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What changed in STARZ ENTERTAINMENT CORP /CN/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of STARZ ENTERTAINMENT CORP /CN/'s 2024 and 2025 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 2025 report.

+657 added−895 removedSource: 10-K (2025-06-26) vs 10-K (2024-05-30)

Top changes in STARZ ENTERTAINMENT CORP /CN/'s 2025 10-K

657 paragraphs added · 895 removed · 318 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe 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.
Biggest changeThe ERGs are voluntary, employee-led groups that are open to everyone and help foster engaging and inclusive workplace and include: • Starz Early Career Group aims to inspire curiosity and networking to foster growth for professionals in the early stages of their careers. • Starz Ascend aims to foster inclusivity, empowerment, and pride in AAPI community within the workplace and entertainment landscape. • Starz BLACC focuses on well-being, retention, and leadership development within the workplace and entertainment landscape. • Starz Collective focuses on enhancing visibility, advocacy, and cultural celebration, with a focus on community, career, and culture for impactful support at Starz. • Starz Parents and Caregivers Together Group aims to bring together parents, expecting parents, caregivers, and allies to ensure Starz’s community fosters an environment that supports all families. • Starz Pride supports, develops and inspires future LGBTQIA+ leaders within Starz and the industry. • Starz Vets is a community of veterans and their supporters working together engage the industry from the unique perspective of a military background. • Starz Women’s Empowerment Group creates a community that supports female leaders and empowers women at all levels within Starz and the industry.
The amounts Starz pays for library content vary based on each specific agreement, but generally reflect an amount per movie, series or other programming commensurate with the quality (e.g., utility and perceived popularity) of the content being licensed. Transmission We currently uplink our programming for our linear services to non-pre-emptible, protected transponders on two satellites positioned in geo-synchronous orbit.
The amounts Starz pays for library content vary based on each specific agreement, but generally reflect an amount per movie, series or other programming commensurate with the quality (e.g., utility and perceived popularity) of the content being licensed. Transmission Starz currently uplinks its programming for its linear services to non-pre-emptible, protected transponders on two satellites positioned in geo-synchronous orbit.
Starz also has an exclusive multiyear post pay-one output licensing agreement with Universal for live-action films theatrically released in the U.S. starting January 1, 2022. The Universal agreement provides Starz with rights to exhibit these films immediately following their pay-one windows.
Starz also has an exclusive multiyear output licensing agreement with Universal for live-action films theatrically released in the U.S. starting January 1, 2022. The Universal agreement provides Starz with rights to exhibit these films immediately following their initial windows.
Lions Gate Entertainment Corp. was incorporated under the Canada Business Corporations Act using the name 3369382 Canada Limited on April 28, 1997, amended its articles on July 3, 1997 to change its name to Lions Gate Entertainment Corp., and on September 24, 1997, continued under the Business Corporations Act (British Columbia).
Starz Entertainment Corp. was incorporated under the Canada Business Corporations Act using the name 3369382 Canada Limited on April 28, 1997, amended its articles on July 3, 1997, to change its name to Lions Gate Entertainment Corp., on September 24, 1997, continued under the Business Corporations Act (British Columbia), and on May 6, 2025, amended its articles and changed its name to Starz Entertainment Corp.
Our other services, STARZ ENCORE and MOVIEPLEX, offer theatrical and independent library movies as well as original and classic television series also without advertisements. Our services include a stand-alone, direct-to-consumer app, 17 linear networks, and on-demand and online viewing platforms.
STARZ offers premium original series and recently released and library movies without advertisements. Starz’s other services, STARZ ENCORE and MOVIEPLEX, offer theatrical and independent library movies as well as original and classic television series also without advertisements. Starz’s services include a stand-alone, direct-to-consumer app, 17 linear networks, and on-demand and online viewing platforms.
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).
(at least 2026) Starz’s output agreements generally require payment 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).
The STARZ app: • Is available for purchase as a standalone OTT service for a recurring monthly fee; • Is available on a wide array of platforms and devices including Amazon Fire, iOS, Android and Roku, among others; • Includes on-demand streaming and downloadable access for internet-free viewing; • Offers instant access to thousands of selections each month (including STARZ original series and commercial free movies); and • Is available as an additional benefit to paying MVPD subscribers of the Starz Networks’ linear premium services.
The STARZ app: • Is available for purchase as a standalone over-the-top service for a recurring monthly fee; • Is available on a wide array of platforms and devices including Amazon Fire, iOS, Android and Roku, among others; • Includes on-demand streaming and downloadable access for internet-free viewing; • Offers instant access to thousands of hours of programming selections each month (including STARZ original series and commercial free movies); and • Is available as an additional benefit to multichannel video programming distributor subscribers of Starz's linear premium services.
Other Employee Benefits and Programs We offer a comprehensive benefits package which includes health, dental and vision insurance, family forming benefits, mental health support, resources for caregiving (children and adult family), online fitness and meditation classes, and new parent coaching.
Employee Benefits and Programs Starz offers a comprehensive benefits package which includes health, dental and vision insurance, disability and life insurance family forming benefits, mental health support, resources for caregiving (children and adult family), online fitness and meditation classes, and new parent coaching.
We believe this strategy, combined with a proven management team, will ensure Starz Networks’ services remain a “must have” for subscribers and a meaningful profit center for our distributors. Affiliation Agreements Our services are distributed pursuant to affiliation agreements with our distributors.
Starz believes this strategy, combined with a proven management team, will ensure its services remain a “must have” for subscribers and a meaningful profit center for its distributors. Affiliation Agreements Starz’s services are distributed pursuant to affiliation agreements with its distributors.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available, free of charge, on our website at investors.lionsgate.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).
Available Information Our Annual Report on Form 10-K, and future Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available, free of charge, on our website at https://investors.starz.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”) and file such material with the Canadian Securities Administrators (the “CSA”) where it is made available under our profile at www.sedarplus.ca.
Our app and online viewing platforms offer thousands of monthly movies and series episodes from studio partners, including first-run content, along with a growing line-up of successful original programming.
The STARZ app and online viewing platforms offer thousands of hours of monthly movies and series episodes from studio partners on an on-demand basis, including first-run content, along with a growing line-up of successful original programming.
To the extent that our programming services are distributed through online platforms, we must comply with various federal and state laws and regulations applicable to online communications and commerce.
Like its competitors, to the extent that Starz’s programming services are distributed through online platforms, Starz must comply with various federal and state laws and regulations applicable to online communications and commerce.
We believe that ownership of, and/or the right to use, such trademarks, service marks, copyrights, domain names and similar intellectual property is an important factor in our businesses and that our success depends, in part, on such ownership.
Starz believes that ownership of, and/or the right to use, such trademarks, service marks, copyrights, patents, domain names and similar intellectual property is an important factor in Starz’s businesses and that Starz’s success depends, in part, on such ownership or license rights.
Our services are offered directly to consumers via the STARZ app and via our website at www.starz.com as well as through our retail partners (such as Apple and Google) for a recurring fee, or by our distributors to their subscribers either at a recurring price as part of a programming tier, package or bundle with other products or services, or on an a la carte basis.
Starz’s services are offered directly to consumers via the STARZ app and via Starz’s website at www.starz.com as well as through Starz’s retail partners (such as Apple and Google) for a recurring fee, or by Starz’s distributors to their subscribers either at a recurring price as part of a programming tier, package or bundle with other products or services, or on an a la carte basis. 7 Table of Contents The table below depicts the STARZ app and Starz’s 17 existing linear services, along with their respective on-demand services, and highlights some of their key attributes.
