a territory-by-territory basis (other than the territories where we self-distribute) of (i) our in-house Lionsgate and Summit Entertainment feature film product, and (ii) films produced by third parties such as Silver Reel, Buzzfeed, Ace Entertainment and other independent producers.
We license rights in all media on a territory-by-territory basis (other than the territories where we self-distribute) of (i) our in-house feature film product, and (ii) films produced by third parties such as Ace Entertainment, Buzzfeed, Fifth Season, Asbury Park Pictures and Endurance Media.
Therefore, we typically incur losses with respect to a particular film prior to and during the film’s theatrical exhibition, and profitability for the film may not be realized until after its theatrical release window.
For instance, marketing costs are generally incurred before and throughout the theatrical release of a film and are expensed as incurred. Therefore, we typically incur losses with respect to a particular film prior to and during the film’s theatrical exhibition, and profitability for the film may not be realized until after its theatrical release window.
Our Interactive Entertainment business focuses on growing a slate that includes games across PC/console, mobile, virtual reality and more, both through stand-alone games based solely on our content and the integration of our properties with marquee games such as Call of Duty , Dead By Daylight and Evil Dead: The Game , as well as Web3 projects, including the SANDBOX. 11 Table of Contents Our Location Based Entertainment business licenses and produces our Lionsgate, theatrical, and television brands for theme parks, destinations, and stand-alone attractions and experiences.
Our Interactive Entertainment business focuses on growing a slate that includes games across PC/console, mobile, virtual reality and more, both through stand-alone games based solely on our content and the integration of our properties with marquee games such as Call of Duty , Dead By Daylight , Roblox, and Fortnite , as well as Web3 projects, including the SANDBOX.
Media Networks - LIONSGATE+ - International Starz is available in nearly 50 countries outside the U.S. through our four (4) international branded services: LIONSGATE+ in the UK, Ireland, Latin America and Australia; STARZ in Canada; LIONSGATE PLAY in India; and through our STARZPLAY Arabia joint venture in the Middle East and North Africa.
Media Networks - International Starz is available outside the U.S. through STARZ in Canada; LIONSGATE PLAY in India; and through our STARZPLAY Arabia joint venture in the Middle East and North Africa.
We also distribute theatrical titles in Latin America through our partnership with International Distribution Company, as well as theatrical rights in Canada through our prior partnership with Mongrel Media and our new distribution arrangement with Cineplex. We also self-distribute motion pictures in the United Kingdom and Ireland through Lions Gate International UK (“Lionsgate UK”).
We also distribute theatrical titles in Latin America through International Distribution Company, and theatrical rights in Canada through Cineplex Pictures. 11 Table of Contents We also self-distribute motion pictures in the United Kingdom and Ireland through our subsidiary, Lions Gate International (UK) Limited (“Lionsgate UK”).
This consists of resource groups for the Asian American Pacific Islander community, the Black community and the Latine community. • Lionsgate Parents and Caregivers Group aims to bring together parents, expecting parents, caregivers, and allies to ensure our community fosters an environment that supports all families. • Lionsgate Pride supports, develops and inspires future LGBTQIA leaders within the Company and the industry. • Lionsgate Vets creates a community of veterans and their supporters working together to enhance veteran presence and engage the industry from the unique perspective of a military background. • Lionsgate Women’s Empowerment Group creates a community that improves the prominence of female leaders and empowers women at all levels within the Company and the industry.
The ERGs are voluntary, employee-led groups that foster a diverse, engaging, and inclusive workplace. • Lionsgate Early Career Group aims to inspire curiosity and networking to foster growth for professionals in early stages of their careers. • Lionsgate Multicultural Employee Resource Group advocates for a more inclusive workplace and entertainment landscape through programs that educate, activate and celebrate multicultural diversity and its global impact; consists of resource groups for the Asian American Pacific Islander community, the Black community and the Latine community. • Lionsgate Parents Group aims to bring together parents, expecting parents, caregivers, and allies to ensure our community fosters an environment that supports all families. • Lionsgate Pride supports, develops and inspires future LGBTQIA+ leaders within the Company and the industry. • Lionsgate Vets creates a community of veterans and their supporters working together to enhance veteran presence and engage the industry from the unique perspective of a military background. • Lionsgate Women’s Empowerment Group creates a community that improves the prominence of female leaders and empowers women at all levels within the Company and the industry.
A summary of significant output and library programming agreements (including a library agreement with Lionsgate) are as follows: Significant output programming agreements Significant library programming agreements Studio Studio Lionsgate Paramount Sony Warner Bros Universal Twentieth Century Fox MGM Sony Pictures Lionsgate Universal Our output agreements generally require us to pay for movies at rates calculated on a pricing grid that is based on each film’s domestic box office performance (subject to maximum amounts payable per movie and a cap on the number of movies that can be put to Starz each year).
Our output agreements generally require us to pay for movies at rates calculated on a pricing grid that is based on each film’s domestic box office performance (subject to maximum amounts payable per movie and a cap on the number of movies that can be put to Starz each year).
Within the Motion Picture segment, revenues were generated from the following: • Theatrical, 9.1%; • Home Entertainment, 45.1%; • Television, 16.5%; • International, 27.6%; and • Motion Picture-Other, 1.7%. Within the Television Production segment, revenues were generated from the following: • Television, 65.0%; • International, 15.8%; • Home Entertainment, 13.9%; and • Television Production-Other, 5.3%.
Within the Motion Picture segment, revenues were generated from the following: • Theatrical, 13.7%; • Home Entertainment, 44.4%; • Television, 16.6%; • International, 23.6%; and • Motion Picture-Other, 1.7%. Within the Television Production segment, revenues were generated from the following: • Television, 59.3%; • International, 17.2%; • Home Entertainment, 18.2%; and • Television Production-Other, 5.3%.
The proliferation of unauthorized copies of these products has had and will likely continue to have an adverse effect on our business, because these products may reduce the revenue we receive from our products.
The proliferation of these unauthorized copies has had and will likely continue to have an adverse effect on our business, because these products may reduce the revenue we receive from our products. Our ability to safeguard and enforce our intellectual property rights is subject to inherent risks, and we occasionally face disputes concerning rights and obligations related to intellectual property.
There may be further material changes in the law and regulatory requirements in the future. JOINT VENTURES, PARTNERSHIPS AND OWNERSHIP INTERESTS Our joint ventures, partnerships and ownership interests support our strategy of being a multiplatform global industry leader in entertainment.
JOINT VENTURES, PARTNERSHIPS AND OWNERSHIP INTERESTS Our joint ventures, partnerships and ownership interests support our strategy of being a multiplatform global industry leader in entertainment.
Generally, except on a VOD or pay-per-view basis, no other linear service, online streaming or other video service may air or stream these recent releases during Starz’s windows.
Under these agreements, Starz has valuable exclusive rights to air these new movies on linear television services, on-demand or online during specific windows. Generally, except on a transactional on-demand or pay-per-view basis, no other linear service, online streaming or other video service may air or stream these recent releases during Starz’s windows.
Motion Picture - Television We license our theatrical productions and acquired films to the domestic linear pay, basic cable and free television markets. For additional information regarding such distribution, see Motion Picture-Home Entertainment - Digital Media above. Motion Picture - International Our international sales operations are headquartered at our offices in London, England.
For additional information regarding such distribution, see Motion Picture-Home Entertainment - Digital Media above. Motion Picture - International Our international sales operations are headquartered at our offices in London, England.
Home entertainment revenue consists of packaged media and digital revenue. Packaged Media Packaged media distribution involves the marketing, promotion, sale and/or lease of DVDs/Blu-ray/4K Ultra HD discs to wholesalers and retailers in the U.S. and Canada who then sell or rent such discs to consumers for private viewing.
Home entertainment revenue consists of packaged media and digital revenue. 10 Table of Contents Packaged Media Packaged media distribution involves the marketing, promotion and/or sale of DVDs/Blu-ray/4K Ultra HD discs to wholesalers and retailers in the U.S. and Canada. Fulfillment of physical distribution services are substantially licensed to Sony Pictures Home Entertainment.
Digital Media We consider alternative distribution strategies for our films and releases several titles solely and/ or in an accelerated post-theatrical window on various digital platforms (including multi-platform distribution).
We distribute or sell content directly to retailers such as Wal-Mart, Target, Amazon and others who buy large volumes of our discs to sell directly to consumers. Digital Media We consider alternative distribution strategies for our films and releases several titles solely and/ or in an accelerated post-theatrical window on various digital platforms (including multi-platform distribution).
We have announced multiple live entertainment projects, including Wonder , Nashville and La La Land for Broadway, as well as a live dance show inspired by our Step Up film franchise in partnership with Channing Tatum and Free Association.
We have announced multiple live entertainment projects, including Wonder , Nashville and La La Land for Broadway, The Hunger Games for London, as well as a live dance show inspired by our Step-Up film franchise. Live to film concerts currently touring globally include La La Land , Dirty Dancing and Twilight .
We regularly evaluate our existing properties, libraries and other assets and businesses in order to determine whether they continue to enhance our competitive position in the industry, have the potential to generate significant long-term returns, represent an optimal use of our capital, and are aligned with our goals.
We actively assess our portfolio of properties, libraries, and assets to ensure they continue to enhance our competitive position in the industry, offer potential for significant long-term returns, optimize the use of our capital, and are aligned with our goals.
The rights agreements for library content are of varying duration and generally permit Starz’s services to exhibit these movies, series and other programming during certain window periods.
The rights agreements for library content are of varying duration and generally permit Starz’s services to exhibit these movies, series and other programming during certain window periods. 18 Table of Contents A summary of significant output and library programming agreements (including a library agreement with Lionsgate) are as follows: Significant output programming agreements Significant library programming agreements Studio Studio Lionsgate Lionsgate Universal Universal Sony Sony Twentieth Century Fox Warner Bros.
These satellites feed our signals to various swaths of the Americas. We lease these transponders under recently renewed multi-year agreements. We currently transmit to these satellites from our uplink center in Englewood, Colorado, but will be moving our primary uplink facilities from the Englewood location and outsourcing them to a third party starting in the fall of 2023.
These satellites feed our signals to various swaths of the Americas. We lease these transponders under multi-year agreements. We currently transmit to these satellites from our primary uplink facilities, which are provided by a third-party vendor.
Starz Networks contracts with Lionsgate’s Television Production segment and other independent studios and production companies to produce original programming that appears on our Starz services.
STARZ also has brought audiences groundbreaking new series including “P-Valley,” “BMF,” and “The Serpent Queen,” among many others. Starz Networks contracts with Lionsgate’s Television Production segment and other independent studios and production companies to produce original programming that appears on our Starz services.
Theatrical Releases For the fiscal year ended March 31, 2023, we released twenty (20) films theatrically in the U.S. across our labels (including our partnership with Roadside Attractions).
Theatrical Releases For the fiscal year ended March 31, 2024, we released twenty-six (26) films theatrically in the U.S. across our labels (including our partnership with Roadside Attractions). Such titles and their release patterns included the following: Fiscal 2024 Theatrical Releases Title Theatrical Release Date Release Pattern Label Are You There God?
We compete with companies within the entertainment and media business and from alternative forms of leisure entertainment, such as travel, sporting events, outdoor recreation and other cultural related activities.
We cannot guarantee success in all intellectual property disputes that may arise. Competitive Conditions Our businesses operate in highly competitive markets. We compete with companies within the entertainment and media business and from alternative forms of leisure entertainment, such as travel, sporting events, outdoor recreation and various cultural activities.
As a result, we may, from time to time, determine to sell individual properties, libraries or other assets or businesses or enter into additional joint ventures, strategic transactions and similar arrangements for individual properties, libraries or other assets or businesses. 20 Table of Contents Intellectual Property We currently use and own or license a number of trademarks, service marks, copyrights, domain names and similar intellectual property in connection with our businesses and own registrations and applications to register them both domestically and internationally.
As a result, we may, from time to time, determine to sell individual properties, libraries or other assets or businesses or enter into additional joint ventures, strategic transactions and similar arrangements for individual properties, libraries or other assets or businesses.
Third party films for which we were engaged as exclusive sales agent and/or released by us internationally in fiscal 2023 included Paradise Highwa y. 10 Table of Contents Through our territory-by-territory sales and output arrangements, we generally cover a substantial portion of the production budget or acquisition cost of new theatrical releases which we license and distribute internationally.
Through our territory-by-territory sales and an output arrangement in France (for all rights for all media, including home entertainment and television rights), we generally cover a substantial portion of the production budget or acquisition cost of new theatrical releases which we license and distribute internationally.
Motion picture and television piracy is extensive in many parts of the world, including South America, Asia and certain Eastern European countries, and is made easier by technological advances and the conversion of content into digital formats. This trend facilitates the creation, transmission and sharing of high quality unauthorized copies of content on packaged media and through digital formats.
The prevalence of motion picture and television piracy is widespread across various regions globally, notably in South America, Asia, and specific Eastern European countries. This is exacerbated by technological advancements and the digital transformation of content, facilitating the unauthorized creation, distribution, and sharing of high-quality copies through physical media and digital platforms.
Television Production- International We continue to expand our television business through international sales and distribution of original Lionsgate television series, Starz original programming, third party television programming and format acquisitions via packaged media and various digital platforms. Lionsgate UK also continues to build a robust television business alongside its premier film brand through its various joint ventures and investments.
Television Production- International We license, sale and distribute original Lionsgate television series (including Lionsgate UK television programming), Starz original programming, third party television programming and format acquisitions to international markets via packaged media 15 Table of Contents and various digital platforms.
Key components of the framework 21 Table of Contents include bias free job descriptions, inclusive hiring training, external diversity partners, diverse candidate slates, and diverse, cross-functional interview panels. • Supplier Diversity and Inclusion Program: The mission of our Supplier Diversity and Inclusion Program is to actively establish relationships with diverse businesses and to continuously strive to increase spend with diverse suppliers, while delivering more competitive pricing, quality, service, innovation and creativity in procurement of services.
The core principle of our hiring process is to seek out the 21 Table of Contents strongest candidate for every role, while also emphasizing diversity, equal access to roles, objective and unbiased hiring and a rigorous, competitive, and consistent hiring process. • Supplier Diversity and Inclusion Program actively fostering relationships with diverse businesses and continually striving to increase spend with diverse suppliers, while prioritizing more competitive pricing, quality, service, innovation and creativity in procurement of services.
Our Consumer Products business licenses and develops products around our leading film and television properties, including John Wick , The Hunger Games , Twilight , Saw and Mad Men . In July 2022, we signed an agreement with IMG for global consumer products representation.
We have also partnered with Six Flags to open SAW themed haunted houses across multiple Six Flags theme parks during the Halloween season. Our Consumer Products business licenses and develops products around our leading film and television properties, including John Wick , The Hunger Games , Twilight , Dirty Dancing, Saw and Ghosts .
As with film production, we use tax credits, subsidies, and other incentive programs for television production in order to maximize our returns and ensure fiscally responsible production models.
Similar to our film production practices, we leverage tax credits, subsidies, and other incentive programs to optimize our returns and maintain financially prudent production models for television content. Television Production - Television Lionsgate Television We currently produce, syndicate and distribute 100 television shows on more than 50 networks.
Removed
For instance, marketing costs are generally incurred before and throughout the theatrical release of a film and, to a lesser extent, other distribution windows, and are expensed as incurred.
Added
On May 13, 2024, we consummated the business combination which resulted in the launch of Lionsgate Studios. As of May 14, 2024, the common shares of our Studio Business trades on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “LION.” See Business Combination below for additional information.
Removed
We also made changes to release dates as well as release strategies of several of our films by releasing solely and/or earlier on streaming platforms, initially releasing on premium video-on-demand (“PVOD”), premium electronic sell-through, or by licensing directly to streaming platforms.
Added
It’s Me, Margaret April 28, 2023 Theatrical and Accelerated Home Entertainment Lionsgate Sisu April 28, 2023 Theatrical and Premium Video-on-Demand Lionsgate 8 Table of Contents About My Father May 26, 2023 Theatrical and Premium Video-on-Demand Lionsgate The Blackening June 16, 2023 Theatrical and Premium Video-on-Demand Lionsgate Joy Ride July 7, 2023 Theatrical and Premium Video-on-Demand Lionsgate Expend4bles September 22, 2023 Theatrical and Premium Video-on-Demand Lionsgate Saw X September 29, 2023 Theatrical and Premium Video-on-Demand Lionsgate The Hunger Games: The Ballad of Songbirds & Snakes November 17, 2023 Theatrical and Premium Video-on-Demand Lionsgate Silent Night December 1, 2023 Theatrical and Premium Video-on-Demand Lionsgate Ordinary Angels February 23, 2024 Theatrical and Premium Video-on-Demand Lionsgate Imaginary March 8, 2024 Theatrical and Premium Video-on-Demand Lionsgate Arthur the King March 15, 2024 Theatrical and Premium Video-on-Demand Lionsgate 9 Table of Contents Fiscal 2024 Theatrical Releases Title Theatrical Release Date Release Pattern Label Somewhere in Queens April 21, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions Fool's Paradise May 15, 2023 Theatrical and Premium Video-on-Demand Roadside Attractions The Last Rider June 23, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions Black Ice July 14, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions Dreamin' Wild August 4, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions Retribution August 25, 2023 Theatrical and Premium Video-on-Demand Roadside Attractions Camp Hideout September 15, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions The Marsh King's Daughter November 3, 2023 Theatrical and Premium Video-on-Demand Roadside Attractions Beyond Utopia November 3, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions Scrambled February 2, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions The Monk and the Gun February 9, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions Bring Him to Me February 23, 2024 Multi-platform Theatrical and Home Entertainment Roadside Attractions Accidental Texan March 8, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions Asphalt City March 29, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions We continue to evaluate release strategies of our films by releasing solely and/or earlier on streaming platforms, initially releasing on premium video-on-demand, premium electronic sell-through, or by licensing directly to streaming platforms.