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.
This includes FCC oversight in connection with content-specific requirements such as closed captioning and program access requirements in connection with certain distributors and programmer services with shared attributable interests.
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.
STARZ also has brought audiences groundbreaking new series including “P-Valley” and “BMF,” among many others. Starz contracts with studios and production companies to produce original programming that appears on its services.
Community Involvement We are committed to acting responsibly and making a positive difference in the local and global community through Lionshares , our volunteer program that seeks to provide opportunities for employees to partner with a diverse range of charitable organizations.
Community Involvement 12 Table of Contents Starz is committed to act responsibly and to seek to make a positive difference in the local and global community through Starz’s volunteer program that seeks to provide opportunities for employees to partner with a diverse range of charitable organizations.
The Company's Disclosure Policy, Corporate Governance Guidelines, Standards for Director Independence, Code of Business Conduct and Ethics for Directors, Officers and Employees, Policy on Shareholder Communications, Related Person Transaction Policy, Charter of the Audit & Risk Committee, Charter of the Compensation Committee and Charter of the Nominating and Corporate Governance Committee and any amendments thereto are also available on the Company's website, as well as in print to any shareholder who requests them.
The Company’s Disclosure Policy, Corporate Governance Guidelines, Standards for Director Independence, Code of Business Conduct and Ethics, Related Person Transaction Policy, Charter of the Audit & Risk Committee, Charter of the Compensation Committee and Charter of the Nominating and Corporate Governance Committee and any amendments thereto are also available on the Company's website, https://investors.starz.com, as well as in print to any shareholder upon request to Starz’s Corporate Secretary, at either of its principal executive offices .
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.
Subscribers have access to thousands of hours of content across Starz’s library of quality programming, along with the ability to download and watch STARZ original series, blockbuster theatricals and favorite classic television series and movies.
Employee Resource Groups We provide our employees with an array of Employee Resource Groups (“ERGs”) which offer them the chance to establish a greater presence at Lionsgate and an opportunity to enhance cross-cultural awareness, develop leadership skills and network across the Company’s various business units and levels.
Employee Resource Groups Starz provides its employees with the opportunity to form an array of Employee Resource Groups (“ERGs”) which offers employees the chance to build community and enhance cross-cultural presence and awareness, develop leadership skills and network across various business units and levels at Starz.
Starz has an exclusive multiyear output licensing agreement with Lionsgate for Lionsgate label titles theatrically released in the U.S. starting January 1, 2022, and for Summit label titles theatrically released in the U.S. starting January 1, 2023.
Starz has an exclusive multiyear output licensing 9 Table of Contents agreement with New Lionsgate for Lionsgate label titles theatrically released in the U.S. starting January 1, 2022, and for New Lionsgate’s Summit label titles theatrically released in the U.S. starting January 1, 2023. Starz enjoys exclusivity vis-à-vis other services during all of its windows in this licensing agreement.
We maintain a Corporate Sponsorship Committee that prioritizes corporate philanthropic initiatives throughout Lionsgate, focusing particularly on organizations and activities related to diversity and poverty in order to increase our impact and to develop meaningful relationships with a core group of organizations and events.
Starz has a Corporate Sponsorship Committee that prioritizes corporate philanthropic initiatives throughout Starz, to increase Starz’s impact and to develop meaningful relationships with a core group of organizations and events.
Further material changes in the law and regulatory requirements that affect our business must be anticipated and there can be no assurance that we will not be materially adversely affected by future legislation, new regulation or deregulation.
Further material changes in the law and regulatory requirements that affect Starz’s business are likely to occur and there can be no assurance that Starz will not experience a material adverse effect due to future legislation, new regulation or deregulation.
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”) (and in the aggregate, the “Starz Domestic Platform”). • LIONSGATE+ .
(the “Starz Business”) substantially consisted of Lions Gate Entertainment Corp's (“Old Lionsgate” or “Parent”) Media Networks segment consisting of (i) Starz Networks, which includes the domestic distribution of 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 wholesale U.S. and Canada OTT and multichannel video programming distributors (“MVPDs”), including cable operators, satellite television providers and telecommunications companies (in the aggregate the “Starz Platform”), and (ii) International, which at that time primarily consisted of the OTT distribution of subscription video services outside the U.S. and Canada.
In fiscal 2024, STARZ premiered a strong lineup of original programming for women and underrepresented audiences including the highly-anticipated return of the time travel, fantasy series “Outlander” (Season 7), a new season of the gripping crime drama “BMF” (Season 3) and installments of the juggernaut “Power” cinematic universe, “Power Book III: Raising Kanan” (Season 3) and “Power Book IV: Force” (Season 2), among several other series and season premieres.
For its fiscal year ended March 31, 2025, Starz delivered a strong lineup of original programming for women and underrepresented audiences including new seasons of the “Power” cinematic universe hit series “Power Book II: Ghost” (Season 4) and “Power Book III: Raising Kanan” (Season 4); and the time travel, fantasy series “Outlander” (Season 7, Part 2), among several other series premieres.
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.
Corporate Strategy Designed to complement any television offering for general audiences across both wholesale and retail over-the-top, as well as traditional multichannel video programming distributor distribution platforms, STARZ is a best-in-class subscription service delivering premium original series and hit movies with appeal to women and diverse audiences.
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.
Regulation 10 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 historicall y , making it difficult to estimate the material effects that regulations may have on capital expenditures or earnings.
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.
Starz is focusing on developing and distributing authentic and engaging original programming that resonates with audiences that have been traditionally underrepresented in the premium television space.
MEDIA NETWORKS Media Networks - Starz Networks - United States Starz Networks is a leading provider of premium subscription video programming to consumers in the U.S. We sell our services on a direct-to-consumer basis and through various distributors, including OTT providers (such as Amazon, Apple, Google and Hulu) and MVPDs (such as Comcast, Charter, DIRECTV and DISH Network).
Starz sells its services on a direct-to-consumer basis and through various distributors, including over-the-top providers (such as Amazon, Apple, Google and Hulu) and multichannel video programming distributors (such as Comcast, Charter, DIRECTV and DISH Network). Launching in April 2016, Starz was among the first standalone over-the-top services offering premium video programming.
Starz Original Programming STARZ is a leader in high-quality, bold premium programming developed for women and underrepresented audiences. Its slate is driven by critically-acclaimed and award-winning scripted original series with highly-engaged audiences. STARZ Original Series like “Outlander” and “Power” have become tentpole franchises with multiple spinoff and derivative series to meet audience demand.
Starz’s resulting slate is driven by critically acclaimed and award-winning scripted original series with highly engaged audiences (as measured by overall watch time and social media engagement ) . STARZ Original Series like “Outlander” and “Power” have become tent-pole franchises with multiple spin-off and derivative series to meet audience demand.
The agreements are generally structured to be multi-year agreements with staggered expiration dates and certain of the agreements provide for annual contractual rate increases. STARZ App The STARZ app is the single destination for both direct OTT subscribers and distributor authenticated subscribers to stream or download our original series and movie content.
STARZ App The STARZ app is the single destination for both direct over-the-top subscribers and distributor authenticated subscribers to stream or download Starz’s original series and movie content.
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.
Competitive Conditions Starz operates in highly competitive markets. The market for video programming is intensely competitive and subject to rapid change. Starz competes 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.
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.
These satellites feed their signals to various swaths of the Americas. Starz leases these transponders under multi-year agreements. Starz currently transmits to these satellites from its uplink facilities provided by a third-party vendor. Regulatory Matters In the U.S., the Federal Communications Commission (the “FCC”) regulates several aspects of Starz’s and its distribution ecosystem’s operations and programming.
The information posted on our website is not incorporated into this Annual Report on Form 10-K. We will disclose on our website waivers of, or amendments to, our Code of Business Conduct and Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or persons performing similar functions.
We will disclose on our website any waivers of, or amendments to, our Code of Business Conduct and Ethics that applies to our Chief Executive Officer, Chief Financial Officer, or persons performing similar functions. 13 Table of Contents The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.
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.
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. Our library deals with major studios are typically amended on a periodic basis to add new titles and windows, with some studios choosing to license library content on an annual basis.
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.
Starz’s over- the-top service is consistently among the top dozen most subscribed video subscription services in the U.S. Starz’s flagship premium service STARZ had 19.60 million subscribers as of March 31, 2025 (total North American subscribers not including subscribers who receive programming free as part of a promotional offer).
We earn revenue under these agreements either (i) based on amounts or rates tied to the total number of subscribers who receive our services or (ii) based on amounts or rates which are not tied solely to the total number of subscribers who receive our services.
Starz earns revenue under these agreements either based on amounts or rates tied to the total number of subscribers who receive its services or on other metrics or factors. Starz’s affiliation agreements expire at various dates through 2028, and Starz intends to renew these agreements as they expire on a rolling basis.
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.
To accomplish this, Starz may help fund the distributors’ efforts to market its services or may offer discounts or waivers of license fees during limited-time promotional periods. Starz believes these efforts enhance its relationship with distributors, improve the awareness of its services and maximize subscribers and revenue over the term of these affiliation agreements.
Corporate History We are a corporation organized under the laws of the Province of British Columbia, resulting from the merger of Lions Gate Entertainment Corp. and Beringer Gold Corp. on November 13, 1997. Beringer Gold Corp. was incorporated under the Business Corporation Act (British Columbia) on May 26, 1986 as IMI Computer Corp.
Corporate History We are a corporation organized under the laws of the Province of British Columbia, taking the name Starz Entertainment Corp. on May 6, 2025, in connection with the Separation.
For specific details regarding our equity method investees and redeemable noncontrolling interests, please refer to Note 5 and Note 11 in our Audited Consolidated Financial Statements. 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.
Intellectual Property Starz currently uses a number of trademarks, service marks, copyrights, patents, domain names and similar intellectual property in connection with Starz’s businesses. Starz either licenses such intellectual property or owns it outright (including owning trademark and patent registrations and applications to register such trademarks and patents both domestically and internationally).
These original programming premieres, coupled with an increased volume of theatrical output titles drove subscription and engagement with key cohorts. Output and Content License Agreements The majority of acquired content on our services consists of movies that have been released theatrically.
Output and Content License Agreements The majority of acquired content on Starz’s services consists of movies that have been released theatricall y , which make up approximately 80% of the content available on Starz’s service s .
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.
Training and Development Starz conducts annual employee trainings on anti-harassment, privacy and information technology security, the Foreign Corrupt Practices Act, as well as manager training. Starz provides training and development to all employees, focusing on career development, professional development and industry knowledge.
We believe these efforts enhance our relationship with distributors, improve the awareness of our services and maximize subscribers and revenue over the term of these affiliation agreements. Distributors report the number of subscribers to our services and pay for services, generally, on a monthly basis.
Distributors report the number of subscribers to Starz’s services and pay for services, generally, on a monthly basis. The agreements are usually structured to be multi-year agreements with staggered expiration dates so agreements are renewed on a rolling basis, and certain of the agreements provide for annual contractual rate increases.
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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.
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ITEM 1. BUSINESS. Separation Prior to the Separation, as defined and further discussed below, Starz Entertainment Corp.
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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 .
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On May 6, 2025, Old Lionsgate, through a series of transactions contemplated by the arrangement agreement, dated as of January 29, 2025, as amended by an agreement, dated as of March 12, 2025 (as amended, the "Arrangement Agreement") completed the separation of the businesses (the “LG Studios Business”) of Lionsgate Studios Corp.
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We refer to our Motion Picture and Television Production segments collectively as our Studio Business and our Media Networks segment as our Media Networks Business . Financial information for our segments is set forth in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Annual Report.
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("Legacy Lionsgate Studios"), from the Starz Business (the “Separation”). As a result of the Arrangement Agreement, the pre-transaction shareholders of Old Lionsgate own shares in two separately traded public companies: (1) Old Lionsgate, which was renamed “Starz Entertainment Corp.” and holds, directly and through subsidiaries, the Starz Business previously held by Old Lionsgate, and (2) Lionsgate Studios Holding Corp.
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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.
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(“New Lionsgate”), which was renamed “Lionsgate Studios Corp.” and holds, directly and through subsidiaries, the LG Studios Business previously held by Old Lionsgate, and is owned by Old Lionsgate shareholders and Legacy Lionsgate Studios shareholders. Notwithstanding the legal form of the Separation, for accounting and financial reporting purposes, in accordance with U.S.
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Studio Business Motion Picture: Our Motion Picture segment includes revenues derived from the following: • Theatrical . The domestic theatrical release of motion pictures licensed to theatrical exhibitors on a picture-by-picture basis (distributed by us directly in the U.S. and through a sub-distributor in Canada).
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GAAP, due to the relative significance of the Studios Business as compared to the Starz Business and the continued involvement of Old Lionsgate’s senior management with New Lionsgate following the completion of the Starz Separation, New Lionsgate (which holds the LG Studio Business) is considered the accounting spinnor or divesting entity and Starz (which holds the Starz Business) is considered the accounting spinnee or divested entity.
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The revenues from Canada are reported net of distribution fees and release expenses of the Canadian sub-distributor. The financial terms that we negotiate with our theatrical exhibitors in the U.S. generally provide that we receive a percentage of the box office results. • Home Entertainment .
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As a result, Old Lionsgate is the accounting predecessor to New Lionsgate and the Starz Business's historical financial information has been prepared on a carve-out basis and are derived from Old Lionsgate’s consolidated financial statements and accounting records. These combined financial statements reflect the Company's combined historical financial position, results of operations and cash flows as they were historically managed.
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The sale or rental of our film productions and acquired or licensed films and certain television programs (including theatrical and direct-to-video releases) on packaged media and through digital media platforms (including pay-per-view and video-on-demand platforms, electronic sell through, and digital rental).
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Overview Starz is a leading provider of premium subscription video programming to consumers in the U.S. and Canada, offering thousands of hours of content to its subscribers including its critically acclaimed and award-winning scripted original series.
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In addition, we have revenue sharing arrangements with certain digital media platforms which generally provide that, in exchange for a nominal or no upfront sales price, we share in the rental or sales revenues generated by the platform on a title-by-title basis. • Television .
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Starz’s “linear networks” listed in the table below offer the exhibition of titles on a scheduled basis on a programmed channel (as compared to on demand viewing at a time chosen by the subscriber).
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The licensing of our theatrical productions and acquired films to the linear pay, basic cable and free television markets. In addition, when a license in our traditional pay television window is made to a subscription video-on-demand ("SVOD") or other digital platform, the revenues are included here. • International.