Removed
For the fiscal year ended March 31, 2023, such titles and their release patterns included the following: 8 Table of Contents Fiscal 2023 Theatrical Releases Title Theatrical Release Date Release Pattern Label The Unbearable Weight Of Massive Talent April 22, 2022 Theatrical and Accelerated Home Entertainment Lionsgate Fall August 12, 2022 Theatrical and Accelerated Home Entertainment Lionsgate Clerks III September 13, 2022 Eventized Theatrical Lionsgate Prey for the Devil October 28, 2022 Theatrical and Accelerated Home Entertainment Lionsgate Plane January 13, 2023 Theatrical and Premium Video-on-Demand Lionsgate Jesus Revolution February 22, 2023 Theatrical and Accelerated Home Entertainment Lionsgate My Happy Ending February 24, 2023 Theatrical and Accelerated Home Entertainment Lionsgate Moving On March 17, 2023 Theatrical and Accelerated Home Entertainment Lionsgate Operation Fortune: Ruse de Guerre March 21, 2023 Theatrical and Premium Video-on-Demand Lionsgate John Wick: Chapter 4 March 24, 2023 Theatrical and Accelerated Home Entertainment Lionsgate Fiscal 2023 Theatrical Releases Title Theatrical Release Date Release Pattern Label Aline April 8, 2022 Theatrical and Accelerated Home Entertainment Roadside Attractions Firebird April 29, 2022 Theatrical and Accelerated Home Entertainment Roadside Attractions Family Camp May 13, 2022 Theatrical and Accelerated Home Entertainment Roadside Attractions Benediction June 3, 2022 Theatrical and Accelerated Home Entertainment Roadside Attractions The Forgiven July 1, 2022 Theatrical and Premium Video-on-Demand Roadside Attractions Emily the Criminal August 12, 2022 Theatrical and Premium Video-on-Demand Roadside Attractions Gigi & Nate September 2, 2022 Theatrical and Accelerated Home Entertainment Roadside Attractions The Good House September 30, 2022 Theatrical and Premium Video-on-Demand Roadside Attractions Call Jane October 28, 2022 Theatrical and Accelerated Home Entertainment Roadside Attractions To the End December 9, 2022 Theatrical and Accelerated Home Entertainment Roadside Attractions Nominations and Awards Lionsgate and affiliated companies (including its wholly-owned subsidiaries, Artisan Pictures, Mandate Pictures and Summit Entertainment, and Roadside Attractions, of which Lionsgate owns a 43% equity interest) have distributed films that have earned 134 Academy Award® nominations and 32 wins, as well as numerous Golden Globe Awards®, Producers Guild Awards®, Screen Actors Guild Awards®, Directors Guild Awards®, BAFTA Awards and Independent Spirit Awards nominations and wins. 9 Table of Contents Motion Picture - Home Entertainment Our U.S. home entertainment distribution operation exploits our film and television content library of 18,000 motion picture titles and television episodes and programs, consisting of titles from, among others, Lionsgate, our subsidiaries, affiliates and joint ventures (such as STARZ, Summit Entertainment, Anchor Bay Entertainment, Artisan Entertainment, Grindstone Entertainment Group, Roadside Attractions, Trimark and Vestron), as well as titles from third parties such as A24, A&E, AMC, Entertainment Studios, Saban Entertainment, StudioCanal, Zoetrope, Gravitas, and Tyler Perry Studios.
Added
Nominations and Awards Lionsgate and affiliated companies (including its wholly-owned subsidiaries, Artisan Pictures, Mandate Pictures and Summit Entertainment, and Roadside Attractions, of which Lionsgate owns a 43% equity interest) have distributed films that have earned numerous Academy Award®, Golden Globe Awards®, Producers Guild Awards®, Screen Actors Guild Awards®, Directors Guild Awards®, BAFTA Awards and Independent Spirit Awards nominations and wins.
Removed
Fulfillment of physical distribution services are substantially licensed to Sony Pictures Home Entertainment. We distribute or sell content directly to retailers such as Wal-Mart, Best Buy, Target, Amazon and others who buy large volumes of our discs to sell directly to consumers. We also directly distribute content to the rental market through Redbox, Netflix and others.
Added
Motion Picture - Home Entertainment Our U.S. home entertainment distribution operation exploits our extensive film and television content library of more than 20,000 motion picture titles and television episodes and programs, consisting of titles from, among others, Lionsgate, our subsidiaries, affiliates and joint ventures (such as Anchor Bay Entertainment, Artisan Entertainment, eOne, Grindstone Entertainment Group, Roadside Attractions, STARZ, Summit Entertainment, Trimark and Vestron), as well as titles from third parties such as A24, A&E, AMC, Entertainment Studios, Gravitas, Saban Entertainment, StudioCanal, STX Entertainment, Tyler Perry Studios Visiona Romantica and Zoetrope.
Removed
Films licensed and/or released by us internationally in fiscal 2023 included such in-house productions as John Wick: Chapter Four, Unbearable Weight of Massive Talent , Prey For the Devil , Bagman , Dirty Dancing , Mindcage , Motherland , Alice Darling , Ballad of Songbirds and Snakes , One Ranger , Untitled Saw, Float , Puppy Love , Love in Taipei , The Blackening , Imaginary and Miller’s Girl .
Added
Additionally, we own and operate a suite of 13 multi-content and single series FAST channels carried by various platforms including, among others, Samsung, The Roku Channel and Pluto. Motion Picture - Television We license our theatrical productions and acquired films to the domestic linear pay, basic cable and free television markets.
Removed
Our output agreements for Lionsgate and Summit feature films currently cover Scandinavia and France. These output agreements generally include all rights for all media (including home entertainment and television rights).
Added
Films licensed and/or released by us internationally in fiscal 2024, included such in-house productions as The Hunger Games: The Ballad of Songbirds & Snakes , Are You There God?
Removed
Lionsgate UK has established a reputation in the United Kingdom as a leading producer, distributor and acquirer of commercially successful and critically acclaimed product.
Added
It’s Me Margaret , About My Father , Joy Ride , Saw X , Highlander , Now You See Me 3 , Michael , Imaginary , Never Let Go (f/k/a Motherland) and Miller’s Girl , as well as films produced by third parties such as Flight Risk , Anniversary , Ordinary Angels , Unsung Hero , The Blackening , The Strangers Trilogy , One Ranger , Float , Puppy Love , Love in Taipei and Love at First Sight .
Removed
Following the closures and gradual re-opening of theatres during fiscal years 2021 and 2022 as a result of the COVID-19 global pandemic, we were able to release more titles theatrically through Lionsgate UK in fiscal 2023 than in such previous years, including the following: Fiscal 2023 Lionsgate UK Title Theatrical Release Date The Unbearable Weight of Massive Talent April 22, 2022 Good Luck To You Leo Grande June 17, 2022 Clerks III September 15, 2022 Prey For The Devil October 28, 2022 Triangle of Sadness October 28, 2022 Living November 4, 2022 Alice, Darling January 20, 2023 Plane January 27, 2023 John Wick: Chapter 4 March 24, 2023 Additionally, our office in India manages operations and growth opportunities in the South Asian/Indian sub-continent.
Added
Third-party films for which we were engaged as exclusive sales agent and/or released by us internationally in fiscal 2024 included Bone Yard and The Fabulous Four .
Removed
In January 2022, we opened an expansion of the Lionsgate zone at Motiongate Dubai featuring new John Wick and Now You See Me attractions, and in February 2023, we opened Saw: The Experience in London.
Added
For the fiscal year ended March 31, 2024, Lionsgate UK released the following theatrical titles: Fiscal 2024 Lionsgate UK Title Release Date Are You There God?
Removed
Television Production - Television Lionsgate Television We currently produce, syndicate and distribute nearly 80 television shows on more than 35 networks (including programming produced by Pilgrim Media Group, of which we own a majority interest).
Added
It’s Me, Margaret May 19, 2023 Joy Ride August 4, 2023 Cobweb September 1, 2023 Expend4bles September 22, 2023 Saw X September 29, 2023 The Miracle Club October 13, 2023 Anatomy of a Fall November 10, 2023 The Hunger Games: The Ballad of Songbirds & Snakes November 17, 2023 The Iron Claw February 9, 2024 Imaginary March 8, 2024 Additionally, our office in India manages operations and growth opportunities in the South Asian/Indian sub-continent.
Removed
For the fiscal year ended March 31, 2023, scripted and unscripted programming produced, co-produced or distributed by us and our affiliated entities (see Starz Original Programming below for original programming that appears on our STARZ services), as well as programming syndicated by our wholly-owned subsidiary, Debmar-Mercury, included the following: 12 Table of Contents Fiscal 2023 Fiscal 2023 Scripted - Lionsgate Unscripted - Lionsgate Title Network Title Network Acapulco Apple 1619 Hulu Black Mafia Family STARZ Derbez Family Vacation Pantaya Blindspotting STARZ Hip Hop Homicides WE TV Dangerous Liaisons STARZ House of Ho Max Ghosts CBS Selling Sunset Netflix Heels STARZ Selling the OC Netflix Hightown STARZ Home Economics ABC Julia Max Love & Death Max Minx STARZ Mythic Quest Apple Party Down STARZ Paul T.
Added
Our Location Based Entertainment business licenses and produces our Lionsgate, theatrical, and television brands for theme parks, destinations, and stand-alone attractions and experiences.
Removed
Goldman Peacock Power Book II: Ghost STARZ Power Book III: Raising Kanan STARZ Power Book IV: Force STARZ P-Valley STARZ Run the World STARZ Serpent Queen STARZ The First Lady Showtime We Thought We Were Done NBC Welcome to Flatch Fox 13 Table of Contents Fiscal 2023 Fiscal 2023 Unscripted - Pilgrim Media Group Syndication - Debmar-Mercury Title Network Title Fox Nation - Jussie Smollet Fox Nation Family Feud Ghost Hunters 3.0 Discovery Nick Cannon Hoffman Family Gold Discovery Schitt's Creek Horse for Dogs Animal Planet Sherri Shepherd My Big Fat Fabulous Life TLC Wendy Williams Renovation Impossible Discovery Power Slap: Road to the Title TBS Steve Austin A&E Street Outlaws Discovery Street Outlaws: America's List Discovery Street Outlaws: Endgame Discovery Street Outlaws: Farm Truck & AZN Discovery Street Outlaws: Fastest in America Discovery Street Outlaws: Gone Girl Discovery Street Outlaws: No Prep Kings Grudge Night Discovery The Ultimate Fighter ESPN+ UFO Live Discovery Wicked Tuna Nat Geo Wicked Tuna Outer Banks Nat Geo Zombie Flippers A&E Hoffman Family Gold Fox Nation Starz Original Programming For information regarding production of Starz original programming, see Media Networks - Starz Networks - Starz Original Programming.
Added
Attractions based on The Hunger Games , John Wick , Now You See Me , SAW and other of our intellectual property can be found at theme parks and destinations in the United States, United Kingdom, and the Middle East, including the John Wick Experience opening in Las Vegas later in 2024.
Removed
STARZ also has brought audiences groundbreaking new series including “P-Valley,” “BMF,” and “The Serpent Queen,” among many others. STARZ is dedicated to bringing its audiences new content throughout the year with approximately 100 new episodes on its slate each year.

… 53 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

123 edited+66 added−36 removed126 unchanged
Biggest changeOur high level of debt could have adverse consequences on our business, such as: making it more difficult for us to satisfy our obligations with respect to our notes and our other debt; limiting our ability to refinance such indebtedness or to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements; requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; increasing our vulnerability to global pandemics, economic downturns and adverse developments in our business; exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the revolving credit facility, Term Loan A and Term Loan B (the "Senior Credit Facilities"), and borrowings under our film related obligations, are at variable rates of interest; limiting our flexibility in planning for, and reducing our flexibility in reacting to, changes in the conditions of the financial markets and our industry; placing us at a competitive disadvantage compared to other, less leveraged competitors; increasing our cost of borrowing; and restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness and exposing us to potential events of default (if not cured or waived) under covenants contained in our debt instruments. 35 Table of Contents We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Biggest changeOur high level of debt could have adverse consequences on our business, such as: • requiring a substantial portion of our cash flow from operations to make interest payments; • making it more difficult for us to satisfy debt service and other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; 37 Table of Contents • reducing cash flow available for working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to general adverse economic and industry conditions; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry; • placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and • increasing our cost of borrowing; and • restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness and exposing us to potential events of default (if not cured or waived) under covenants contained in our debt instruments.
Certain data privacy and security obligations may require us to implement and maintain specific security measures, industry-standard or reasonable security measures to protect our information technology systems and sensitive information. While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
Certain data privacy and security obligations may require us to implement and maintain specific industry-standard or reasonable security measures to protect our information technology systems and sensitive information. While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
If distributors refuse to carry our services, choose to offer, market, promote and/or position affiliated services more favorably than our services or take actions that are detrimental to STARZ and LIONSGATE+ in terms of owned or controlled marketing channels, app stores or distribution platforms, it could have a material adverse effect on our business, financial condition and results of operations.
If distributors refuse to carry our services, choose to offer, market, promote and/or position affiliated services more favorably than our services or take actions that are detrimental to STARZ in terms of owned or controlled marketing channels, app stores or distribution platforms, it could have a material adverse effect on our business, financial condition and results of operations.
Service disruptions or failures of the Company’s or our third-party service providers’ information systems and networks may disrupt our businesses, damage our reputation, expose us to regulatory investigations, actions, litigation, fines and penalties or have a negative impact on our results of operations including but not limited to loss of revenue or profit, loss of customers or sales and other adverse consequences.
Service disruptions or failures of the Company’s or our third-party service providers’ information systems, data and networks may disrupt our businesses, damage our reputation, expose us to regulatory investigations, actions, litigation, fines and penalties or have a negative impact on our results of operations including but not limited to loss of revenue or profit, loss of customers or sales and other adverse consequences.
Additionally, some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of the EEA for allegedly violating the GDPR’s cross-border data transfer limitations. We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of the EEA for allegedly violating the GDPR’s cross-border data transfer limitations. We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the indenture governing the Senior Notes, such as certain qualified receivables financings. If new debt is added to our current debt levels, the related risks that we and our guarantors now face could intensify.
These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the indenture governing the New Notes, such as certain qualified receivables financings. If new debt is added to our current debt levels, the related risks that we and our guarantors now face could intensify.
A significant amount of time may elapse between our expenditure of funds and the receipt of revenues after release or distribution of such content and we cannot assure you that we are able to successfully implement arrangements to reduce the risks of production exposure such as tax credit, government or industry programs.
A significant amount of time may elapse between expenditure of funds and the receipt of revenues after release or distribution of such content. We cannot assure you that we are able to successfully implement arrangements to reduce the risks of production exposure such as tax credit, government or industry programs.
Other changes in laws relating to the internet or other areas of our business and the interpretations thereof could cause us to incur additional expenses or otherwise negatively affect our business. Additionally, as we grow our STARZ and LIONSGATE+ direct-to-consumer business, we may be subject to additional consumer legal claims and state and local consumer protection regulation.
Other changes in laws relating to the internet or other areas of our business and the interpretations thereof could cause us to incur additional expenses or otherwise negatively affect our business. Additionally, as we grow our STARZ direct-to-consumer business, we may be subject to additional consumer legal claims and state and local consumer protection regulation.
Rachesky, M.D. and his affiliates, who collectively currently hold over 24% of our voting stock and over 10% of our non-voting common stock are “Permitted Holders” for purposes of the Senior Credit Facilities and the indentures that govern the Senior Notes. Accordingly, certain increases of ownership or other transactions involving Dr.
Rachesky, M.D. and his affiliates, who collectively currently hold over 24% of our voting stock and over 10% of our non-voting common stock are “Permitted Holders” for purposes of the Senior Credit Facilities and the indentures that govern the Senior Notes and the New Notes. Accordingly, certain increases of ownership or other transactions involving Dr.
To an increasing extent, the success of STARZ and LIONSGATE+ depends on exclusive original programming and our ability to accurately predict how audiences will respond to our original programming. We must invest substantial amounts in the production and marketing of our original programming before we learn whether such content will reach anticipated audience acceptance levels.
To an increasing extent, the success of STARZ depends on exclusive original programming and our ability to accurately predict how audiences will respond to our original programming. We must invest substantial amounts in the production and marketing of our original programming before we learn whether such content will reach anticipated audience acceptance levels.