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The STARZ app is available across digital platforms (including but not limited to iOS, Android, Amazon Fire, and Roku) and offers a user experience that has received high user star ratings on both the iOS and Android store platforms and received Editor’s choice awards from both Apple and Google Play’s editorial team s .
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The (i) licensing of our productions, acquired films, our catalog product and libraries of acquired titles to international distributors, on a territory-by-territory basis, and (ii) the direct distribution of our productions, acquired films, and our catalog product and libraries of acquired titles in the United Kingdom. • Other .
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Typically, such negotiations would begin two to six months before the 8 Table of Contents agreement’s expiration date. Occasionally, the parties decide to engage in early renewal conversations or agree to short-term extensions to provide additional time to negotiat e . Starz works with its distributors to increase the number of subscribers to its services.
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Among others, the licensing of our film and television and related content (e.g., games, music, location-based entertainment royalties, etc.) to other ancillary markets. Television Production: Our Television Production segment includes revenues derived from the following: • Television.
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Starz Original Programming Starz is a leader in high-quality, bold premium programming developed for women and underrepresented audience s , with approximately 20% of content available on Starz’s services consisting of programming original to Starz. Starz views it as its mandate to deliver programming for, by, and about women and underrepresented voices.
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The licensing to domestic markets (linear pay, basic cable, free television and syndication) of scripted and unscripted series, television movies, mini-series and non-fiction programming. Television revenues include fixed fee arrangements as well as arrangements in which we earn advertising revenue from the exploitation of certain content on television networks.
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Starz is constantly seeking out material that reflects its mandate which can be acquired or developed into hit shows, with this mandate guiding the development process.
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Television revenues also include revenue from licenses to SVOD platforms in which the initial license of a television series is to an SVOD platform. • International. The licensing and syndication to international markets of scripted and unscripted series, television movies, mini-series and non-fiction programming. 6 Table of Contents • Home Entertainment.
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For example, Starz not only retains scouts to identify literary content that aligns with this mandate, but also actively engages with underrepresented communities to discover writers and producers to create shows in line with this focus.
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The sale or rental of television production movies or series on packaged media and through digital media platforms. • Other . Among others, the licensing of our television programs to other ancillary markets, the sales and licensing of music from the television broadcasts of our productions, and from commissions and executive producer fees earned related to talent management.
Added
These original programming premieres, coupled with recently acquired titles like “Mary & George” and “Three Women,” along with an increased volume of theatrical output titles, drive subscription and overall watch time across key cohort s , including movie lovers, women, and underrepresented minoritie s .
Removed
Media Networks Our Media Networks segment includes revenues derived from the following: • Starz Networks.
Added
However, there are periods between Starz’s windows when New Lionsgate can license the content to third parties. License fees paid by Starz to New Lionsgate for these licenses are based on a formula derived from domestic box office performanc e .
Removed
The OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S.
Added
As of June 16, 2025, we have windows through at least the following years in our significant output and library programming agreements: Significant output programming agreements Significant library programming agreements Studio Studio Lionsgate (at least 2030 for the first window) Universal (at least 2029 for the first window) Lionsgate (at least 2028) Universal (at least 2028) Paramount (at least 2026) Sony (at least 2026) Twentieth Century Fox/Disney (at least 2025) Warner Bros.
Removed
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.
Added
For example, the continued growth and development of the market for online commerce has led to increasingly stringent consumer protection laws, such as the recent “click to cancel” regulations, and complying with those laws imposes additional burdens on Starz and its similarly positioned competitors, which may increase costs and reduce earnings.
Removed
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%.
Added
Increased regulation of user data utilization practices, including self-regulation or findings under existing laws that limit Starz’s ability to collect, transfer and use user data, could increase cost of compliance with regulations and reduce earnings.
Removed
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese 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.
Biggest changeThese risks may include: • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • the potential loss of Bell Media as its Canadian distribution partner; • 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; • the impact of trade disputes; anti-corruption laws and regulations such as the Foreign Corrupt Practices Act that impose strict requirements on how Starz conducts its 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; • strikes or other employment actions that may make it difficult to produce and/or localize content; • the spread of communicable diseases which may impact business in such jurisdictions • foreign privacy and data protection laws and regulations, as well as data localization requirements, and changes in these laws and requirements; and • the impact of potential U.S. tariffs levied on international production activities.
In addition, during times of economic instability, including disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from global pandemics, wars, or recessions, it has been difficult for many companies to obtain financing in the public markets or to obtain debt financing.
In addition, during times of economic instability, including disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from, for example, global pandemics, wars, or recessions, it has been difficult for many companies to obtain financing in the public markets or to obtain debt financing.
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.
If distributors refuse to carry Starz’s services, choose to offer, market, promote and/or position affiliated services more favorably than Starz’s 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 Starz’s business, financial condition and results of operations.
These changes and consolidations in the industry may provide distributors additional leverage in negotiating their affiliation agreements with us, which may result in less favorable terms to us, including fee reductions. The renewal negotiation process for affiliation agreements is typically lengthy.
These changes and consolidations in the industry may provide distributors additional leverage in negotiating their affiliation agreements with Starz, which may result in less favorable terms to Starz, including fee reductions. The renewal negotiation process for affiliation agreements is typically lengthy.
STARZ has entered into multi-year satellite transponder leases for carriage of the STARZ networks’ programming. These leases provide for replacement transponders and/or replacement satellites, as applicable, throughout the term of the leases to ensure continued carriage of STARZ programming in the event of transponder or satellite failures.
Starz has entered into multi-year satellite transponder agreements for carriage of the Starz networks’ programming. These agreements provide for replacement transponders and/or replacement satellites, as applicable, throughout the term of the agreements to ensure continued carriage of Starz programming in the event of transponder or satellite failures.
Reduced popularity of our programs or negative publicity associated with our content or brands may decrease our audience share and viewer reach and could have a material adverse effect on our business, financial condition and results of operations.
Reduced popularity of its programs or negative publicity associated with its content or brands may decrease its audience share and viewer reach and could have a material adverse effect on its business, financial condition and results of operations.
In certain cases, renewals are not agreed upon prior to the expiration of a given agreement, and therefore the distributor could suspend carriage of our programming or the programming could continue to be carried by the relevant distributor pursuant to the terms and conditions in the expired affiliation agreement.
In certain cases, renewals are not agreed upon prior to the expiration of a given agreement, and therefore, the distributor could suspend or terminate carriage of Starz programming or the programming could continue to be carried by the relevant distributor pursuant to the terms and conditions in the expired affiliation agreement.
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.
Starz’s actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of its business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse business consequences.
Any proceedings, actions, claims or inquiries initiated by or against us, whether successful or not, may be time consuming, result in costly litigation, damage awards, consent decrees, injunctive relief or increased costs of business, require us to change our business practices or products, result in negative publicity, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm our business and financial results.
Any proceedings, actions, claims or inquiries initiated by or against Starz, whether successful or not, may be time consuming, result in costly litigation, damage awards, consent decrees, injunctive relief or increased costs of business, require it to change its business practices or products, result in negative publicity, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm its business and financial results.
Additionally, our direct-to-consumer service has historically been and continues to be a target for patent infringement allegations from non-practicing patent holders, and new allegations may arise in the future due to technological changes in our service or the streaming industry generally and the rapid rate of issuance of new patents.