The Senior Credit Facilities and the indenture that governs the Senior Notes restrict our ability to dispose of assets and use the proceeds from those dispositions, and also restrict our ability to raise debt or certain types of equity to be used to repay other indebtedness when it becomes due.
The Senior Credit Facilities and the indenture that governs the New Notes restrict our ability to dispose of assets and use the proceeds from those dispositions, and also restrict our ability to raise debt or certain types of equity to be used to repay other indebtedness when it becomes due.
Upon the occurrence of certain change of control events, an event of default may occur under our Senior Credit Facilities and the holders of the Senior Notes may require us to repurchase all or a portion of such notes. Dr. Mark H.
Upon the occurrence of certain change of control events, an event of default may occur under our Senior Credit Facilities and the holders of the New Notes may require us to repurchase all or a portion of such notes. Dr. Mark H.
Subscribers to our STARZ and LIONSGATE+ direct-to-consumer service pay for our service using a variety of different payment methods, including credit and debit cards. We rely on internal systems and those of third parties to process payment.
Subscribers to our STARZ direct-to-consumer service pay for our service using a variety of different payment methods, including credit and debit cards. We rely on internal systems and those of third parties to process payment.
Our collection and use of personal information may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security .
Our collection and use of personal data may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
The Senior Credit Facilities and the indenture that governs the Senior Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to: incur, assume or guarantee additional indebtedness; issue certain disqualified stock; pay dividends or distributions or redeem or repurchase capital stock; prepay, redeem or repurchase debt that is junior in right of payment to the debt under the Senior Credit Facilities and the Senior Notes; make loans or investments; incur liens; restrict dividends, loans or asset transfers from our restricted subsidiaries; sell or otherwise dispose of assets, 36 Table of Contents including capital stock of subsidiaries and sale/leaseback transactions; consolidate or merge with or into, or sell substantially all of our assets to, another person; enter into transactions with affiliates; and enter into new lines of business.
The Senior Credit Facilities and the indenture that governs the New Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to: incur, assume or guarantee additional indebtedness; issue certain disqualified stock; pay dividends or distributions or redeem or repurchase capital stock; prepay, redeem or repurchase debt that is junior in right of payment to the debt under the Senior Credit Facilities and the New Notes; make loans or investments; incur liens; restrict dividends, loans or asset transfers from our restricted subsidiaries; sell or otherwise dispose of assets, including capital stock of subsidiaries and sale/leaseback transactions; consolidate or merge with or into, or sell substantially all of our assets to, another person; enter into transactions with affiliates; and enter into new lines of business.
If the Section 7874 ownership percentage of the STARZ stockholders in Lions Gate after the merger was less than 80% but at least 60% (the “60% ownership test”), and the substantial business activities test was not met, STARZ and its U.S. affiliates 37 Table of Contents (including the U.S. affiliates historically owned by us) may, in some circumstances, be subject to certain adverse U.S. federal income tax rules (which, among other things, could limit our ability to utilize certain U.S. tax attributes to offset U.S. taxable income, such as the use of net operating losses and certain tax credits, or to offset the gain resulting from certain transactions, such as from the transfer or license of property to a foreign related person during the 10-year period following the merger).
If the Section 7874 ownership percentage of the STARZ stockholders in Lions Gate after the merger was less than 80% but at least 60% (the “60% ownership test”), and the substantial business activities test was not met, STARZ and its U.S. affiliates (including the U.S. affiliates historically owned by us) may, in some circumstances, be subject to certain adverse U.S. federal income tax rules (which, among other things, could limit our ability to utilize certain U.S. tax attributes to offset U.S. taxable income, such as the use of net operating losses and certain tax credits, or to offset the gain resulting from certain transactions, such as from the transfer or license of property to a foreign related person during the 10-year period following the merger).
If these third parties do not continue to provide access to our direct-to-consumer service on their platforms or are unwilling to do so on terms acceptable to us, our business could be adversely affected.
If these third parties do not continue to provide access to our direct-to-consumer service on their platforms or are unwilling to do so on terms acceptable to us, our business could be materially adversely affected.
Accordingly, repayment of our indebtedness, including the Senior Notes, is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise.
Accordingly, repayment of our indebtedness, including the Senior Notes and New Notes, is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise.
Unless they are guarantors of the Senior Notes or our other indebtedness, our subsidiaries do not have any obligation to pay amounts due on the Senior Notes or our other indebtedness or to make funds available for that purpose.
Unless they are guarantors of the Senior Notes, New Notes or our other indebtedness, our subsidiaries do not have any obligation to pay amounts due on the Senior Notes, New Notes or our other indebtedness or to make funds available for that purpose.
The terms of the Senior Credit Facilities and the indenture that governs the Senior Notes restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
The terms of the Senior Credit Facilities and the indenture that governs the New Notes restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
If we are not successful in maintaining existing or creating new relationships with these third parties, our ability to retain subscribers and grow our business could be adversely impacted. We also currently offer the ability to stream our STARZ and LIONSGATE+ direct-to-consumer service through a host of internet-connected devices, including TVs, computers, and mobile devices.
If we are not successful in maintaining existing or creating new relationships with these third parties, our ability to retain subscribers and grow our direct-to-consumer business could be materially adversely impacted. We also currently offer the ability to stream our STARZ direct-to-consumer service through a host of internet-connected devices, including TVs, computers, and mobile devices.
These risks may include: • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • the loss of one or more of the major global partners that we rely upon to distribute our programming internationally; 28 Table of Contents • laws and policies adversely affecting trade, investment and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws; • sanctions imposed on countries, entities and individuals with whom we conduct business (such as those imposed due to Russia’s invasion of Ukraine); • the impact of trade disputes; anti-corruption laws and regulations such as the Foreign Corrupt Practices Act and the U.K.
These risks may include: • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • the loss of one or more of the major global partners that we rely upon to distribute our programming internationally; • laws and policies adversely affecting trade, investment and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws; • sanctions imposed on countries, entities and individuals with whom we conduct business (such as those imposed due to Russia’s invasion of Ukraine); • the impact of trade disputes; • anti-corruption laws and regulations such as the Foreign Corrupt Practices Act and the U.K.
In addition, we conduct a substantial portion of our operations through our subsidiaries, certain of which are not guarantors of the Senior Notes or our other indebtedness.
In addition, we conduct a substantial portion of our operations through our subsidiaries, certain of which are not guarantors of the Senior Notes, New Notes or our other indebtedness.
A reduction in consumer spending or distributor financial difficulties or failures could lead to a decrease in the number of STARZ or LIONSGATE+ subscribers, which could have a materially adverse impact on our business, financial condition and results of operations. Moreover, financial institution failures may make it more difficult to finance any future acquisitions, or engage in other financing activities.
A reduction in consumer spending or distributor financial difficulties or failures could lead to a decrease in the number of subscribers, which could have a materially adverse impact on our business, financial condition and results of operations. Moreover, financial institution failures may make it more difficult to finance any future acquisitions, or engage in other financing activities.
Data Privacy and Security. In the ordinary course of its business, we collect, generate, use, store, process, disclose, transmit, share and transfer (collectively “processing”) personal information and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, and sensitive third-party data, through our websites and applications and those of third parties.
Data Privacy and Security. In the ordinary course of its business, we collect, generate, use, store, process, disclose, transmit, share and transfer (collectively “process”) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, and third-party data, through our websites and applications and those of third parties.
Certain of our distributors also own or control marketing channels, app stores and/or distribution platforms that are important to STARZ and LIONSGATE+.
Certain of our distributors also own or control marketing channels, app stores and/or distribution platforms that are important to STARZ.
Our efforts to attract and retain subscribers for STARZ services may not be successful, which may adversely affect our business. Our ability to continue to attract subscribers will depend in part on our ability to consistently provide compelling content choices, effectively market our services, as well as provide a quality user experience for direct-to-consumer subscribers.
Our efforts to attract and retain subscribers for STARZ services may not be successful, which may adversely affect our business. Our ability to continue to attract subscribers will depend in part on our ability to consistently provide compelling content choices, effectively market our services, as well as provide a quality user experience for our subscribers.
Our future effective tax rates could be affected by changes in tax laws or regulations or the interpretation thereof (including those affecting the allocation of profits and expenses to differing jurisdictions), by changes in the amount of revenue or earnings that we derive 39 Table of Contents from international sources in countries with high or low statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, by changes in the expected timing and amount of the release of any tax valuation allowance, or by the tax effects of stock-based compensation.
Our future effective tax rates could be affected by changes in tax laws or regulations or the interpretation thereof (including those affecting the allocation of profits and expenses to differing jurisdictions), by changes in the amount of revenue or earnings that we derive from international sources in countries with high or low statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, by changes in the expected timing and amount of the release of any tax valuation allowance, or by the tax effects of stock-based compensation.
Our business involves risks of liability claims for content of material, which could adversely affect our business, financial condition and results of operations.
Our business involves risks of claims for content of material, which could adversely affect our business, financial condition and results of operations.
Additionally, we may experience delays and increased expenditures due to disruptions or events beyond our control and if a production incurs substantial budget overruns, we may have to seek additional financing or fund the overrun itself. We cannot make assurances regarding the availability of such additional financing on terms acceptable to us, or that we will recoup these costs.
Moreover, we may experience delays and increased costs due to disruptions or events beyond our control and if a production incurs substantial budget overruns, we may have to seek additional financing or fund the overrun itself. We cannot make assurances regarding the availability of such additional financing on terms acceptable to us, or that we will recoup these costs.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including, but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims); additional reporting requirements and/or oversight; bans on processing personal data; or orders to destroy or not use personal data.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including, but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal data; or orders to destroy or not use personal data.
Furthermore, to the extent that regulations and laws, either presently in force or proposed, hinder or stimulate the growth of the cable television and satellite industries, our network business will be affected. As we continue to expand internationally, we also may be subject to varying degrees of local government regulations.
Furthermore, to the extent that regulations and laws, either presently in force or proposed, hinder or stimulate the growth of the cable television and 35 Table of Contents satellite industries, our network business will be affected. As we continue to expand internationally, we also may be subject to varying degrees of local government regulations.
If any of these risks and uncertainties occur, they could adversely affect our business, financial condition, operating results, liquidity and prospects. 23 Table of Contents Risks Related to Our Business We face substantial capital requirements and financial risks. The production, acquisition and distribution of motion picture and television content requires substantial capital and may subject us to financial risks.
If any of these risks and uncertainties occur, they could adversely affect our business, financial condition, operating results, liquidity and prospects. 23 Table of Contents Risks Related to Our Business We face substantial capital requirements and financial risks. The production, acquisition and distribution of motion picture and television content requires substantial capital.
Bribery Act that impose strict requirements on how we conduct our foreign operations and changes in these laws and regulations; • changes in local regulatory requirements including regulations designed to stimulate local productions, promote and preserve local culture and economic activity (including local content quotas, investment obligations, local ownership requirements, and levies to support local film funds); • differing degrees of consumer protection laws and changes in these laws; • differing degrees of employee or labor laws and changes in these laws that may impact our ability to hire and retain foreign employees; • strikes or other employment actions that may make it difficult to produce and/or localize content; • censorship requirements that may cause us to remove or edit popular content, leading to consumer disappointment, brand tarnishment or consumer dissatisfaction; • regulatory requirements or government action against our service, whether in response to enforcement of actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-availability of our service or particular content in the applicable jurisdiction; • inability to adapt our offerings successfully to differing languages, cultural tastes, and preferences in international markets; • international jurisdictions where laws are less protective of intellectual property and varying attitudes towards the piracy of intellectual property; • establishing and protecting a new brand identity in competitive markets; the instability of foreign economies and governments; • currency exchange restrictions, export controls and currency devaluation risks in some foreign countries; and • the spread of communicable diseases (such as the COVID-19 global pandemic), which may impact business in such jurisdictions.
Bribery Act that impose strict requirements on how we conduct our foreign operations and changes in these laws and regulations; • changes in local regulatory requirements including regulations designed to stimulate local productions, promote and preserve local culture and economic activity (including local content quotas, investment obligations, local ownership requirements, and levies to support local film funds); • differing degrees of consumer protection laws, data privacy and cybersecurity laws and changes in these laws; • differing degrees of employee or labor laws and changes in these laws that may impact our ability to hire and retain foreign employees; • strikes or other employment actions that may make it difficult to produce and/or localize content; • censorship requirements that may cause us to remove or edit popular content, leading to consumer disappointment, brand tarnishment or consumer dissatisfaction; • regulatory requirements or government action against our service, whether in response to enforcement of actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-availability of our service or particular content in the applicable jurisdiction; • inability to adapt our offerings successfully to differing languages, cultural tastes, and preferences in international markets; • international jurisdictions where laws are less protective of intellectual property and varying attitudes towards the piracy of intellectual property; • establishing and protecting a new brand identity in competitive markets; • the instability of foreign economies and governments; • currency exchange restrictions, export controls and currency devaluation risks in some foreign countries; • war and acts of terrorism; and • the spread of communicable diseases, which may impact business in such jurisdictions.
Notwithstanding these precautions, any significant or prolonged interruption of operations at STARZ’s primary facility, and any failure by STARZ’s back-up third-party facility to perform as intended, could have a materially adverse effect on our business, financial condition and results of operations. STARZ’s success in the U.S. is also dependent upon our continued ability to transmit STARZ’s programming to distributors.
Notwithstanding these precautions, any significant or prolonged interruption of operations at STARZ’s primary facility, and any failure by STARZ’s back-up third-party facility to perform as intended, could have a materially adverse effect on our business, financial condition and results of operations. STARZ’s success is also dependent upon our continued ability to transmit STARZ’s programming to distributors.
For the past several years, the primary focus has been in the area of “base erosion and profit 38 Table of Contents shifting,” including situations where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
For the past several years, the primary focus has been in the area of “base erosion and profit shifting,” including situations where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
The ways in which viewers consume content, and technology and business models in our industry, continue to evolve, and new distribution platforms, as well as increased competition from new entrants and emerging technologies, have added to the complexity of maintaining predictable revenues.
The ways in which viewers consume content, and technology and business models in our industry, continue to evolve, and new distribution platforms, as well as increased competition from new entrants and emerging technologies, have added to the complexity of maintaining 25 Table of Contents predictable revenues.
Through new and existing distribution channels, consumers also have increasing options to access entertainment video. Traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet-based e-commerce or entertainment video providers are increasing their streaming video offerings.
Through new and existing distribution channels, consumers also have increasing options to access entertainment video. Traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet-based e- 28 Table of Contents commerce or entertainment video providers are increasing their streaming video offerings.
Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the Senior Notes.
Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the Senior Notes and New Notes.
Moreover, low ratings for television programming produced by us may lead to the cancellation of a program resulting in significant programming impairments in a given period and can negatively affect license fees for the cancelled program in future periods.
Moreover, low ratings for television programming produced by us may lead to the cancellation of a program which may result in significant programming impairments in a given period, and can negatively affect license fees for the cancelled program in future periods.
For example, under the EU GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros or 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros (under the EU GDPR), 17.5 million pounds sterling (under the UK GDPR), or 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive 31 Table of Contents information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Some of these investments may have negative or low short-term returns and the ultimate prospects of the businesses may be uncertain or, in international markets, may not develop at a rate that supports our level of investment.
Some of these investments may have negative or low short-term returns and the ultimate prospects of the businesses may be uncertain or may not develop at a rate that supports our level of investment.
Our results of operations depend significantly upon the commercial success of the motion picture, television and other content that we sell, license or distribute, which cannot be predicted with certainty.
Our revenues and results of operations may fluctuate significantly. Our results of operations depend significantly upon the commercial success of the motion picture, television and other content that we sell, license or distribute, which cannot be predicted with certainty.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018) and Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) impose strict requirements for processing personal data.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR” and together with the EU GDPR, the “EU GDPR”), the EU Digital Services Act, Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018) and Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) impose strict requirements for processing personal data.
If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as: government enforcement actions (; additional reporting requirements and/or oversight; restrictions on processing sensitive information; litigation; indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations; financial loss; and other similar harms.
If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information; litigation; indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations; financial loss; and other similar harms.
Global economic turmoil or economic instability resulting from, such events as, global pandemics, wars, inflation, rising interest rates, bank failures or a recession, may cause a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, levels of intervention from the U.S. federal government and other foreign governments, decreased consumer confidence and spending, overall slower economic activity and extreme volatility in credit, equity and fixed income markets.
Global economic turmoil and economic instability could adversely affect our business. 30 Table of Contents Global economic turmoil or economic instability resulting from, such events as, global pandemics, wars, inflation, rising interest rates, bank failures or a recession, may cause a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, levels of intervention from the U.S. federal government and other foreign governments, decreased consumer confidence and spending, overall slower economic activity and extreme volatility in credit, equity and fixed income markets.
A breach of the covenants under the Senior Credit Facilities or the indenture that governs the Senior Notes, or nonpayment of any principal or interest due thereunder, could result in an event of default under the applicable indebtedness.
A breach of the covenants under the Senior Credit Facilities or the indentures that governs the Senior Notes and the New Notes, or nonpayment of any principal or interest due thereunder, could result in an event of default under the applicable indebtedness.
In addition, the comparability of our results may be affected by changes in accounting guidance or changes in our ownership of certain assets and businesses.
In addition, the comparability of our results may be affected by changes in accounting guidance or changes in our ownership of certain assets 24 Table of Contents and businesses.
While the Senior Credit Facilities and the indentures that govern the Senior Notes limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions.
While the Senior Credit Facilities and the indenture that governs the New Notes limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions.
We cannot assure you that we will be successful in identifying, attracting, hiring, training and retaining such personnel in the future, and our inability to do so could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. Global economic turmoil and economic instability could adversely affect our business.
We cannot assure you that we will be successful in identifying, attracting, hiring, training and retaining such personnel in the future, and our inability to do so could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
If we fail to successfully exploit emerging technologies and effectively anticipate or adapt to emerging competitors, content distribution platforms, changes in consumer behavior and shifting business models, this could have a material adverse effect on our competitive position, business, financial condition and results of operations. Our success depends on the appeal and availability of desired programming.
If we fail to successfully exploit emerging technologies and effectively anticipate or adapt to emerging competitors, content distribution platforms, changes in consumer behavior and shifting business models, this could have a material adverse effect on our competitive position, business, financial condition and results of operations. Our business depends on the appeal of our programming, which is difficult to predict.
These preferences are difficult to predict and are subject to influences beyond our control, such as the critical acclaim of our content, the format in which content is released, the talent involved, the genre and specific subject matter of our content, audience reaction to our content, the quality and acceptance of content that our competitors release into the marketplace, and the availability of alternative forms of entertainment and leisure activities (including user-generated content).
These preferences are difficult to predict and some of which are subject to influences beyond our control, such as the critical acclaim of our content, the format in which content is released, the talent involved, the genre and specific subject matter of our content, audience reaction to our content, the quality and acceptance of content that our competitors release into the marketplace, and the availability of alternative forms of entertainment (including user-generated content) and leisure activities, general economic conditions and other tangible and intangible factors.
Moreover, certain of our competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content, large content libraries, and significant financial, marketing and other resources. Certain of our distributors have affiliated video programming services that they may choose to favor in terms of carriage, marketing and/or placement over STARZ of LIONSGATE+.
Moreover, certain of our competitors have longer operating histories, larger customer bases, stronger brand recognition, larger content libraries, and exclusive rights to certain content, significant financial, marketing and other resources. Certain of our distributors have affiliated video programming services that they may choose to favor in terms of carriage, marketing and/or placement over STARZ.
The proliferation of unauthorized copies of these products has had and will likely continue to have an adverse effect on our business, because these products reduce the revenue we receive from our products.
The 32 Table of Contents proliferation of unauthorized copies of these products has had and will likely continue to have an adverse effect on our business, because these products may reduce the revenue we receive from distribution.
Congress that, if ultimately enacted, could limit the availability of tax benefits or deductions that we currently claim, override tax treaties upon which we rely, or otherwise increase the taxes that the U.S. imposes on our worldwide operations.
Legislative action may be taken by the U.S. Congress that, if ultimately enacted, could limit the availability of tax benefits or deductions that we currently claim, override tax treaties upon which we rely, or otherwise increase the taxes that the U.S. imposes on our worldwide operations.
Additionally, tax laws or their implementation and applicable tax authority practices in any particular jurisdiction could change in the future, possibly on a retroactive basis, and any such change could have an adverse impact on us and our affiliates. Legislative or other governmental action in the U.S. could adversely affect our business. Legislative action may be taken by the U.S.
Additionally, tax laws or their implementation and applicable tax authority practices in any particular jurisdiction could change in the future, possibly on a retroactive basis, and any such change could have an adverse impact on us and our affiliates. 41 Table of Contents Legislative or other governmental action in the U.S. could adversely affect our business.
As a distributor of media content, we may face potential liability for defamation, invasion of privacy, negligence, copyright or trademark infringement, claims related to the adult nature of some of our content, other claims based on the nature and content of the materials distributed, or statements made by personnel or talent regarding or promoting those materials or attributable to our business.
As a distributor of media content, in the ordinary course of business we may face potential claims for defamation, invasion of privacy, negligence, copyright or trademark infringement, claims related to the mature nature of some of our content, and other claims based on the nature and content of the materials distributed or statements made by personnel or talent regarding or 29 Table of Contents promoting those materials or attributable to our business.
If we encounter licensing, technological, regulatory, business or other impediments to delivering our streaming content to our subscribers via these devices, our ability to retain subscribers and grow our business could be adversely impacted. 27 Table of Contents We are subject to payment processing risk.
If we encounter licensing, technological, regulatory, business or other impediments to delivering our streaming content to our subscribers via these devices, our ability to retain subscribers and grow our direct-to-consumer business could be materially adversely impacted. We are subject to payment processing risk.
Our success depends upon the continued efforts, abilities and expertise of our executive teams and other key employees, including production, creative and technical personnel, including, in turn, on our ability to identify, attract, hire, train and retain 29 Table of Contents such personnel.
Our success depends on attracting and retaining key personnel and artistic talent. Our success depends upon the continued efforts, abilities and expertise of our executive teams and other key employees, including production, creative and technical personnel, including, in turn, on our ability to identify, attract, hire, train and retain such personnel.
Further, a partially remote workforce created by the COVID-19 global pandemic poses increased risks to our information technology systems and data, as certain employees work from home on a full or part-time basis, utilizing network connections outside our premises.
Further, a partially remote workforce poses increased risks to our information technology systems and data, as certain employees work from home on a full or part-time basis, utilizing network connections outside our premises.
In the U.S, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws.
In the U.S, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act and the Controlling the Assault of Non-Solicited Pornography and Marketing Act ), and other similar laws (e.g., wiretapping laws ) .
In addition, external events including changing technology, changing consumer patterns, acceptance of our theatrical and television offerings and changes in macroeconomic conditions may impair the value of our assets. When these occur, we may incur costs to change our business strategy and may need to write down the value of assets.
In addition, external events including changing technology, changing consumer patterns, acceptance of our theatrical and television offerings and changes in macroeconomic conditions may impair the value of our assets. When these occur, we may incur costs to adjust our business strategy and may need to write down the value of assets. We may also invest in existing or new businesses.
Given uncertainty around these rules, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business. Risks Related To Our Indebtedness We have incurred significant indebtedness that could adversely affect our operations and financial condition.
Given uncertainty around these rules, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.
In order to contain this problem, we may have to implement elaborate and costly security and anti-piracy measures, which could result in significant expenses and losses of revenue. We cannot assure you that even the highest levels of security and anti-piracy measures will prevent piracy.
In order to contain this problem, we may have to implement elaborate and costly security and anti-piracy measures, which could result in significant expenses and losses of revenue. We cannot assure you that even the highest levels of security and anti-piracy measures will prevent piracy. Failure of, or disruptions to, our technology facilities could adversely affect our business.
If we cannot acquire new product and the rights to popular titles through production, distribution agreements, acquisitions, mergers, joint ventures or other strategic alliances, or renew expiring rights to titles generating a significant portion of our revenue on acceptable terms, any such failure could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. 25 Table of Contents The ongoing impact of the COVID-19 global pandemic could continue to materially and adversely affect our business, financial condition, and results of operations.
If we cannot acquire new product and the rights to popular titles through production, distribution agreements, acquisitions, mergers, joint ventures or other strategic alliances, or renew expiring rights to titles generating a significant portion of our revenue on acceptable terms, any such failure could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although the Senior Credit Facilities and the indenture that governs the Senior Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
Although the Senior Credit Facilities and the indenture that governs the New Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
These types of claims have been brought, sometimes successfully, against producers and distributors of media content. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business and results of operations. Piracy of films and television programs could adversely affect our business over time.
These types of claims have historically been brought, sometimes successfully, against producers and distributors of media content. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business, financial condition and results of operations.
In general, a labor dispute, work stoppage, work slowdown, strike by, or a lockout of, one or more of the unions that provide personnel essential to the production of motion pictures or television content, including the ongoing strike by the Writers’ Guild of America, and/or potential strikes from the Directors Guild or Screen Actors Guild, could delay or halt our ongoing production activities, or could cause a delay or interruption in our release of new motion pictures and television content.
In general, a labor dispute, work stoppage, work slowdown, strike by, or a lockout of, one or more of the unions that provide personnel essential to the production of motion pictures or television content, including a potential strike from The International Alliance of Theatrical Stage Employees, could delay or halt our ongoing production activities, or could cause a delay or interruption in our release of new motion pictures and television content.
Such impairment charges could adversely impact our business, operating results and financial condition. Changes in our business strategy, plans for growth or restructuring may increase our costs or otherwise affect our profitability.
Such impairment charges could adversely impact our business, operating results and financial condition. Changes in our business strategy including consummation of the separation of the Studio Business and the STARZ business of Lionsgate, plans for growth or restructuring may increase our costs or otherwise affect our profitability.
The underperformance at the box office of one or more motion pictures in any period may cause our revenue and earnings results for that period (and potentially, subsequent periods) to be less than anticipated.
In particular, if one or more motion pictures underperform at the box office in any given period, our revenue and earnings results for that period (and potentially, subsequent periods) may be less than anticipated.
In any of these events, our costs may increase, we may have significant charges associated with the write-down of assets, or returns on new investments may be lower than prior to the change in strategy, plans for growth or restructuring.
In any of these events, our costs may increase, we may have significant charges associated with the write-down of assets, or returns on new investments may be lower than prior to the change in strategy, plans for growth or restructuring. In addition, on May 13, 2024, we consummated the business combination which resulted in the launch of Lionsgate Studios.
If we are unable to successfully compete with current and new competitors in both retaining our existing subscriptions and attracting new subscriptions, our results of operations could be materially adversely affected. STARZ relies, in part, on third party sales platforms as well as third-party internet-connected devices for distribution of our direct-to-consumer service.
If we are unable to successfully compete with current and new competitors in both retaining our existing subscriptions and attracting new subscriptions, it could pose a materially adverse effect on our business, financial condition and results of operations. 27 Table of Contents STARZ relies, in part, on third party sales platforms as well as third-party internet-connected devices for distribution of our direct-to-consumer service.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse business consequences. We are subject to risks associated with possible acquisitions, dispositions, business combinations, or joint ventures.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse business consequences.
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness. Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described above.
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness. 38 Table of Contents Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt.
Our success depends, in part, upon popularity, viewer preferences and audience acceptance of our content (including STARZ’s and LIONSGATE+’s programming).
Our success depends, in part, upon popularity, viewer preferences and audience acceptance of our content.
We may at times fail (or be perceived to have failed) in efforts to comply with data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
As a result of the factors above, our results of operations may fluctuate and differ from period to period, and therefore may not be indicative of the results for any future periods or directly comparable to prior reporting periods. We do not have long-term arrangements with many of our production or co-financing partners.
As a result of the factors above, our results of operations may fluctuate and differ from period to period, and therefore, may not be indicative of the results for any future periods or directly comparable to prior reporting periods.
Consumer Protection Laws. The continued growth and development of the market for online commerce may lead to more stringent consumer protection laws both domestically and internationally, which may impose additional burdens on us.
Consumer Protection Laws. The continued growth and development of the market for online commerce may lead to more stringent consumer protection laws both domestically and internationally, which may impose additional burdens on us. In addition, many states have enacted laws regulating automatically renewing online subscription services.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Borrowings under the Senior Credit Facilities and advances under our production and related loans and IP Credit Facility are at variable rates of interest and expose us to interest rate risk, which could increase the cost of capital.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Certain of our borrowings, primarily borrowings under the Senior Credit Facilities, and our film related obligations, are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk.

… 145 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeIn addition, we lease the following properties used by our Motion Picture, Television Production and Media Networks segments: • 280,000 square feet at 8900 Liberty Circle, Englewood, Colorado (per a lease that expires in December 2023); • 100,119 square feet at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado (per a lease that expires in September 2034); • 93,670 square feet at 12020 Chandler Blvd., Valley Village, California (per a lease that expires in December 2027); • 60,116 square feet at 1647 Stewart Street, Santa Monica, California (per a lease that expires in December 2028); • 34,332 square feet at 530 Fifth Avenue, New York, New York (per a lease that expires in August 2028); • 25,346 square feet at 9460 Wilshire Blvd., Beverly Hills, California (per a lease that expires in February 2026); • 11,243 square feet at 45 Mortimer Street, London, United Kingdom (per a lease that expires in July 2029); • An aggregate of 18,220 square feet for properties located in Los Angeles, California (per a lease that expires in April 2026), Mumbai, India (per a lease that expires in August 2024), New York, New York (per a lease that expires in May 2025), Toronto, Canada (per a lease that expires in June 2025), Beijing, China (per a lease that expires in December 2023) and Luxembourg City, Luxembourg (per a lease that expires in May 2024).
Biggest changeIn addition, we lease the following properties used by our Motion Picture, Television Production and Media Networks segments: • 100,119 square feet at 6363 South Fiddler’s Green Circle, Greenwood Village, Colorado (per a lease that expires in September 2034); • 94,449 square feet at 134 Peter Street, Toronto, Canada (per a lease that expires June 2025); • 93,670 square feet at 12020 Chandler Blvd., Valley Village, California (per a lease that expires in December 2027); • 60,116 square feet at 1647 Stewart Street, Santa Monica, California (per a lease that expires in December 2028); • 48,133 square feet at 4201 Wilshire Blvd., Los Angeles, California (per a lease that expires in July 2024); • 39,000 square feet at 2700 Pennsylvania Avenue, Santa Monica, California (per a lease that expires in August 2029); • 34,332 square feet at 530 Fifth Avenue, New York, New York (per a lease that expires in August 2028); • 28,192 square feet at 15301 Ventura Blvd., Sherman Oaks, California (per a lease that expires in December 2025); • 25,346 square feet at 9460 Wilshire Blvd., Beverly Hills, California (per a lease that expires in February 2026); • 15,673 square feet at 45 Mortimer Street, London, United Kingdom (per a lease that expires in July 2029); • An aggregate of 20,610 square feet for properties located in Beijing, China (per a lease that expires in December 2024), Brentwood, California (per a lease that expires in April 2026), Leeds, United Kingdom (per leases that expire in April 2025, September 2025 and October 2027), Luxembourg City, Luxembourg (per a lease that expires in April 2027), Mumbai, India (per a lease that expires in August 2026), New York, New York (per a lease that expires in May 2025), and Toronto, Canada (per a lease that expires in June 2025).
ITEM 2. PROPERTIES. Our corporate office is located at 250 Howe Street, 20th Floor, Vancouver, BC V6C 3R8. Our principal executive offices are located at 2700 Colorado Avenue, Santa Monica, California, 90404, where we occupy 192,584 square feet (per a lease that expires in August 2025).
ITEM 2. PROPERTIES. 43 Table of Contents Our corporate office is located at 250 Howe Street, 20th Floor, Vancouver, BC V6C 3R8. Our principal executive offices are located at 2700 Colorado Avenue, Santa Monica, California, 90404, where we occupy 192,584 square feet (per a lease that expires in August 2025).

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeFor a discussion of certain claims and legal proceedings, see Note 17 - Commitments and Contingencies to our consolidated financial statements, which discussion is incorporated by reference into this Part I, Item 3, Legal Proceedings. ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable. 40 Table of Contents PART II
Biggest changeFor a discussion of certain claims and legal proceedings, see Note 17 - Commitments and Contingencies to our consolidated financial statements, which discussion is incorporated by reference into this Part I, Item 3, Legal Proceedings. ITEM 4. MINE SAFETY DISCLOSURES. Not Applicable. 44 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 40 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. [Reserved] 44 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 44 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 77 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 44 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 45 Item 6. [Reserved] 48 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 48 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 80 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

22 edited+2 added−5 removed11 unchanged
Biggest changeHolder” means a holder of common shares who (1) for the purposes of the Income Tax Act (Canada) (the "ITA") is not, has not, and will not be, or deemed to be, resident in Canada at any time while such holder holds common shares, (2) at all relevant times is a resident of the United States under the Canada-United States Tax Convention (1980) (the “Convention”) and is eligible for benefits under the Convention, (3) is not a “foreign affiliate” as defined in the ITA of a person resident in Canada, and (4) does not and will not use or be deemed to use the common shares in carrying on a business in Canada.
Biggest changeTaxation The following is a general summary of certain Canadian federal income tax consequences to a person (a “Non-Canadian Holder”) who is the beneficial owner of Class A voting common shares or Class B non-voting common shares (collectively, “common shares”) and who, at all relevant times, for the purposes of the Income Tax Act (Canada) (the “ITA”) (i) is not, and is not deemed to be resident in Canada, (ii) does not, and is not deemed to, use or hold any common shares in, or in the course of, carrying on a business in Canada, (iii) deals at arm’s length, and is not affiliated, with the Company, (iv) is not a “foreign affiliate” (as defined in the ITA) of a person resident in Canada, and (v) has not received or acquired any common shares in connection with any employee stock option or executive compensation plan or otherwise in connection with employment.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item is incorporated by reference to our Proxy Statement for our 2023 Annual General Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended March 31, 2023.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item is incorporated by reference to our Proxy Statement for our 2024 Annual General Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended March 31, 2024.