For example, Starz’s direct-to-consumer service has historically been and continues to be a target for patent infringement allegations from non-practicing patent holders, and new allegations may arise in the future due to technological changes in Starz’s service or the streaming industry generally and the rapid rate of issuance of new patents.
Our ability to make scheduled payments on or refinance our debt obligations will depend on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control, including global pandemics, wars and their effects.
Starz’s ability to make scheduled payments on or refinance its debt obligations will depend on Starz’s financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond Starz’s control, including global pandemics, wars, recessions and their effects.
Changes in laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting net neutrality, could decrease the demand for our service and increase our cost of doing business.
Changes in laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting net neutrality, could decrease the demand for Starz’s service and increase its cost of doing business.
It is possible that we may be unable to obtain renewals with our current distributors on as favorable terms, if at all. It is also possible that we may be unable to successfully negotiate affiliation agreements with new distributors to carry our programming. It is also possible that some distributors may even decide to exit the video delivery sector entirely.
It is possible that Starz may be unable to obtain renewals with its current distributors on as favorable terms, if at all. It is also possible that Starz may be unable to successfully negotiate affiliation agreements with new distributors to carry its programming. Some distributors may even decide to exit the video delivery sector entirely.
In addition, certain programming networks affiliated with broadcast networks like ABC, CBS, Fox or NBC or other programming networks affiliated with sports and certain general entertainment networks with strong viewer ratings, have a competitive advantage over our services in obtaining distribution through the “bundling” of carriage agreements for such programming networks with a distributor’s right to carry the affiliated broadcasting network.
In addition, certain programming networks affiliated with broadcast networks like ABC, CBS, Fox or NBC or other programming networks affiliated with sports and certain general entertainment networks with strong viewer ratings have a competitive 18 Table of Contents advantage over Starz’s services in obtaining distribution through the “bundling” of carriage agreements for such programming networks with a distributor’s right to carry the affiliated broadcasting network.
We face intense competition from other providers of programming services for the right to be carried by a particular distributor, for the right to be carried by such distributor on a particular tier, in a particular package of service or in bundles with other services, and for prominent placement and effective merchandising on distributor and advertising platforms.
Starz faces intense competition from other providers of programming services for the right to be carried by a particular distributor, for the right to be carried by such distributor on a particular tier, in a particular package of service or in bundles with other services, and for prominent placement and effective merchandising on distributor and advertising platforms.
Additionally, there can also be no assurance that we will not face credit rating downgrades as a result of weaker than anticipated performance of our businesses, fluctuations in our leverage or cost of capital or other factors.
Additionally, there can also be no assurance that Starz will not face credit rating downgrades as a result of weaker than anticipated performance of its businesses, fluctuations in its leverage or cost of capital or other factors.
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.
As a distributor of media content, in the ordinary course of business, Starz may face potential claims for defamation, invasion of privacy, negligence, copyright or trademark infringement, claims related to the mature nature of some of its content, and other claims based on the nature and content of the materials distributed or statements made by personnel or 19 Table of Contents talent regarding or promoting those materials or attributable to its business.
However, we may not realize the anticipated benefit from the transactions we pursue; there may be liabilities assumed that we did not discover or that we underestimated in the course of performing our due diligence; the negotiation of the transaction and the integration of the acquired business could require us to incur significant costs and cause diversion of management's time and resources; the transaction could result in impairment of goodwill and other intangibles, development write-offs and other related expenses; the transaction may pose challenges in the consolidation and integration of information technology, accounting systems, personnel and operations; and we may have difficulty managing the combined entity in the short term if we experience a significant loss of management personnel during the transition period after a significant acquisition.
However, Starz may not realize the anticipated benefit from the transactions it pursues; there may be liabilities assumed that it did not discover or that it underestimated in the course of performing its due diligence; the negotiation of the transaction and the integration of the acquired business could require Starz to incur significant costs and cause diversion of management’s time and resources; the transaction could result in impairment of goodwill and other intangibles, development write-offs and other related expenses; the transaction may pose challenges in the consolidation and integration of information technology, accounting systems, personnel and operations; and Starz may have difficulty managing the combined entity in the short term if it experiences a significant loss of management personnel during the transition period after a significant acquisition.
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.
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 material adverse effect on its business, financial condition, results of operations and cash flows. Starz’s success is also dependent upon its continued ability to transmit its programming to distributors.
If our cash flow from operations declines significantly, it could result in the inability to pay the principal, premium, if any, and interest on our indebtedness.
If Starz’s cash flow from operations declines significantly, it could result in the inability to pay the principal, premium, if any, and interest on its indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness.
If Starz’s cash flows and capital resources are insufficient to fund its debt service obligations, Starz could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures, dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance its indebtedness.
Changes in consumer behavior, as well as evolving technologies and distribution models, may negatively affect our business, financial condition or results of operations. Our success depends on our ability to anticipate and adapt to shifting content consumption patterns.
Changes in consumer behavior, as well as evolving technologies and distribution models, may negatively affect Starz’s business, financial condition, results of operations or cash flows. Starz’s success depends on its ability to anticipate and adapt to shifting content consumption patterns.
To the extent there are increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors, changes to rules, regulations or industry standards concerning payments, loss of payment partners and/or disruptions or failures in our payment processing systems, partner systems or payment products, including products we use to update payment information, our revenue, operating expenses and results of operations could be adversely impacted.
To the extent there are increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors, changes to rules, regulations or industry standards concerning payments, loss of payment partners and/or disruptions or failures in Starz’s payment processing systems, partner systems or payment products, including products Starz uses to update payment information, Starz’s revenue, operating expenses and results of operations could be adversely affected.
Our direct-to-consumer service relies, in part, on sales platforms owned by third parties, some of which are affiliated with or have investments in competing streaming products, to make our service available to our subscribers and viewers.
In order to make its services available to its subscribers and viewers, Starz’s direct-to-consumer service relies, in part, on sales platforms owned by third parties, some of which are affiliated with or have investments in competing streaming products.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, reputational harm, and other adverse business consequences. Other changes in consumer protection laws and the interpretations thereof, could have a materially adverse effect on our business, financial condition and results of operations. Levies/Taxes.
Starz’s actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, reputational harm, and other adverse business consequences. Other changes in consumer protection laws and the interpretations thereof, could have a material adverse effect on its business, financial condition, results of operations and cash flows. Levies/Taxes .
These changes include the increase in the number of advertising-based video on demand services or free, ad-supported streaming linear channels (also known as FAST channels) or increased cord-cutting.
These changes include the increase in the number of advertising-supported video on demand services or free, ad-supported streaming linear channels (also known as FAST channels).
Although we currently carry business interruption insurance for potential losses (including earthquake-related losses), there can be no assurance that such insurance will be sufficient to compensate us for losses that may occur or that such insurance may continue to be available on affordable terms.
Although Starz currently carries business interruption insurance for potential losses (including earthquake- related losses), there can be no assurance that such insurance will be sufficient to compensate for losses that may occur or that such insurance may continue to be available on affordable terms.
Because original programming often involves a greater degree of financial commitment, as compared to acquired programming that we license from third parties, and because our branding strategies depend significantly on a relatively small number of original series, a failure to anticipate viewer preferences for such series could be especially detrimental to our business.
Because original programming often involves a greater degree of financial commitment, as compared to existing programming acquired from third parties, and because Starz’s branding strategies depend significantly on a relatively small number of original series, a failure to correctly anticipate viewer preferences for such series could be especially detrimental to Starz’s business.