Such purchases will be structured as permitted by securities laws and other legal requirements. The share repurchase program has no expiration date. No common shares were purchased by us during the three months ended March 31, 2023.
Such purchases will be structured as permitted by securities laws and other legal requirements. The share repurchase program has no expiration date. No common shares were purchased by us during the three months ended March 31, 2024.
Accordingly, prospective investors should consult with their own tax advisors for advice with respect to the income tax consequences to them having regard to their own particular circumstances, including any consequences of an investment in common shares arising under any provincial, state or local tax laws or the tax laws of any jurisdiction other than Canada.
Accordingly, holders and prospective holders of common shares should consult with their own tax advisors for advice with respect to the income tax consequences to them, having regard to their own particular circumstances, including any consequences of an investment in common shares arising under any provincial, state or local tax laws or the tax laws of any jurisdiction other than Canada.
All values assume that $100 was invested on March 31, 2018 in our common shares and each applicable index and all dividends were reinvested.
All values assume that $100 was invested on March 31, 2019 in our common shares and each applicable index and all dividends were reinvested.
Assuming that the common shares have never derived their value principally from any of the items listed in (i)-(iv) above, capital gains derived by a U.S. Holder from the disposition of common shares will generally not be subject to tax in Canada.
Assuming that the common shares have never derived their value principally from any of the items listed in (i)-(iv) above, capital gains derived by a Non-Canadian Holder from the disposition of common shares will generally not be subject to tax in Canada.
In addition to the Canadian withholding tax on actual or deemed dividends, a U.S. Holder also needs to consider the potential application of Canadian income tax on capital gains. A U.S.
In addition to the Canadian withholding tax on actual or deemed dividends, a Non-Canadian Holder also needs to consider the potential application of Canadian income tax on capital gains.
This summary does not apply to a U.S. Holder that is an insurer or an “authorized foreign bank” within the meaning of the ITA. Such U.S. Holders should seek tax advice from their advisors.
This summary does not apply to a Non-Canadian Holder that is an insurer or an “authorized foreign bank” within the meaning of the ITA. Such Non-Canadian Holders should seek tax advice from their advisors.
Stock Performance Graph The following graph compares our cumulative total shareholder return with those of the NYSE Composite Index and the S&P Movies & Entertainment Index for the period commencing March 31, 2018 and ending March 31, 2023.
Stock Performance Graph The following graph compares our cumulative total shareholder return with those of the NYSE Composite Index and the S&P Movies & Entertainment Index for the period commencing March 31, 2019 and ending March 31, 2024.
In general, common shares will be considered capital property of a holder where the holder is neither a trader nor dealer in securities, does not hold the common shares in the course of carrying on a business and is not engaged in an adventure in the nature of trade in respect thereof. This summary does not apply to a U.S.
In general, common shares will be considered capital property of a holder where the holder is neither a trader nor dealer in securities, does not hold the common shares in the course of carrying on a business, and is not engaged in an adventure in the nature of trade in respect thereof.
Holder will generally not be subject to tax under the ITA in respect of any capital gain arising on an actual or deemed disposition of common shares (including, generally, on a purchase by the Company on the open market) unless at the time of disposition such shares constitute “taxable Canadian property” of the holder for purposes of the ITA and such U.S.
A Non-Canadian Holder will generally not be subject to tax under the ITA in respect of any capital gain arising on an actual or deemed disposition of common shares (including, generally, on a purchase by the Company on the open market) unless at the time of disposition such shares constitute “taxable Canadian property” of the holder for purposes of the ITA and such Non-Canadian Holder is not entitled to relief under an applicable tax treaty.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI”), of which Canada is a signatory, affects many of Canada’s bilateral tax treaties (excluding the Convention), including the ability to claim benefits thereunder. Affected Non-Resident Holders should consult their own tax advisors in this regard.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI”), of which Canada is a signatory, affects many of Canada’s bilateral tax treaties (but not the Canada-U.S. Tax Treaty), including the ability to claim benefits thereunder. Affected Non-Canadian Holders should consult their own tax advisors in this regard. Under the Canada-U.S.
However, where such beneficial owner of the dividends is a company that owns at least 10% of the voting shares of the company paying the dividends, the rate of such withholding is 5%.
Furthermore, where such beneficial owner of the dividends is a company that owns at least 10% of the voting shares of the company paying the dividends, the rate of such withholding is reduced to 5%.
Additionally, during the three months ended March 31, 2023, no Class A voting shares and 217,666 Class B non-voting shares were withheld upon the vesting of restricted share units and share issuances to satisfy minimum statutory federal, state and local tax withholding obligations. 42 Table of Contents Unregistered Sales of Equity Securities None.
Additionally, during the three months ended March 31, 2024, no Class A voting shares and 98,962 Class B non-voting shares were withheld upon the vesting of restricted share units and share issuances to satisfy minimum statutory federal, state and local tax withholding obligations. 46 Table of Contents Unregistered Sales of Equity Securities None.
Holders As of May 23, 2023, there were approximately 576 and 1,469 shareholders of record of our Class A voting shares and Class B non-voting shares, respectively.
Holders As of May 24, 2024, there were approximately 618 and 1,658 shareholders of record of our Class A voting shares and Class B non-voting shares, respectively.
This summary is not intended to be, and should not be construed to be, legal or tax advice and no representation with respect to the tax consequences to any particular investor is made.
This summary is not intended to be, and should not be construed to be, legal or tax advice and no representation with respect to the tax consequences to any particular investor is made. The summary does not address any aspect of any provincial, state or local tax laws or the tax laws of any jurisdiction other than Canada.
Holder together with such non-arm's length persons, owned 25% or more of the issued shares of any class or series of the capital stock of the Company and at such time, more than 50% of the fair market value of the shares was derived from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, interests in, or civil law rights in, such properties.
If the common shares are listed on a designated stock exchange (which includes the NYSE) at the time they are disposed of, they will generally not constitute taxable Canadian property of a non-Canadian Holder unless, at any time during the 60-month period immediately preceding the disposition of the common shares, the Non-Canadian Holder, persons with whom such Non-Canadian Holder does not deal at arm's length, or the Non-Canadian Holder together with such non-arm's length persons, owned 25% or more of the issued shares of any class or series of the capital stock of the Company and at such time, more than 50% of the fair market value of the shares was derived from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, interests in, or civil law rights in, such properties.
No assurance may be given that any proposed amendment will be enacted in the form proposed, if at all. This summary does not otherwise take into account or anticipate any changes in law, whether by legislative, governmental or judicial action. The following summary applies only to U.S. Holders who hold their common shares as capital property.
This summary does not otherwise take into account or anticipate any changes in law, whether by legislative, governmental or judicial action. The following summary applies only to Non-Canadian Holders who hold their common shares as capital property.
The comparisons shown in the graph below are based on historical data and we caution that the stock price performance shown in the graph below is not indicative of, and is not intended to forecast, the potential future performance of our common shares. 3/18 3/19 3/20 3/21 3/22 3/23 Lions Gate Entertainment Corporation-Class A $100.00 $61.01 $23.72 $58.32 $63.39 $43.18 Lions Gate Entertainment Corporation-Class B $100.00 $63.21 $23.36 $54.00 $62.92 $43.45 NYSE Composite $100.00 $104.63 $87.13 $135.10 $147.41 $139.37 Dow Jones US Media Sector $100.00 $111.90 $96.31 $169.44 $138.88 $103.91 43 Table of Contents The graph and related information are being furnished solely to accompany this Form 10-K pursuant to Item 201(e) of Regulation S-K.
The comparisons shown in the graph below are based on historical data and we caution that the stock price performance shown in the graph below is not indicative of, and is not intended to forecast, the potential future performance of our common shares. 3/19 3/20 3/21 3/22 3/23 3/24 Lions Gate Entertainment Corporation-Class A $100.00 $38.87 $95.59 $103.90 $70.78 $63.62 Lions Gate Entertainment Corporation-Class B $100.00 $36.95 $85.43 $99.54 $68.74 $61.66 NYSE Composite $100.00 $83.27 $129.13 $140.89 $133.21 $162.54 Dow Jones US Media Sector $100.00 $86.07 $151.43 $124.12 $92.86 $101.66 47 Table of Contents The graph and related information are being furnished solely to accompany this Form 10-K pursuant to Item 201(e) of Regulation S-K.
Holder that is a “financial institution” within the meaning of the mark-to-market rules contained in the ITA or to holders who have entered into a “dividend rental arrangement”, a “derivative forward agreement” or a “synthetic disposition arrangement” as these terms are defined in the ITA. 41 Table of Contents For purposes of the ITA, any amount relating to the acquisition, holding or disposition of common shares, including dividends, adjusted cost base and proceeds of disposition, must be expressed in Canadian dollars using the applicable rate of exchange (for purposes of the ITA) quoted by the Bank of Canada on the date such amounts arose, or such other rate of exchange as is acceptable to the Minister of Finance (Canada).
For purposes of the ITA, any amount relating to the acquisition, holding, or disposition of common shares, including dividends, adjusted cost base and proceeds of disposition, must be expressed in Canadian dollars using the applicable rate of exchange (for purposes of the ITA) quoted by the Bank of Canada on the date such amounts arose, or such other rate of exchange as is acceptable to the Canada Revenue Agency.
Under the Convention, the rate of Canadian non-resident withholding tax on the gross amount of dividends received by a U.S. Holder, which is the beneficial owner of such dividends, is generally 15%.
Tax Treaty, for a Non-Canadian Holder who is the beneficial owner and who is a resident of the United States and entitled full benefits under the Canada-U.S. Tax Treaty, the rate of Canadian withholding tax applicable to dividends is generally reduced to 15%.
This summary is based upon the current provisions of the ITA, the regulations thereunder and the proposed amendments thereto publicly announced by the Department of Finance, Canada before the date hereof and our understanding of the current administrative policies and assessing practices of the Canada Revenue Agency published in writing prior to the date hereof.
This summary is based upon the current provisions of the ITA, the regulations thereunder and the proposed amendments thereto publicly announced by, or on behalf of, the Minister of Finance (Canada) before the date hereof, the Canada-United States Tax Convention (1980) , as amended (the “Canada-U.S.
Removed
Taxation The following is a general summary of certain Canadian federal income tax consequences to U.S. Holders (who, at all relevant times, deal at arm's length with the Company) with respect to the purchase, ownership and disposition of common shares. For the purposes of this Canadian income tax discussion, a “U.S.
Added
Tax Treaty”) and our understanding of the current administrative policies and assessing practices of the Canada Revenue Agency published in writing prior to the date hereof. No assurance may be given that any proposed amendment will be enacted in the form proposed, if at all.
Removed
The summary does not address any aspect of any provincial, state or local tax laws or the tax laws of any jurisdiction other than Canada or the tax considerations applicable to non-U.S. Holders.
Added
This summary does not apply to a Non-Canadian Holder that is a “financial institution” within 45 Table of Contents the meaning of the mark-to-market rules contained in the ITA or to holders who have entered into a “dividend rental arrangement”, a “derivative forward agreement”, or a “synthetic disposition arrangement” as these terms are defined in the ITA.
Removed
For these purposes, a company that is a resident of the United States for the purposes of the Convention and which holds an interest in an entity (other than an entity that is resident in Canada) that is fiscally transparent under the laws of the United States will be considered to own the voting shares of the Company owned by that fiscally transparent entity in proportion to the company’s ownership interest in the fiscally transparent entity.
Removed
Holder is not entitled to relief under the Convention. If the common shares are listed on a designated stock exchange (which includes the NYSE) at the time they are disposed of, they will generally not constitute taxable Canadian property of a U.S.
Removed
Holder unless, at any time during the 60-month period immediately preceding the disposition of the common shares, the U.S. Holder, persons with whom such U.S. Holder does not deal at arm's length, or the U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

176 edited+91 added−89 removed119 unchanged
Biggest changeRESULTS OF OPERATIONS Fiscal 2023 Compared to Fiscal 2022 Consolidated Results of Operations The following table sets forth our consolidated results of operations for the fiscal years ended March 31, 2023 and 2022. 54 Table of Contents Year Ended March 31, Increase (Decrease) 2023 2022 Amount Percent (Amounts in millions) Revenues Studio Business Motion Picture $ 1,323.7 $ 1,185.3 $ 138.4 11.7 % Television Production 1,760.1 1,531.0 229.1 15.0 % Total Studio Business 3,083.8 2,716.3 367.5 13.5 % Media Networks 1,546.5 1,536.2 10.3 0.7 % Intersegment eliminations (775.5) (648.2) (127.3) 19.6 % Total revenues 3,854.8 3,604.3 250.5 7.0 % Expenses: Direct operating 2,312.5 2,064.2 248.3 12.0 % Distribution and marketing 801.7 861.0 (59.3) (6.9) % General and administration 531.1 475.4 55.7 11.7 % Depreciation and amortization 180.3 177.9 2.4 1.3 % Restructuring and other 411.9 16.8 395.1 nm Goodwill impairment 1,475.0 — 1,475.0 n/a Total expenses 5,712.5 3,595.3 2,117.2 58.9 % Operating income (loss) (1,857.7) 9.0 (1,866.7) nm Interest expense (221.2) (176.0) (45.2) 25.7 % Interest and other income 6.4 30.8 (24.4) nm Other expense (26.9) (10.9) (16.0) 146.8 % Gain (loss) on extinguishment of debt 57.4 (28.2) 85.6 n/a Gain on investments 44.0 1.3 42.7 nm Equity interests income (loss) 0.5 (3.0) 3.5 (116.7) % Loss before income taxes (1,997.5) (177.0) (1,820.5) nm Income tax provision (21.3) (28.4) 7.1 (25.0) % Net loss (2,018.8) (205.4) (1,813.4) nm Less: Net loss attributable to noncontrolling interest 8.6 17.2 (8.6) (50.0) % Net loss attributable to Lions Gate Entertainment Corp. shareholders $ (2,010.2) $ (188.2) $ (1,822.0) nm _______________________ nm - Percentage not meaningful.
Biggest changeYear Ended March 31, Change 2024 2023 Amount Percent (Amounts in millions) Revenues Studio Business Motion Picture $ 1,656.3 $ 1,323.7 $ 332.6 25.1 % Television Production 1,330.1 1,760.1 (430.0) (24.4) % Total Studio Business 2,986.4 3,083.8 (97.4) (3.2) % Media Networks 1,576.4 1,546.5 29.9 1.9 % Intersegment eliminations (545.9) (775.5) 229.6 (29.6) % Total revenues 4,016.9 3,854.8 162.1 4.2 % Expenses: Direct operating 2,189.2 2,312.5 (123.3) (5.3) % Distribution and marketing 911.4 801.7 109.7 13.7 % General and administration 490.5 531.1 (40.6) (7.6) % Depreciation and amortization 192.2 180.3 11.9 6.6 % Restructuring and other 508.5 411.9 96.6 23.5 % Goodwill and intangible asset impairment 663.9 1,475.0 (811.1) (55.0) % Total expenses 4,955.7 5,712.5 (756.8) (13.2) % Operating loss (938.8) (1,857.7) 918.9 (49.5) % Interest expense (269.8) (221.2) (48.6) 22.0 % Interest and other income 22.1 6.4 15.7 245.3 % Other expense (26.9) (26.9) — — % Gain on extinguishment of debt 19.9 57.4 (37.5) (65.3) % Gain on investments, net 3.5 44.0 (40.5) (92.0) % Equity interests income 8.7 0.5 8.2 1,640.0 % Loss before income taxes (1,181.3) (1,997.5) 816.2 (40.9) % Income tax benefit (provision) 65.0 (21.3) 86.3 (405.2) % Net loss (1,116.3) (2,018.8) 902.5 (44.7) % Less: Net loss attributable to noncontrolling interest 13.4 8.6 4.8 55.8 % Net loss attributable to Lions Gate Entertainment Corp. shareholders $ (1,102.9) $ (2,010.2) $ 907.3 (45.1) % _______________________ nm - Percentage not meaningful.
Film and Television Programs Monetized Individually. For films and television programs monetized individually, film cost amortization, participations and residuals expense are based on management's estimates.
For films and television programs monetized individually, film cost amortization, participations and residuals expense are based on management's estimates.
The cost of licensed program rights for films and television programs (including original series) exhibited by the Media Networks segment are generally amortized on a title-by-title or episode-by-episode basis using on an accelerated or straight-line method based on the expected and historical viewership patterns or the current and anticipated number of exhibitions over the license period or estimated life for owned or produced programs.
The cost of licensed program rights for films and television programs (including original series) exhibited by the Media Networks segment are generally amortized on a title-by-title or episode-by-episode basis using an accelerated or straight-line method based on the expected and historical viewership patterns or the current and anticipated number of exhibitions over the license period or estimated life for owned or produced programs.
Direct Operating and Distribution and Marketing Expenses . Direct operating and distribution and marketing expenses primarily represent programming cost amortization and advertising and marketing costs, respectively.
Direct operating and distribution and marketing expenses primarily represent programming cost amortization and advertising and marketing costs, respectively.
The noncontrolling equity interest in the distributable earnings of 3 Arts Entertainment are reflected as an expense rather than noncontrolling interest in the consolidated statement of operations due to the relationship to continued employment.
The noncontrolling equity interests in the distributable earnings of 3 Arts Entertainment are reflected as an expense rather than noncontrolling interest in the consolidated statement of operations due to the relationship to continued employment.
A discussion and analysis of our financial condition and results of operation for the fiscal year ended March 31, 2021 and year-to-year comparisons between fiscal 2022 and fiscal 2021 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022 , and is herein incorporated by reference.
A discussion and analysis of our financial condition and results of operation for the fiscal year ended March 31, 2022 and year-to-year comparisons between fiscal 2023 and fiscal 2022 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023 , and is herein incorporated by reference.
The $56.4 million received was classified in the consolidated statement of cash flows as cash provided by operating activities of $188.7 million reflecting the amount received for the derivative portion of the termination of swaps (and presented in the "proceeds from the termination of interest rate swaps" line item on the consolidated statement of cash flows), and a use of cash in financing activities of $134.5 million reflecting the pay down of the financing component of the Terminated Swaps (inclusive of payments made between April 1, 2022 and the termination date amounting to $3.2 million) (see Financing Activities below).
The $56.4 million received was classified in the consolidated statement of cash flows as cash provided by operating activities of $188.7 million reflecting the amount received for the derivative portion of the termination of swaps (and presented in the "proceeds from the termination of interest rate swaps" line item on the consolidated 78 Table of Contents statement of cash flows), and a use of cash in financing activities of $134.5 million reflecting the pay down of the financing component of the Terminated Swaps (inclusive of payments made between April 1, 2022 and the termination date amounting to $3.2 million) (see Financing Activities below).
A portion of the cost of these licenses and in some cases the cost of produced content, is allocated between the programming rights for exploitation on the Starz Platforms and investment in film and television programs for exploitation outside of the Starz Platforms in ancillary markets (e.g., home video, digital platforms, television, etc.) based on the relative fair value of those markets.
A portion of the cost of these licenses and the cost of produced content, is allocated between the programming rights for exploitation on the Starz Platforms and investment in film and television programs for exploitation outside of the Starz Platforms in ancillary markets (e.g., home video, digital platforms, television, etc.) based on the relative fair value of those markets.
We may also dispose of businesses or assets, including individual films or libraries, and use the net proceeds from such dispositions to fund operations or such acquisitions, or to repay debt. 73 Table of Contents Material Cash Requirements from Known Contractual and Other Obligations.
We may also dispose of businesses or assets, including individual films or libraries, and use the net proceeds from such dispositions to fund operations or such acquisitions, or to repay debt. 76 Table of Contents Material Cash Requirements from Known Contractual and Other Obligations.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This section of our Annual Report Form 10-K includes a discussion and analysis of our financial condition and results of operation for the fiscal years ended March 31, 2023 and 2022, and year-to-year comparisons between fiscal 2023 and fiscal 2022.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This section of our Annual Report Form 10-K includes a discussion and analysis of our financial condition and results of operation for the fiscal years ended March 31, 2024 and 2023, and year-to-year comparisons between fiscal 2024 and fiscal 2023.
The facility maturity date is up to two years and 90 days after the revolving period ends, currently August 14, 2027. As of March 31, 2023, there was $175.0 million outstanding under the Backlog Facility. ◦ Other.
The facility maturity date is up to two years and 90 days after the revolving period ends, currently August 14, 2027. As of March 31, 2024, there was $175.0 million outstanding under the Backlog Facility. ◦ Other.
Starz Networks’ revenues are derived from the domestic distribution of our STARZ branded premium subscription video services through over-the-top ("OTT") streaming platforms and distributors, on a direct-to-consumer basis through the Starz App, and through U.S. multichannel video programming distributors (“MVPDs”) 47 Table of Contents including cable operators, satellite television providers and telecommunications companies (collectively "Distributors") (in the aggregate, the "Starz Domestic Platform"). • LIONSGATE+.
Starz Networks’ revenues are derived from the domestic distribution of our STARZ branded premium subscription video services through over-the-top ("OTT") streaming platforms and distributors, on a direct-to-consumer basis through the Starz App, and through U.S. multichannel video programming distributors (“MVPDs”) including cable operators, satellite television providers and telecommunications companies (collectively "Distributors") (in the aggregate, the "Starz Domestic Platform"). • LIONSGATE+.
These write-downs are included in amortization expense within direct operating expenses in our consolidated statements of operations. See further discussion below under Impairment Assessment . Film and Television Programs Monetized as a Group. Licensed programming rights may include rights to more than one exploitation window under the Company's output and library agreements.
These write-downs are included in amortization expense within direct operating expenses in our consolidated statements of operations. See further discussion below under Impairment Assessment . 53 Table of Contents Film and Television Programs Monetized as a Group. Licensed programming rights may include rights to more than one exploitation window under the Company's output and library agreements.
As of March 31, 2023, the Company was in compliance with all applicable covenants. Share Repurchase Plan. On February 2, 2016, our Board of Directors authorized to increase our previously announced share repurchase plan from $300 million to $468 million.
As of March 31, 2024, the Company was in compliance with all applicable covenants. Share Repurchase Plan. On February 2, 2016, our Board of Directors authorized to increase our previously announced share repurchase plan from $300 million to $468 million.
Total segment profit and Studio Business segment profit, 61 Table of Contents when presented outside of the segment information and reconciliations included in Note 16 to our consolidated financial statements, is considered a non-GAAP financial measure, and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP.
Total segment profit and Studio Business segment profit, when presented outside of the segment information and reconciliations included in Note 16 to our consolidated financial statements, is considered a non-GAAP financial measure, and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP.
Such purchases will be structured as permitted by securities laws and other legal requirements. During the fiscal year ended March 31, 2023, the Company did not repurchase any common shares. Dividends.
Such purchases will be structured as permitted by securities laws and other legal requirements. During the fiscal year ended March 31, 2024, the Company did not repurchase any common shares. Dividends.
Since the impairment charge reduced the carrying value of the Media Networks reporting unit to its fair value, at September 30, 2022 the fair value and carrying value of the Media Networks reporting unit were equal and thus it continues to be considered "at risk" of impairment.
Since the impairment charge reduced the carrying value of the Media Networks reporting unit to its fair value, at September 30, 2022 the fair value and carrying value of the Media Networks reporting unit were equal and thus it continued to be considered "at risk" of impairment.
We are unable to estimate the amounts to be paid under the Universal agreement for films that have not yet been released in theaters, however, such amounts are expected to be significant. For additional details of commitments and contingencies, see Note 17 to our consolidated financial statements. Covenants.
We are unable to estimate the amounts to be paid under the Universal agreement for films that have not yet been released in theaters, however, such amounts are expected to be significant. 77 Table of Contents For additional details of commitments and contingencies, see Note 17 to our consolidated financial statements. Covenants.
Our film related obligations at March 31, 2023 include the following: • Production Loans: Production loans represent individual and multi-title loans for the production of film and television programs that we produce or license.
Our film related obligations at March 31, 2024 include the following: • Production Loans: Production loans represent individual and multi-title loans for the production of film and television programs that we produce or license.
As disclosed in Note 12 to our consolidated financial statements, remaining performance obligations were $1.9 billion at March 31, 2023 (March 31, 2022 - $1.8 billion). The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.5 billion at March 31, 2023 (March 31, 2022 - $1.3 billion).
As disclosed in Note 12 to our consolidated financial statements, remaining performance obligations were $1.8 billion at March 31, 2024 (March 31, 2023 - $1.9 billion). The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.5 billion at March 31, 2024 (March 31, 2023 - $1.5 billion).
The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. As described more fully below, these estimates bear the risk of change due to the inherent uncertainty of the estimate.
The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. As described more fully below, these estimates bear the risk of change due to the inherent uncertainty 52 Table of Contents of the estimate.
These estimates are based in part on the historical performance of similar films, test audience results when available, information regarding competing film releases, and critic reviews. As disclosed in Note 3 to the consolidated financial statements, the unamortized balance related to completed and not released and in progress theatrical films was $561.5 million at March 31, 2023.
These estimates are based in part on the historical performance of similar films, test audience results when available, information regarding competing film releases, and critic reviews. As disclosed in Note 3 to the consolidated financial statements, the unamortized balance related to completed and not released and in progress theatrical films was $532.5 million at March 31, 2024.
The level of programming cost amortization and advertising and marketing costs and thus the segment profit margin for the Media Networks' segment can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the network during the period.
The level of programming cost amortization and advertising and marketing costs and thus the gross contribution margin for the Media Networks' segment can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the network during the period.
(2) Amounts include the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense (see Note 18 to our consolidated financial statements). 60 Table of Contents Interest and Other Income.
(2) Amounts include the amortization of unrealized losses in accumulated other comprehensive income (loss) related to de-designated interest rate swaps which are being amortized to interest expense (see Note 18 to our consolidated financial statements). Interest and Other Income.
The discount rate utilized in the discounted cash flow analysis is based on the weighted average cost of capital of the Company plus a risk 50 Table of Contents premium representing the risk associated with producing a particular film or television program or film group.
The discount rate utilized in the discounted cash flow analysis is based on the weighted average cost of capital of the Company plus a risk premium representing the risk associated with producing a particular film or television program or film group.
Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates. Revenue Recognition.
Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates. 54 Table of Contents Revenue Recognition.
As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual or interim goodwill impairment tests will prove to be an accurate prediction of the future.
As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual or interim goodwill impairment tests will prove to be an accurate prediction of the future. Goodwill Impairment Assessments: Fiscal 2024.
Other financing activities also 76 Table of Contents includes tax withholding required on equity awards of $19.2 million and the purchase of noncontrolling interest of $36.5 million representing the settlement of the exercised Pilgrim Media Group put option.
Other financing activities also includes tax withholding required on equity awards of $19.2 million and the purchase of noncontrolling interest of $36.5 million representing the settlement of the exercised Pilgrim Media Group put option.
(4) See Note 9 to our consolidated financial statements for further information on leases. (5) Film related obligations commitments include distribution and marketing commitments, minimum guarantee commitments, program rights commitments, and production loan commitments not reflected on the consolidated balance sheets as they did not then meet the criteria for recognition.
(6) See Note 9 to our consolidated financial statements for further information on leases. (7) Film related obligations commitments include distribution and marketing commitments, minimum guarantee commitments, program rights commitments, and production loan commitments not reflected on the consolidated balance sheets as they did not then meet the criteria for recognition.
In addition, the Company has a redeemable noncontrolling interest balance of $343.6 million as of March 31, 2023 related to its acquisition of a controlling interest, consisting of a limited liability company interest, in each of Pilgrim Media Group and 3 Arts Entertainment, which may require the use of cash in the event the holders of the noncontrolling interests require the Company to repurchase their interests (see Note 11 to our consolidated financial statements). • 3 Arts Entertainment.
In addition, the Company has a redeemable noncontrolling interest balance of $123.3 million as of March 31, 2024 related to its acquisition of a controlling interest, consisting of a limited liability company interest, in each of Pilgrim Media Group and 3 Arts Entertainment, which may require the use of cash in the event the holders of the noncontrolling interests require the Company to repurchase their interests (see Note 11 to our consolidated financial statements). • 3 Arts Entertainment.
(2) See Note 8 to our consolidated financial statements for further information on our film related obligations. (3) Content related payables include minimum guarantees and accrued licensed program rights obligations included on our consolidated balance sheet, which represent amounts payable for film or television rights that we have acquired or licensed.
(4) See Note 8 to our consolidated financial statements for further information on our film related obligations. (5) Content related payables include minimum guarantees and accrued licensed program rights obligations included on our consolidated balance sheet, which represent amounts payable for film or television rights that we have acquired or licensed.
Gain on extinguishment of debt of $57.4 million for fiscal 2023 represented a gain associated with the repurchase of $200.0 million principal amount of 5.500% Senior Notes at a discount, partially offset by the write-off of debt issuance costs associated with the voluntary prepayment of the entire outstanding amount of Term Loan A due March 22, 2023 and the repurchases of the 5.500% Senior Notes.
In fiscal 2023, the gain on extinguishment of debt of $57.4 million represented a gain associated with the repurchase of $200.0 million principal amount of 5.500% Senior Notes at a discount, partially offset by the write-off of debt issuance costs 64 Table of Contents associated with the voluntary prepayment of the entire outstanding amount of Term Loan A due March 22, 2023 and the repurchases of the 5.500% Senior Notes.
Additionally, circumstances related to the COVID-19 global pandemic, inflation and rising interest rates and bank failures has caused disruption in the capital markets, which could make financing more difficult and/or expensive, and we may not be able to obtain such financing.
Additionally, circumstances related to inflation and rising interest rates and bank failures has caused disruption in the capital markets, which could make financing more difficult and/or expensive, and we may not be able to obtain such financing.
At March 31, 2023, there was $231.8 million outstanding under the Production Tax Credit Facility. • IP Credit Facility: In July 2021, as amended in September 2022, certain of our subsidiaries entered into a senior secured amortizing term credit facility due July 2027 (the "IP Credit Facility") based on the collateral consisting solely of certain of our rights in certain library titles, including the Spyglass and other recently acquired libraries.
At March 31, 2024, there was $260.0 million outstanding under the Production Tax Credit Facility. • IP Credit Facility: In July 2021, as amended in September 2022, certain of our subsidiaries entered into a senior secured amortizing term credit facility due July 2027 (the "IP Credit Facility") based on the collateral consisting solely of certain of our rights in certain acquired library titles, including the Spyglass and other recently acquired libraries.
In addition, other financing activities in the fiscal year ended March 31, 2023 includes $134.5 million for interest rate swap settlement payments due to $134.5 million for the pay down of the financing component of our terminated interest rate swaps in fiscal 2023 (inclusive of payments made between April 1, 2022 and the termination date amounting to $3.2 million) (see discussion above in Operating Activities , and Note 18 to our consolidated financial statements).
In addition, other financing activities in the fiscal year ended March 31, 2023 includes $134.5 million for interest rate swap settlement payments due to a financing component on a portion of our interest rate swaps (inclusive of payments made between April 1, 2022 and the termination date amounting to $3.2 million) (see discussion above in Operating Activities , and Note 18 to our consolidated financial statements).
Purchase accounting and related adjustments include the non-cash charge for the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the non-cash charge for the amortization of the recoupable portion of the purchase price and the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense.
Purchase accounting and related adjustments include the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, and the non-cash charges for the accretion of the noncontrolling interest discount and the amortization of the recoupable portion of the purchase price related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense.
Home entertainment revenues are derived from the sale or rental of television production movies or series on packaged media and through digital media platforms. • Other.
Home entertainment revenues are derived from the sale or rental of television production movies or series on packaged media and through digital media platforms. 51 Table of Contents • Other.
Overview Lionsgate Entertainment Corp. (the “Company,” “Lionsgate,” "Lions Gate," “we,” “us” or “our”) encompasses world-class motion picture and television studio operations aligned with the STARZ premium global subscription platform to bring a unique and varied portfolio of entertainment to consumers around the world.
Overview Lions Gate Entertainment Corp. (the “Company,” “Lionsgate,” "Lions Gate," “we,” “us” or “our”) encompasses world-class motion picture and television studio operations (collectively referred to as the "Studio Business") aligned with the STARZ premium global subscription platform to bring a unique and varied portfolio of entertainment to consumers around the world.
(7) Not included in the amounts above are $343.6 million of redeemable noncontrolling interest, as future amounts and timing are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimations of future payments (see Note 11 to our consolidated financial statements).
(9) Not included in the amounts above are $123.3 million of redeemable noncontrolling interest, as future amounts and timing are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimations of future payments (see Note 11 to our consolidated financial statements).
In addition, at March 31, 2023, we had U.S. credit carryforwards related to foreign taxes paid of approximately $73.0 million to offset future federal income taxes that will expire beginning in 2024. Net Loss Attributable to Lions Gate Entertainment Corp. Shareholders.
In addition, at March 31, 2024, we had U.S. credit carryforwards related to foreign taxes paid of approximately $64.9 million to offset future federal income taxes that will expire beginning in 2025. Net Loss Attributable to Lions Gate Entertainment Corp. Shareholders.
We have a $1.25 billion revolving credit facility (with no amounts outstanding at March 31, 2023) due April 2026 (the "Revolving Credit Facility"). We maintain significant availability under our Revolving Credit Facility, which is currently used to meet our short-term liquidity requirements, and could also be used for longer term liquidity requirements. ◦ Term Loan A.
We have a $1.25 billion revolving credit facility (with $575.0 million outstanding at March 31, 2024) due April 2026 (the "Revolving Credit Facility"). We maintain significant availability under our Revolving Credit Facility, which is currently used to meet our short-term liquidity requirements, and could also be used for longer term liquidity requirements. ◦ Term Loan A.
Discussion of Operating, Investing, Financing Cash Flows Cash, cash equivalents and restricted cash decreased by $68.8 million for the fiscal year ended March 31, 2023 and decreased by $142.0 million for the fiscal year ended March 31, 2022, before foreign exchange effects on cash. Components of these changes are discussed below in more detail. Operating Activities.