Moreover, our services compete with other video programming services for marketing and distribution.
Moreover, Starz’s services compete with other video programming services for marketing and distribution.
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.
Subscribers to the STARZ direct-to-consumer service pay for the service using a variety of different payment methods, including credit and debit cards. Starz relies on internal systems and those of third parties to process payment.
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.
To an increasing extent, the success of Starz depends on exclusive original programming and its ability to accurately predict how audiences will respond to its original programming. Starz must invest substantial amounts in the development, production, and marketing of its original programming before it learns whether such content will reach anticipated audience acceptance levels.
We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
Starz may not be able to consummate such dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
We are an independent distributor and producer. Most of the major U.S. studios are part of large diversified corporate groups with a variety of other operations that can provide both the means of distributing their products and stable sources of earnings that may allow them to better offset fluctuations in the financial performance of their motion picture and television operations.
Most of the major U.S. studios are part of large diversified corporate groups with a variety of other operations that can provide both the means of distributing their products and stable sources of earnings that may allow them to better offset fluctuations in the financial performance of their operations.
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.
These preferences are subject to influences such as the critical acclaim of its content, the format in which content is released, the 15 Table of Contents talent involved, the genre and specific subject matter of its content, audience reaction to its content, the quality and acceptance of content that its competitors release into the marketplace, the availability of alternative forms of entertainment (including user-generated content) and leisure activities, general economic conditions and other tangible and intangible factors.
Given this, along with the fact that switching “cloud” computing services to another provider may be difficult, any problems faced by our “cloud” computing provider, including technological or business-related disruptions, as well as cybersecurity threats and regulatory interference, or any unanticipated interference with our use of our current “cloud” service provider could impact our operations and our business could be adversely impacted.
Given this, along with the fact that switching “cloud” computing services to another provider may be difficult, any problems faced by Starz’s “cloud” computing provider, including technological or business-related disruptions, as well as cybersecurity threats and regulatory interference, or any unanticipated interference with Starz’s use of its current “cloud” service provider could adversely impact its business, financial condition, results of operations and cash flows.
We have offices located in Southern California, New York and Colorado, which are subject to natural disasters such as earthquakes, wildfires and flooding. Although we have developed certain plans to respond in the event of a disaster, there can be no assurance that they will be effective in the event of a specific disaster.
Starz has offices located in Southern California, New York, and Colorado, which are subject to natural disasters such as earthquakes or storms. Although Starz has developed certain plans to respond in the event of a disaster, there can be no assurance that they will be effective in the event of a specific disaster.
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.
Other changes in laws relating to the internet or other areas of Starz’s business and the interpretations thereof could cause it to incur additional expenses or otherwise negatively affect its business. Additionally, as Starz grows its direct-to-consumer business, it may be subject to additional consumer legal claims and state and local consumer protection regulation.
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.
Technology and business models in Starz’s industry, and the ways in which viewers consume content, 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 revenue.
No assurance can be given that expansion, acquisition or other opportunities will be successful, completed on time, or that we will realize expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits. Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
No assurance can be given that expansion, acquisition or other opportunities will be successful or completed on time, or that Starz will realize expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits. Any of the foregoing could have a material adverse effect on Starz’s business, financial condition, results of operations and cash flows.
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.
If these third parties do not continue to provide access to its direct-to-consumer service on their platforms or are unwilling to do so on terms acceptable to it, Starz’s business could be adversely affected.
If we are unable to maintain our fraud and chargeback rate at acceptable levels, card networks may impose fines, our card approval rate may be impacted and we may be subject to additional card authentication requirements. We face substantial competition in all aspects of our business, including competition for marketing and carriage of our services.
If Starz is unable to maintain its fraud and chargeback rate at acceptable levels, card networks may impose fines, its card approval rate may be impacted and Starz may be subject to additional card authentication requirements. Starz faces substantial competition in all aspects of its business, including competition for marketing and carriage of its services.
Our success depends, in part, upon popularity, viewer preferences and audience acceptance of our content.
Starz’s success depends, in part, upon popularity, viewer preferences and audience acceptance of its content.
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.
The agreements governing Starz’s corporate indebtedness contain a number of restrictive covenants that impose operating and financial restrictions on Starz and limit its ability to engage in acts that may be in its long-term best interest, including restrictions on its 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 27 Table of Contents right of payment to the debt under such agreements; make loans or investments; incur liens; restrict dividends, loans or asset transfers from its 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 its assets to, another person; enter into transactions with affiliates; and enter into new lines of business.
This trend has impacted certain traditional television distribution models, as demonstrated by industrywide declines in broadcast and cable ratings and declines in cable, direct broadcasting satellite and telco television subscribers (“cord cutting”).
This trend has impacted certain traditional television distribution models, as demonstrated by industry wide declines in broadcast and cable ratings and declines in cable, direct broadcast satellite and telco television subscribers (i.e., “cord cutting”).
We depend in part on our distributors to market and present our services, the lack of which may result in reduced customer demand. At times, certain of our distributors do not allow us to participate in marketing campaigns or other promotional activities to market our services or may not surface or position us favorably on their platforms.
Starz depends, in part, on distributors to market and present its services, the lack of which may result in reduced customer demand. At times, certain of Starz’s distributors do not allow it to participate in marketing campaigns or other promotional activities to market its services or may not surface or position Starz favorably on their platforms.
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.
Given uncertainty around these rules, coupled with potentially significant political and economic 24 Table of Contents power of local network operators, Starz could experience discriminatory or anti-competitive practices that could impede its growth, cause it to incur additional expense or otherwise negatively affect its business.
If we are unable to produce original programming content on a cost-effective basis our business, financial condition and results of operations would be materially adversely affected. Our tax rate is uncertain and may vary from expectations.
If we are unable to produce original programming content on a cost-effective basis our business, financial condition and results of operations would experience a material adverse effect. Our tax rate is uncertain and may vary from expectations.
We rely upon the ability of consumers to access our service through the internet. If network operators block, restrict or otherwise impair access to our service over their networks, our service and business could be negatively affected.
Starz relies upon the ability of consumers to access its service through the internet. If network operators block, restrict or otherwise impair access to its service over their networks, Starz’s service and business could be negatively affected.
Our inability to participate in the marketing of our services or limited discoverability on distributor platforms may put us at a competitive disadvantage. If our distributors do not sign-up new subscribers to our services, we may lose subscribers, which could have a materially adverse effect on our business, financial condition and results of operations.
Starz’s inability to participate in the marketing of its services or limited discoverability on distributor platforms may put it at a competitive disadvantage. If Starz’s distributors do not sign-up new subscribers to Starz’s services, Starz may lose subscribers, which could have a material adverse effect on its business, financial condition, results of operations and cash flows.
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.
If Starz is not successful in maintaining existing or creating new relationships with these third parties, its ability to retain subscribers and grow its direct-to-consumer business could be adversely affected. Starz also currently offers the ability to stream its direct-to-consumer service through a host of internet-connected devices, including televisions, computers, and mobile devices.
In the event of a short-term power outage, we have installed uninterrupted power source equipment designed to protect our equipment. A long-term power outage, however, could disrupt our operations.
In the event of a short-term power outage, Starz has installed uninterrupted power source equipment designed to protect its equipment. A long-term power outage, however, could disrupt its operations.