Discussion of Operating, Investing, Financing Cash Flows Cash, cash equivalents and restricted cash increased by $59.6 million for the fiscal year ended March 31, 2024 and decreased by $68.8 million for the fiscal year ended March 31, 2023, before foreign exchange effects on cash. Components of these changes are discussed below in more detail. Operating Activities.
Other expense of $26.9 million for fiscal 2023 compared to other expense of $10.9 million for fiscal 2022, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 19 to our consolidated financial statements). Gain (Loss) on Extinguishment of Debt.
Other expense of $26.9 million for fiscal 2024 was comparable to other expense of $26.9 million for fiscal 2023, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 19 to our consolidated financial statements). Gain on Extinguishment of Debt.
The maximum principal amount of the IP Credit Facility is $161.9 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries. At March 31, 2023, there was $143.8 million outstanding under the IP Credit Facility. 71 Table of Contents • Backlog Facility and Other: ◦ Backlog Facility.
The maximum principal amount of the IP Credit Facility is $161.9 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries. At March 31, 2024, there was $109.9 million outstanding under the IP Credit Facility. 74 Table of Contents • Backlog Facility and Other: ◦ Backlog Facility.
The following table presents share-based compensation expense by financial statement line item: Year Ended March 31, 2023 2022 (Amounts in millions) Share-based compensation expense included in: General and administrative expense $ 95.4 $ 98.3 Restructuring and other (1) 4.2 — Direct operating expense 1.7 1.2 Distribution and marketing expense 0.7 0.5 Total share-based compensation expense $ 102.0 $ 100.0 _______________________ (1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.
The following table presents share-based compensation expense by financial statement line item: Year Ended March 31, 2024 2023 (Amounts in millions) Share-based compensation expense included in: General and administrative expense $ 77.6 $ 95.4 Restructuring and other (1) 9.4 4.2 Direct operating expense 2.8 1.7 Distribution and marketing expense 0.8 0.7 Total share-based compensation expense $ 90.6 $ 102.0 _______________________ (1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.
As of March 31, 2023, we have a valuation allowance of $455.7 million against certain U.S. and foreign deferred tax assets that may not be realized on a more likely than not basis.
As of March 31, 2024, we have a valuation allowance of $808.3 million against certain U.S. and foreign deferred tax assets that may not be realized on a more likely than not basis.
However, we currently believe that cash flow from operations, cash on hand, revolving credit facility availability, the monetization of trade accounts receivable, tax-efficient financing, the availability of our Production Tax Credit Facility, IP Credit Facility and Backlog Facility and other financing obligations, and available production or license financing will be adequate to meet known operational cash and debt service (i.e. principal and interest payments) requirements for the next 12 months and beyond, including the funding of future film and television production, film and programming rights acquisitions and theatrical and home entertainment release schedules, and future equity method or other investment funding requirements, and international expansion in our remaining international territories.
However, we currently believe that cash flow from operations, cash on hand, revolving credit facility availability, the monetization of trade accounts receivable, tax-efficient financing, the availability of our Production Tax Credit Facility, IP Credit Facility and Backlog Facility and other financing obligations, available production, license or intellectual property financing, and proceeds from equity financing (see Note 21 to our audited consolidated financial statements), will be adequate to meet known operational cash and debt service (i.e. principal and interest payments) requirements for the next 12 months and beyond, including the funding of future film and television production, film and programming rights acquisitions and theatrical and home entertainment release schedules, and future equity method or other investment funding requirements.
The following table sets forth the components of interest expense for the fiscal years ended March 31, 2023 and 2022: Year Ended March 31, 2023 2022 (Amounts in millions) Interest Expense Cash Based: Revolving credit facility $ 12.9 $ 6.6 Term loans 63.0 33.1 Senior Notes 51.8 54.8 Other (1) 67.8 31.0 195.5 125.5 Amortization of debt issuance costs and other non-cash interest (2) 25.7 50.5 Total interest expense $ 221.2 $ 176.0 ______________________ (1) Amounts include payments and receipts associated with the Company's interest rate swaps (see Note 18 to our consolidated financial statements) and interest payments associated with certain film related obligations (Production Tax Credit Facility, IP Credit Facility, Backlog Facility and other, see Note 8 to our consolidated financial statements).
The following table sets forth the components of interest expense for the fiscal years ended March 31, 2024 and 2023: Year Ended March 31, 2024 2023 (Amounts in millions) Interest Expense Cash Based: Revolving credit facility $ 43.0 $ 12.9 Term loans 90.6 63.0 Senior Notes 39.8 51.8 Other (1) 68.1 67.8 241.5 195.5 Amortization of debt issuance costs and other non-cash interest (2) 28.3 25.7 Total interest expense $ 269.8 $ 221.2 ______________________ (1) Other interest expense includes payments associated with certain film related obligations (Production Tax Credit Facility, IP Credit Facility, Backlog Facility and other, see Note 8 to our consolidated financial statements), and payments and receipts associated with the Company's interest rate swaps (Note 18 to our consolidated financial statements).
The noncontrolling interest holder has a right to put and the Company has a right to call the remaining amount of noncontrolling interest at fair value, subject to a cap, exercisable for thirty (30) days beginning November 12, 2024, as amended.
The Company has a remaining redeemable noncontrolling interest representing 12.5% of Pilgrim Media Group. The noncontrolling interest holder has a right to put and the Company has a right to call the noncontrolling interest at fair value, subject to a cap, exercisable for thirty (30) days beginning November 12, 2024, as amended.
Payments to distributors for marketing support costs for which Starz receives a discrete benefit are recorded as distribution and marketing costs, and payments to distributors for which Starz receives no discrete benefit are recorded as a reduction of revenue. 51 Table of Contents Goodwill and Indefinite-Lived Intangibles.
Payments to distributors for marketing support costs for which Starz receives a discrete benefit are recorded as distribution and marketing costs, and payments to distributors for which Starz receives no discrete benefit are recorded as a reduction of revenue. Goodwill and Indefinite-Lived Intangible Assets.
See Note 7 to our consolidated financial statements. Gain on Investments. Gain on investments of $44.0 million for fiscal 2023 primarily represented a gain associated with the sale of a portion of our ownership interest in STARZPLAY Arabia, compared to a gain on investments of $1.3 million for fiscal 2022. Equity Interests Income (Loss).
See Note 7 to our consolidated financial statements. Gain on Investments, net. Gain on investments, net was $3.5 million for fiscal 2024, as compared to gain on investments, net of $44.0 million for fiscal 2023, which primarily represented a gain associated with the sale of a portion of our ownership interest in STARZPLAY Arabia. Equity Interests Income.
In addition, we continue to invest in our LIONSGATE+ international service in its remaining territories, and may acquire businesses or assets, including individual films or libraries that are complementary to our business. Any such transaction could be financed through our cash flow from operations, credit facilities, equity or debt financing.
In addition, we may acquire businesses or assets, including individual films or libraries that are complementary to our business. Any such transaction could be financed through our cash flow from operations, credit facilities, equity or debt financing.
This compares to net loss attributable to our shareholders for the fiscal year ended March 31, 2022 of $188.2 million, or basic and diluted net loss per common share of $0.84 on 224.1 million weighted average common shares outstanding. Segment Results of Operations and Non-GAAP Measures The Company's primary measure of segment performance is segment profit.
This compares to net loss attributable to our shareholders for the fiscal year ended March 31, 2023 of $2,010.2 million, or basic and diluted net loss per common share of $8.82 on 227.9 million weighted average common shares outstanding. Segment Results of Operations and Non-GAAP Measures The Company's primary measure of segment performance is segment profit.
We have a term loan B facility due March 2025 (the "Term Loan B", and, together with the Revolving Credit Facility and the Term Loan A, the "Senior Credit Facilities"), with $831.7 million outstanding at March 31, 2023. • Senior Notes: We have $800.0 million outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at March 31, 2023.
We have a term loan B facility due March 2025 (the "Term Loan B", and, together with the Revolving Credit Facility and the Term Loan A, the "Senior Credit Facilities"), with $819.2 million outstanding at March 31, 2024. • Senior Notes: We have $715.0 million outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at March 31, 2024.
As a result of these restructuring initiatives, we recorded content impairment charges related to the Media Networks segment in fiscal 2023 of $379.3 million. These charges are included in restructuring and other in the consolidated statement of operations (see Note 3 and Note 15 to our consolidated financial statements). Valuation Assumptions.
As a result of these restructuring initiatives, we recorded content impairment charges related to the Media Networks segment in the fiscal years ended March 31, 2024 and 2023 of $364.5 million and $379.3 million, respectively, which are included in restructuring and other in the consolidated statement of operations (see Note 15 to our consolidated financial statements).
During fiscal 2023 and fiscal 2022, the following original series premiered on STARZ: 69 Table of Contents Year Ended March 31, 2023 Year Ended March 31, 2022 Title Premiere Date Title Premiere Date First Quarter: First Quarter: Gaslit April 24, 2022 The Girlfriend Experience Season 3 May 2, 2021 P-Valley Season 2 June 3, 2022 Run the World Season 1 May 16, 2021 Becoming Elizabeth Season 1 June 12, 2022 Blindspotting Season 1 June 13, 2021 Who is Ghislaine Maxwell June 26, 2022 Second Quarter: Second Quarter: Power Book III: Raising Kanan Season 2 August 14, 2022 Power Book III: Raising Kanan Season 1 July 18, 2021 Serpent Queen Season 1 September 11, 2022 Heels Season 1 August 15, 2021 BMF - Black Mafia Family Season 1 September 26, 2021 Third Quarter: Third Quarter: (1) Step Up Season 3 October 16, 2022 Hightown Season 2 October 17, 2021 Dangerous Liaisons Season 1 November 6, 2022 Power Book II: Ghost Season 2 November 21, 2021 Fourth Quarter: Fourth Quarter: BMF - Black Mafia Family Season 2 January 6, 2023 Power Book IV: Force Season 1 February 6, 2022 Party Down Season 3 February 24, 2023 Outlander Season 6 March 6, 2022 Power Book II: Ghost Season 3 March 17, 2023 Shining Vale Season 1 March 6, 2022 ___________________ (1) In addition, BMF - Black Mafia Family Season 1 premiered on September 26, 2021, with the majority of episodes airing during the three months ended December 31, 2021.
During fiscal 2024 and fiscal 2023, the following original series premiered on STARZ: Year Ended March 31, 2024 Year Ended March 31, 2023 Title Premiere Date Title Premiere Date First Quarter: First Quarter: Blindspotting Season 2 April 14, 2023 Gaslit April 24, 2022 Run the World Season 2 May 26, 2023 P-Valley Season 2 June 3, 2022 Outlander Season 7A June 16, 2023 Becoming Elizabeth Season 1 June 12, 2022 Who is Ghislaine Maxwell June 26, 2022 Second Quarter: Second Quarter: Minx Season 2 July 21, 2023 Power Book III: Raising Kanan Season 2 August 14, 2022 Heels Season 2 July 28, 2023 Serpent Queen Season 1 September 11, 2022 Men in Kilts Season 2 August 11, 2023 Power Book IV: Force Season 2 July 28, 2023 Third Quarter: Third Quarter: Step Up Season 3 October 16, 2022 Shining Value Season 2 October 13, 2023 Dangerous Liaisons Season 1 November 6, 2022 Power Book III: Raising Kanan Season 3 December 1, 2023 Fourth Quarter: Fourth Quarter: Hightown Season 3 January 26, 2024 BMF - Black Mafia Family Season 2 January 6, 2023 BMF - Black Mafia Family Season 3 March 1, 2024 Party Down Season 3 February 24, 2023 Power Book II: Ghost Season 3 March 17, 2023 72 Table of Contents Direct Operating and Distribution and Marketing Expenses .
We refer to our Motion Picture and Television Production segments collectively as our Studio Business. Our revenues are derived from the U.S., Canada, the United Kingdom and other foreign countries. None of the non-U.S. countries individually comprised greater than 10% of total revenues for the years ended March 31, 2023, 2022 and 2021.
Revenues Our revenues are derived from the Motion Picture, Television Production and Media Networks segments, as described below. Our revenues are derived from the U.S., Canada, the United Kingdom and other foreign countries. None of the non-U.S. countries individually comprised greater than 10% of total revenues for the years ended March 31, 2024, 2023 and 2022.
The increase in direct operating expenses as a percentage of motion picture revenue is driven by the change in the mix of titles and product categories generating revenue in fiscal 2023 as compared to fiscal 2022, including the higher amortization rate of the fiscal 2023 theatrical slate titles as compared to the fiscal 2022 theatrical slate titles.
Direct operating expenses as a percentage of motion picture revenue decreased slightly and is driven by the change in the mix of titles and product categories generating revenue in fiscal 2024 as compared to fiscal 2023, in particular the lower amortization rate of our fiscal 2024 theatrical slate as compared to our fiscal 2023 theatrical slate.
Our qualitative assessment considered the increase in the market price of the Company’s common shares from September 30, 2022, the recent performance of the Company’s reporting units, and updated forecasts of performance and cash flows, as well as the continuing micro and macroeconomic environment, and industry considerations, and determined that since the quantitative assessment performed in the quarter ended September 30, 2022, there were no events or circumstances that rise to a level that would more-likely-than-not reduce the fair value of those reporting units below their carrying values; therefore, a quantitative goodwill impairment analysis was not required.
Our qualitative assessment considered the market price of the Company’s common shares, the recent performance of these reporting units, and updated forecasts of performance and cash flows, as well as the current micro and macroeconomic environments in relation to the current and expected performance of these reporting units, and industry considerations, and determined that since the date of the most recent quantitative assessment performed over these reporting units, there were no events or circumstances that rise to a level that would more-likely-than-not reduce the fair value of those 56 Table of Contents reporting units below their carrying values; therefore, a quantitative goodwill impairment analysis was not required for these reporting units.
Our Motion Picture and Television Production segments generate revenue principally from the licensing of content in domestic theatrical exhibition, home entertainment (e.g., digital media and packaged media), television, and international market places.
Our Motion Picture and Television Production segments generate revenue principally from the licensing of content in domestic theatrical exhibition, home entertainment (e.g., digital media and packaged media), television, and international market places. Our Media Networks segment generates revenue primarily from the distribution of our STARZ premium subscription video services.
At March 31, 2023, the carrying value of our finite-lived intangible assets was approximately $1.05 billion. Our finite-lived intangible assets primarily relate to customer relationships associated with U.S. MVPDs, including cable operators, satellite television providers and telecommunications companies ("Traditional Affiliate"), which amounted to $1.04 billion.
Finite-Lived Intangible Assets. At March 31, 2024, the carrying value of our finite-lived intangible assets was $991.8 million. Our finite-lived intangible assets primarily relate to customer relationships associated with U.S. MVPDs, including 57 Table of Contents cable operators, satellite television providers and telecommunications companies ("Traditional Affiliate"), which amounted to $909.1 million.
The estimates of fair value for the allocation between windows of exploitation on the Starz Platform and ancillary markets is based on historical experience of the values of similar titles licensed in subsequent windows and estimates of future revenues in ancillary markets. Management believes these are reasonably reliable estimates of these values, however, these estimates involve uncertainty and management judgment.
The estimates of fair value for the allocation between windows of exploitation on the Starz Platform and ancillary markets is based on historical experience of the values of similar titles licensed in subsequent windows and estimates of future revenues in ancillary markets.
Indefinite-Lived Intangibles Other Than Goodwill Impairment Assessment: For fiscal 2023, during the second quarter ended September 30, 2022, due to the events and their impact discussed above related to our Media Networks reporting unit, we performed a quantitative impairment assessment of our indefinite-lived trade names.
During the second quarter of fiscal 2024, due to the events and their impact discussed above related to our Media Networks reporting unit, we performed a quantitative impairment assessment of our indefinite-lived trade names.
Gross contribution of the Motion Picture segment for fiscal 2023 increased $30.3 million, or 8.5%, as compared to fiscal 2022 due to higher Motion Picture revenue and lower distribution and marketing expense, partially offset by higher direct operating expense. General and Administrative Expense.
Gross Contribution. Gross contribution of the Motion Picture segment for fiscal 2024 increased $47.0 million, or 12.2%, as compared to fiscal 2023 due to higher Motion Picture revenue, partially offset by higher distribution and marketing expense and direct operating expense. General and Administrative Expense.
As of March 31, 2023, the Company was in compliance with all applicable covenants. 74 Table of Contents The 5.500% Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations.
The 5.500% Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations.
At March 31, 2023, the capacity to pay dividends under the Senior Credit Facilities and the Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $2,018.8 million and accumulated deficit of $2,439.6 million were deemed free of restrictions from paying dividends at March 31, 2023.
At March 31, 2024, the capacity to pay dividends under the Senior Credit Facilities and the Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $1,116.3 million and accumulated deficit of $3,576.7 million were deemed free of restrictions from paying dividends at March 31, 2024.
The Company’s film, television, subscription and location-based entertainment businesses are backed by an 18,000-title library and a valuable collection of iconic film and television franchises. We classify our operations through three reporting segments: Motion Picture, Television Production, and Media Networks (see further discussion below).
The Company’s film, television, subscription and location-based entertainment businesses are backed by a more than 20,000-title library and a valuable collection of iconic film and television franchises. We manage and report our operating results through three reportable business segments: Motion Picture, Television Production, and Media Networks (see further discussion below).
General and administrative expenses by segment were as follows for the fiscal years ended March 31, 2023 and 2022: 57 Table of Contents Year Ended March 31, Increase (Decrease) 2023 % of Revenues 2022 % of Revenues Amount Percent (Amounts in millions) General and administrative expenses Studio Business Motion Picture $ 109.8 $ 93.1 $ 16.7 17.9 % Television Production 51.9 40.2 11.7 29.1 % Total Studio Business 161.7 133.3 28.4 21.3 % Media Networks 96.4 88.0 8.4 9.5 % Corporate 122.9 97.1 25.8 26.6 % Share-based compensation expense 95.4 98.3 (2.9) (3.0) % Purchase accounting and related adjustments 54.7 58.7 (4.0) (6.8) % Total general and administrative expenses $ 531.1 13.8% $ 475.4 13.2% $ 55.7 11.7 % General and administrative expenses increased in fiscal 2023, resulting from increases in corporate, Studio Business and Media Networks general and administrative expenses, partially offset by decreased share-based compensation expense and purchase accounting and related adjustments.
General and administrative expenses by segment were as follows for the fiscal years ended March 31, 2024 and 2023: 61 Table of Contents Year Ended March 31, Change 2024 % of Revenues 2023 % of Revenues Amount Percent (Amounts in millions) General and administrative expenses Studio Business Motion Picture $ 113.9 $ 109.8 $ 4.1 3.7 % Television Production 57.9 51.9 6.0 11.6 % Total Studio Business 171.8 161.7 10.1 6.2 % Media Networks 93.4 96.4 (3.0) (3.1) % Corporate 136.1 122.9 13.2 10.7 % Share-based compensation expense 77.6 95.4 (17.8) (18.7) % Purchase accounting and related adjustments 11.6 54.7 (43.1) (78.8) % Total general and administrative expenses $ 490.5 12.2% $ 531.1 13.8% $ (40.6) (7.6) % General and administrative expenses decreased in fiscal 2024, resulting from decreased purchase accounting and related adjustments, share-based compensation expense and Media Networks general and administrative expenses, partially offset by increased Studio Business and corporate general and administrative expenses.
Outstanding loan balances under the Distribution Loans must be repaid with any cash collections from the underlying collateral if and when received by the Company, and may be voluntarily repaid at any time without prepayment penalty fees. As of March 31, 2023, $51.0 million remains outstanding under the Distribution Loans.
Outstanding loan balances under these "other" loans must be repaid with any cash collections from the underlying collateral if and when received by the Company, and may be voluntarily repaid at any time without prepayment penalty fees.
See Note 18 to our consolidated financial statements. 75 Table of Contents Investing Activities.
See Note 18 to our consolidated financial statements. Investing Activities.
The increase in Starz Networks direct operating expense was primarily due to higher programming cost amortization related to our Starz Originals of $89.2 million primarily related to higher cost original series premieres, higher programming cost amortization of $3.6 million related to library content, and other increases in direct operating expense, partially offset by lower programming amortization of $4.1 million related to theatrical releases under our programming output agreements, and a benefit in fiscal 2023 of $10.0 million associated with the modification of a content licensing arrangement.
The decrease in Starz Networks direct operating expense was due primarily to lower programming cost amortization of $27.8 million related to library content, $16.3 million related to theatrical releases under our programming output agreements, partially offset by an increase of $9.7 million related to our Starz Originals, and a benefit in fiscal 2023 of $10.0 million associated with the modification of a content licensing arrangement.
Cash flows used in operating activities for the fiscal years ended March 31, 2023 and 2022 were as follows: Year Ended March 31, 2023 2022 Net Change (Amounts in millions) Net Cash Flows Used In Operating Activities $ (114.3) $ (660.9) $ 546.6 Cash flows used in operating activities for the fiscal year ended March 31, 2023 were $114.3 million compared to cash flows used in operating activities of $660.9 million for the fiscal year ended March 31, 2022.
Cash flows provided by (used in) operating activities for the fiscal years ended March 31, 2024 and 2023 were as follows: Year Ended March 31, 2024 2023 Net Change (Amounts in millions) Net Cash Flows Provided By (Used In) Operating Activities $ 396.8 $ (114.3) $ 511.1 Cash flows provided by operating activities for the fiscal year ended March 31, 2024 were $396.8 million compared to cash flows used in operating activities of $114.3 million for the fiscal year ended March 31, 2023.
The ultimate amount of insurance recovery cannot be estimated at this time. Other. In fiscal 2023, other direct operating expenses includes approximately $7.2 million in development costs written off in connection with certain management changes and changes in the theatrical marketplace in the Motion Picture segment, as a result of changes in strategy across its theatrical slate.
Other direct operating expense includes share-based compensation, and in fiscal 2023, other direct operating expenses also includes approximately $7.2 million in development costs written off in connection with certain management changes and changes in the theatrical marketplace in the Motion Picture segment, as a result of changes in strategy across its theatrical slate.
Media Networks revenue increased $10.3 million reflecting increased revenue at LIONSGATE+ of $43.4 million, partially offset by a decrease of $33.1 million at Starz Networks. See further discussion in the Segment Results of Operations section below. Direct Operating Expenses.
Media Networks revenue increased $29.9 million, and reflected increased revenue at LIONSGATE+ of $60.3 million, offset by a decrease of $30.4 million at Starz Networks. See further discussion in the Segment Results of Operations section below. Direct Operating Expenses.
We have a term loan A facility due April 2026 (the "Term Loan A"), with $428.2 million outstanding at March 31, 2023. ◦ Term Loan B.
We have a term loan A facility due April 2026 (the "Term Loan A"), with $399.3 million outstanding at March 31, 2024.
Restructuring and other costs were as follows for the fiscal years ended March 31, 2023 and 2022 (see Note 15 to our consolidated financial statements): Year Ended March 31, Increase (Decrease) 2023 2022 Amount Percent (Amounts in millions) Restructuring and other: Content and other impairment (1) $ 385.2 $ — $ 385.2 n/a Severance (2) Cash 18.0 $ 4.6 13.4 291.3 % Accelerated vesting on equity awards (see Note 13 to our consolidated financial statements) 4.2 — 4.2 n/a Total severance costs 22.2 4.6 17.6 382.6 % COVID-19 related charges (3) 0.1 1.1 (1.0) (90.9) % Transaction and other costs (4) 4.4 11.1 (6.7) (60.4) % $ 411.9 $ 16.8 $ 395.1 nm _______________________ nm - Percentage not meaningful.
Restructuring and other costs were as follows for the fiscal years ended March 31, 2024 and 2023 (see Note 15 to our consolidated financial statements): Year Ended March 31, Increase (Decrease) 2024 2023 Amount Percent (Amounts in millions) Restructuring and other: Content and other impairments (1) $ 377.3 $ 385.2 $ (7.9) (2.1) % Severance (2) Cash 37.2 $ 18.0 19.2 106.7 % Accelerated vesting on equity awards (see Note 13 to our consolidated financial statements) 9.4 4.2 5.2 123.8 % Total severance costs 46.6 22.2 24.4 109.9 % COVID-19 related charges — 0.1 (0.1) (100.0) % Transaction and other costs (3) 84.6 4.4 80.2 nm $ 508.5 $ 411.9 $ 96.6 23.5 % _______________________ nm - Percentage not meaningful.
Net loss attributable to our shareholders for the fiscal year ended March 31, 2023 was $2,010.2 million, or basic and diluted net loss per common share of $8.82 on 227.9 million weighted average common shares outstanding.
Net loss attributable to our shareholders for the fiscal year ended March 31, 2024 was $1,102.9 million, or basic and diluted net loss per common share of $4.77 on 233.6 million weighted average common shares outstanding.
See Note 8 to our consolidated financial statements for a discussion of our film related obligations. Accounts Receivable Monetization and Governmental Incentives Our accounts receivable monetization programs include individual agreements to monetize certain of our trade accounts receivable directly with third-party purchasers and a revolving agreement to monetize designated pools of trade accounts receivable with various financial institutions.
Accounts Receivable Monetization and Governmental Incentives Our accounts receivable monetization programs include individual agreements to monetize certain of our trade accounts receivable directly with third-party purchasers, and previously have included a revolving agreement to monetize designated pools of trade accounts receivable with various financial institutions.
At March 31, 2023, there was $1,349.9 million outstanding of production loans. • Programming Notes: Programming notes represent individual loans for the licensing of film and television programs that we license, related to our Media Networks business. The Company's programming notes had contractual repayment dates in April and May 2023.
At March 31, 2024, there was $1,292.2 million outstanding of production loans. • Programming Notes: Programming notes represent individual loans for the licensing of film and television programs that we license, related to our Media Networks business.
Our income tax provision differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, changes in the valuation allowance against our deferred tax assets, and certain minimum taxes and foreign withholding taxes.
Our income tax benefit (provision) differs from the U.S. federal statutory income tax rate of 21% multiplied by income (loss) before taxes due to the mix of our earnings across the various jurisdictions in which our operations are conducted, changes in valuation allowances against our deferred tax assets, and certain minimum income and foreign withholding taxes.

… 276 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+2 added−1 removed8 unchanged
Biggest changeThe table also presents the cash flows of the principal amounts of the financial instruments, or the cash flows associated with the notional amounts of interest rate derivative instruments, and related weighted-average interest rates by expected maturity or required principal payment dates and the fair value of the instrument as of March 31, 2023: Year Ended March 31, Fair Value 2024 2025 2026 2027 2028 Thereafter Total March 31, 2023 (Amounts in millions) Variable Rates : Revolving Credit Facility (1) $ — $ — $ — $ — $ — $ — $ — $ — Average Interest Rate — — — — — — Term Loan A (1) 28.9 41.2 44.5 313.6 — — 428.2 415.4 Average Interest Rate 6.61 % 6.61 % 6.61 % 6.61 % — — Term Loan B (1) 12.5 819.2 — — — — 831.7 817.1 Average Interest Rate 7.11 % 7.11 % — — — — Film related obligations (2) 1,007.2 796.3 59.8 30.4 141.4 — 2,035.1 2,035.1 Average Interest Rate 6.90 % 6.58 % 7.05 % 7.46 % 6.28 % — Fixed Rates: 5.500% Senior Notes — — — — — 800.0 800.0 510.0 Average Interest Rate — — — — — 5.50 % Interest Rate Swaps (3) Variable to fixed notional amount — 1,700.0 — — — — 1,700.0 41.1 ____________________ (1) The effective interest rate in the table above is before the impact of interest rate swaps.
Biggest changeThe table also presents the cash flows of the principal amounts of the financial instruments, or the cash flows associated with the notional amounts of interest rate derivative instruments, and related weighted-average interest rates by expected maturity or required principal payment dates and the fair value of the instrument as of March 31, 2024: Year Ended March 31, Fair Value 2025 2026 2027 2028 2029 Thereafter Total March 31, 2024 (Amounts in millions) Variable Rates : Revolving Credit Facility (1)(2) $ — $ — $ 575.0 $ — $ — $ — $ 575.0 $ 575.0 Average Interest Rate — — 7.17 % — — — Term Loan A (1)(2) 41.1 44.5 313.7 — — — 399.3 397.3 Average Interest Rate 7.17 % 7.17 % 7.17 % — — — Term Loan B (1) 819.2 — — — — — 819.2 818.1 Average Interest Rate 7.67 % — — — — — Film related obligations (3) 1,393.1 393.1 18.8 144.4 — — 1,949.4 1,949.4 Average Interest Rate 7.03 % 6.78 % 7.75 % 6.67 % — — Fixed Rates: 5.500% Senior Notes — — — — — 715.0 715.0 536.2 Interest Rate — — — — — 5.50 % Interest Rate Swaps (4) Variable to fixed notional amount 1,700.0 — — — — — 1,700.0 35.6 ____________________ (1) The effective interest rate in the table above is before the impact of interest rate swaps.
A quarter point increase of the interest rates on the variable interest film related obligations would result in $3.6 million in additional costs capitalized to the respective film or television asset for production loans and programming notes (based on the outstanding principal amount of such loans), and a $1.5 million change in annual net interest expense (based on the outstanding principal amount of such loans, and assuming the Production Tax Credit Facility and Backlog Facility are utilized up to their maximum capacity of $235.0 million and $175.0 million, respectively).
A quarter point increase of the interest rates on the variable interest film related obligations would result in $3.2 million in additional costs capitalized to the respective film or television asset for production loans and programming notes (based on the outstanding principal amount of such loans), and a $1.6 million change in annual net interest expense (based on the outstanding principal amount of such loans, and assuming the Production Tax Credit Facility and Backlog Facility are utilized up to their maximum capacity of $260.0 million and $175.0 million, respectively).
(2) Represents amounts outstanding under film related obligations (i.e., production loans, Production Tax Credit Facility, programming notes, Backlog Facility and other, and IP Credit Facility), actual amounts outstanding and the timing of 78 Table of Contents expected future repayments may vary in the future (see Note 8 to our consolidated financial statements for further information).
(3) Represents amounts outstanding under film related obligations (i.e., production loans, Production Tax Credit Facility, programming notes, Backlog Facility and other, and IP Credit Facility), actual amounts outstanding and the timing of expected future repayments may vary in the future (see Note 8 to our consolidated financial statements for further information).
At March 31, 2023, we had interest rate swap agreements to fix the interest rate on $1.7 billion of variable rate LIBOR-based debt. See Note 18 to our consolidated financial statements for additional information.
At March 31, 2024, we had interest rate swap agreements to fix the interest rate on $1.7 billion of variable rate SOFR-based debt. See Note 18 to our consolidated financial statements for additional information.
(3) Represents interest rate swap agreements on certain of our LIBOR-based floating-rate debt with fixed rates paid ranging from 2.723% to 2.915% with maturities in March 2025. See Note 18 to our consolidated financial statements. 79 Table of Contents
(4) Represents interest rate swap agreements on certain of our SOFR-based floating-rate debt with fixed rates paid ranging from 2.723% to 2.915% with maturities in March 2025. See Note 18 to our consolidated financial statements. 81 Table of Contents
A 1% increase in the level of interest rates would decrease the fair value of the 5.500% Senior Notes by approximately $23.1 million, and a 1% decrease in the level of interest rates would increase the fair value of the 5.500% Senior Notes by approximately $24.0 million.
A 1% increase in the level of interest rates would decrease the fair value of the 5.500% Senior Notes by approximately $21.5 million, and a 1% decrease in the level of interest rates would increase the fair value of the 5.500% Senior Notes by approximately $22.6 million.
At March 31, 2023, our 5.500% Senior Notes had an outstanding carrying value of $776.0 million, and an estimated fair value of $510.0 million.
At March 31, 2024, our 5.500% Senior Notes had an outstanding carrying value of $696.6 million, and an estimated fair value of $536.2 million.
The applicable margin with respect to loans under the revolving credit facility and Term Loan A is a percentage per annum equal to a LIBOR rate plus 1.75%. The applicable margin with respect to loans under our Term Loan B is a percentage per annum equal to a LIBOR rate plus 2.25%.
The applicable margin with respect to loans under our Term Loan B is a percentage per annum equal to SOFR plus 0.10% plus 2.25% margin.
Assuming the revolving credit facility is drawn up to its maximum borrowing capacity of $1.25 billion, based on the applicable LIBOR in effect as of March 31, 2023, each quarter point change in interest rates would result in a $2.0 million change in annual net interest expense on the revolving credit facility, Term Loan A, Term Loan B and interest rate swap agreements.
Assuming the revolving credit facility is drawn up to its maximum borrowing capacity of $1.25 billion, based on the applicable SOFR in effect as of March 31, 2024, each quarter point change in interest rates would result in a $1.9 million change in annual net interest expense on the revolving credit facility, Term Loan A, Term Loan B and interest rate swap agreements. 80 Table of Contents The variable interest film related obligations (which includes our production loans, programming notes, Production Tax Credit Facility, IP Credit Facility, Backlog Facility and other) incur primarily SOFR-based interest, with applicable margins ranging from 0.25% to 3.25% per annum.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and 77 Table of Contents our net income would decrease.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. The applicable margin with respect to loans under the revolving credit facility and Term Loan A is a percentage per annum equal to a SOFR plus 0.10% plus 1.75% margin.
Removed
The variable interest film related obligations (which includes our production loans, programming notes, Production Tax Credit Facility, IP Credit Facility, Backlog Facility and other) incur primarily SOFR and LIBOR-based interest, with applicable margins ranging from 1.15% to 3.50% per annum.
Added
(2) The outstanding amounts under the Revolving Credit Facility and Term Loan A may become due on December 23, 2024 (i.e. 91 days prior to March 24, 2025) prior to its maturity on April 6, 2026 in the event that the aggregate principal amount of outstanding Term Loan B in excess of $250 million has not been repaid, refinanced or extended to have a maturity date on or after July 6, 2026.
Added
The Company expects to refinance and extend the maturity date of the Term Loan B prior to December 23, 2024 such that the maturity of the revolving credit facility and Term Loan A are not accelerated.

Other STRZ 10-K year-over-year comparisons