The failure to renew affiliation agreements on as favorable terms, or the failure to negotiate new affiliation agreements at all, in each case covering a significant portion of households, could result in a discontinuation of carriage, or could otherwise impair our subscriber growth, revenue and earnings which could have a materially adverse effect on our business, financial condition and results of operations.
The failure to renew affiliation agreements on as favorable terms, or the failure to negotiate new affiliation agreements at all, could result in a discontinuation of carriage, or could otherwise impair Starz’s subscriber growth, revenue and earnings which could have a material adverse effect on its business, financial condition and results of operations.
We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.
Starz may not be able to affect any such alternative measures, if necessary, on commercially favorable terms or at all and, even if successful, those alternative actions may not allow Starz to meet its scheduled debt service obligations.
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.
Such restrictions also will not prevent Starz from incurring obligations that do not constitute indebtedness under such agreements, such as certain qualified receivables financings and programming notes. If new debt is added to Starz current debt levels, the related risks that Starz and its guarantors face, now or thereafter, could intensify.
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.
Accordingly, repayment of such indebtedness is dependent on the generation of cash flow by Starz’s subsidiaries and their ability to make such cash available to it, by dividend, debt repayment or otherwise.
Equipment failure, employee misconduct or third-party interference could also disrupt the facility’s services. STARZ has arrangements at a separate third-party back-up facility to uplink STARZ’s linear channels and services to STARZ’s satellites in the event STARZ is unable to do so from its primary facility.
Starz has arrangements at a separate third-party back-up facility to uplink Starz’s linear channels and services to its satellites in the event Starz is unable to do so from its primary facility.
In addition, our actual cash requirements in the future may be greater than expected. our cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt.
Its cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and Starz may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance its debt.
Internet and Other Media Operator Regulations. The adoption or modification of laws or regulations relating to the internet or other areas of our business could limit or otherwise adversely affect the manner in which we currently conduct our business. We anticipate that several jurisdictions may, over time, attempt to impose additional financial and regulatory obligations on us.
The adoption or modification of laws or regulations relating to the internet or other areas of Starz’s business could limit or otherwise adversely affect the manner in which it currently conducts its business. Starz anticipates that several jurisdictions may, over time, attempt to impose additional financial and regulatory obligations on it.
Our network’s success depends upon the availability of quality programming in a highly competitive marketplace, and we may be unable to secure or maintain such programming. STARZ’s success depends upon the availability of quality programming, particularly original programming and films, that is suitable for our target markets.
Starz’s success depends upon the availability of quality programming in a highly competitive marketplace, and it may be unable to secure or maintain such programming. Starz’s success depends upon the availability of quality video programming, particularly original television programming and films, which are suitable for its target markets.
In addition, if proposals were enacted that had the effect of limiting our ability as a Canadian company to take advantage of tax treaties with the U.S., we could incur additional tax expense and/or otherwise incur business detriment. Changes in, or interpretations of, tax rules and regulations, and changes in geographic operating results, may adversely affect our effective tax rates.
In addition, if proposals were enacted that had the effect of limiting Starz’s ability as a Canadian company to take advantage of tax treaties with the U.S., it could incur additional tax expense and/or otherwise incur business detriment. Unanticipated changes in its effective tax rates could affect its future results of operations.
Technology or non-practicing entities may assert their patents, seek royalties, or even enter into litigation seeking substantial damages based on allegations of patent infringement regardless of merit. We have and continue to defend vigorously against such allegations.
Technology or non-practicing entities may assert their patents, seek royalties, or even enter into litigation seeking substantial damages based on allegations of patent infringement regardless of merit. Starz has defended and will continue to defend vigorously against such allegations, which are typically not covered by insurance.
Termination or interruption of satellite transmissions may occur and could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
Termination or interruption of satellite transmissions may occur and could have a material adverse effect on Starz’s business, financial condition, results of operations and cash flows.
We cannot assure you that we will ultimately be successful in negotiating renewals of our programming rights agreements or in negotiating adequate substitute agreements.
Starz cannot assure you that it will ultimately be successful in negotiating renewals of its programming license agreements or in negotiating adequate substitute agreements.
In part as a result of these changes, over the past few years, the number of subscribers to traditional MVPDs in the United States has declined, placing additional cost pressure on the traditional MVPDs relationships with their programmers, including us.
In part as a result of these changes, over the past few years, the number of subscribers to traditional multichannel video programming distributors in the U.S. has declined, placing additional cost pressure on the traditional multichannel video programming distributor relationships with their programmers, including Starz.
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.
If Starz encounters licensing, technological, regulatory, business or other impediments to delivering its streaming content to its subscribers via these devices, Starz’s ability to retain subscribers and grow its direct-to-consumer business could be adversely affected. Starz is subject to payment processing risk.
Treasury regulations promulgated thereunder, as well as the treatment of expatriated companies under Section 7874 for income treaty purposes, could affect our status as a non-U.S. corporation for U.S. federal tax purposes or could result in the application of certain adverse U.S. federal income tax rules to STARZ and its U.S. affiliates (including the U.S. affiliates historically owned by us).
Treasury regulations promulgated thereunder, as well as the treatment of expatriated companies under Section 7874 for income treaty purposes, could affect our status as a non-U.S. corporation for U.S. federal tax purposes or could result in the application of certain adverse U.S. federal income tax rules. Any such changes could have prospective or retroactive application.
In addition, we depend on the availability of a number of actors, writers, directors, producers and others, who are employees of third-party production companies that create our original programming.
In addition, Starz depends on the availability of and its ability to agree to contractual terms to engage a number of actors, writers, directors, producers and others, who are employees of third-party production companies that create its original programming.
Despite STARZ’s efforts to secure transponder capacity with multi-year satellite transponder leases, there is a risk that when these leases expire, we may not be able to secure capacity on a transponder on the same or similar terms, if at all.
Despite Starz’s efforts to secure transponder capacity with multi-year satellite transponder agreements, there is a risk that when these agreements expire, Starz may not be able to secure capacity on a transponder on the same or similar terms, if at all. Starz relies upon the ability of consumers to access its direct-to-consumer service through the internet.
If authorities start taking increased enforcement action related to statutes governing perceived unfair deceptive acts and practices, we could suffer additional costs, complaints and/or regulatory investigations or fines. Several of these laws also have private rights of action.
In addition, many states have enacted laws regulating automatically renewing online subscription services, and this trend may continue. If authorities start taking increased enforcement action related to statutes governing perceived unfair deceptive acts and practices, Starz could suffer additional costs, complaints and/or regulatory investigations or fines. Several of these laws also have private rights of action.
Under current U.S. federal tax law, a corporation is generally considered for U.S. federal tax purposes to be a tax resident in the jurisdiction of its organization or incorporation. Because we are incorporated in Canada, we would generally be classified as a non-U.S. corporation (and, therefore, a non-U.S. tax resident) under these rules.
Because we are incorporated in Canada, we would generally be classified as a non-U.S. corporation (and, therefore, a non-U.S. tax resident) under these rules, and under current law, it is expected that we should not be treated as a U.S. corporation for U.S. federal tax purposes.
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.
Congress that, if ultimately enacted, could limit the availability of tax benefits or deductions that Starz expects to claim, override tax treaties upon which it expects to rely, or otherwise increase the taxes that the U.S. imposes on Starz’s operations.
In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operations and if not adequately controlled and managed could create negative consumer perceptions of our service.
In addition, from time to time, Starz encounters fraudulent use of payment methods, which could adversely affect its business, financial condition, results of operations and cash flows, and, if not adequately controlled and managed, could create negative consumer perceptions of its service.
In addition, non-U.S. shareholders of Lions Gate would be subject to U.S. withholding tax on the gross amount of any dividends paid by us to such shareholders (subject to an exemption or reduced rate available under an applicable tax treaty).
In addition, non-U.S. shareholders would be subject to U.S. withholding tax on the gross amount of any dividends paid by us to such shareholders (subject to an exemption or reduced rate available under an applicable tax treaty). The development and production of original programming requires substantial financial commitment, which can occasionally be offset by foreign, state or local tax incentives.
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.
While the agreements governing Starz’s corporate indebtedness limit the ability of Starz’s subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to Starz, these limitations are subject to qualifications and exceptions.
Litigation may also be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity.
In addition, litigation may be necessary to enforce Starz’s intellectual property rights, protect its trade secrets or determine the validity and scope of proprietary rights claimed by others.
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.
Starz’s ability to continue to attract and retain subscribers will depend in part on its ability to consistently provide compelling content choices, effectively market its services, as well as provide a quality user experience for its subscribers. Furthermore, its competitors’ relative service levels, content offerings, pricing and related features may adversely affect Starz’s ability to attract and retain subscribers.
Under the Communications Act of 1934 and the 1992 Cable Act, there are certain FCC regulations that govern the distribution of our services by traditional MVPDs, including cable, DBS and telco operators.
Under the Communications Act of 1934 and the 1992 Cable Act, there are certain Federal Communications Commission regulations that govern the distribution of Starz’s services by traditional multichannel video programming distributors, including cable, direct broadcast satellite and telco operators.
We may not be able to anticipate and react effectively to shifts in tastes and interests. A change in viewer preferences could cause STARZ’s programming to decline in popularity, which could adversely impact the terms of our affiliation agreements with distributors or jeopardize their renewal.
A change in viewer preferences could cause Starz’s programming to decline in popularity, which could adversely affect the terms of its affiliation agreements with distributors or jeopardize their renewal.
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.
In the event that Starz does not receive distributions from its subsidiaries, it may be unable to make required principal and interest payments on its indebtedness. Despite its current level of indebtedness, Starz and its subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to Starz’s financial condition described above .
Future downgrades could further adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets, and a significant downgrade could have an adverse commercial impact on our business.
Future downgrades could further adversely affect Starz’s cost of funds and related margins, liquidity, competitive position and access to capital markets, and a significant downgrade could have an adverse commercial impact on Starz’s business. In addition, Starz conducts a substantial portion of its operations through its subsidiaries, certain of which are not guarantors of Starz’s corporate indebtedness.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Factors in this Annual Report on Form 10-K, including “ Service disruptions or failures of the Company’s or the third parties’ on which we rely 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 .” Governance Our Board of Directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
Biggest changeRisk Factors in this Annual Report on Form 10-K, including “Protection of electronically stored data is costly and if Starz’s data is compromised in spite of this protection, it may incur additional costs, lost opportunities and damage to its reputation.” Governance Our Board of Directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
Depending on the environment, systems, and data, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example, incident detection and response processes, vulnerability management 42 Table of Contents policy, disaster recovery and business continuity plans, risk assessments, encryption of certain data, data segregation for certain data, network security and access controls, physical security controls, asset management, tracking and disposal, monitoring for certain systems, vendor risks management processes, employee training, penetration testing, employee training, cybersecurity insurance, and dedicated cybersecurity staff.
Depending on the environment, systems, and data, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example, incident detection and response processes, vulnerability management policy, disaster recovery and business continuity plans, risk assessments, encryption of certain data, data segregation for certain data, network security and access controls, physical security controls, asset management, tracking and disposal, monitoring for certain systems, vendor risks management processes, employee training, penetration testing, employee training, cybersecurity insurance, and dedicated cybersecurity staff.
Risk management and strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and employee and other personal data (“Information Systems and Data”).
Risk management and strategy We have implemented and maintain various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications 28 Table of Contents systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and employee and other personal data (“Information Systems and Data”).
Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including the CISO and CIO. Our CISO, CIO and other senior executives work with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified.
Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances. Our Executive Vice President, Technology and our General Counsel and other senior executives work with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified.
The Audit & Risk Committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our CIO and CISO.
The Audit & Risk Committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Executive Vice President, Technology and our General Counsel.
For example, the CISO works with management, including the Chief Information Officer (“CIO”), to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business and our senior management evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Audit & Risk Committee of the Board of Directors, which evaluates our overall enterprise risk.
For example, the information security team lead by our Executive Vice President, Technology works with management and the legal department, to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business and our senior management evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Audit & Risk Committee of the Board of Directors, which evaluates our overall enterprise risk.
The Company’s information security team, led by our Chief Information Security Officer (“CISO”), helps identify, assess and manage the Company’s cybersecurity threats and risks.
The Company’s information security team helps identify, assess and manage the Company’s cybersecurity threats and risks.
In addition, the Company’s incident response processes include reporting to the Audit & Risk Committee for certain cybersecurity incidents. The Audit & Risk Committee receives regular reports from our CIO concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.
In addition, the Company’s incident response processes include reporting to the Audit & Risk Committee for certain cybersecurity incidents. Our cybersecurity risk assessment and management processes provide for regular updates to the Audit & Risk Committee.
The Audit & Risk Committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
The Audit & Risk Committee receives reports from our Executive Vice President, Technology and our General Counsel concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them. The Audit & Risk Committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
Removed
Our CISO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Our CIO is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing certain security assessments and other security-related reports.
Added
Our cybersecurity incident response team has over 32 years combined information technology and cybersecurity experience, and includes individuals with Certified Information Systems Security Professional (CISSP), Cyber Threat Intelligence Certification, Global Information Assurance Certifications, and 29 Table of Contents other key information technology and cybersecurity certifications.
Added
Although we have not been the subject of any cybersecurity threats that have materially affected, or are reasonably likely to materially affect us to date, we have been and continue to be subject to cybersecurity risks in the normal course of our business, as discussed in Item 1A.
Added
Risk Factors, including in the risk factor entitled “Protection of electronically stored data is costly and if Starz’s data is compromised in spite of this protection, it may incur additional costs, lost opportunities and damage to its reputation.”

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 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).
Biggest changeITEM 2. PROPERTIES . Starz’s corporate office is located at 250 Howe Street, 20th Floor, Vancouver, BC V6C 3R8. Its principal executive office is located at 1647 Stewart Street, Santa Monica, CA, where Starz occupies 60,116 square feet (per a lease that expires in December 2028). In addition, Starz leases 100,119 square feet at 6363 S.
We believe that our current facilities are adequate to conduct our business operations for the foreseeable future. We believe that we will be able to renew these leases on similar terms upon expiration. If we cannot renew, we believe that we could find other suitable premises without any material adverse impact on our operations.
Starz believes that it will be able to renew these leases on similar terms upon expiration. If it cannot renew, Starz believes that it could find other suitable premises without any material adverse impact on its operations.
Removed
In 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).
Added
Fiddler’s Green Circle, Greenwood Village, CO (per a lease that expires in June 2034) and subleases approximately 18,000 square feet from Lionsgate Studios Corp. at 530 Fifth Avenue, New York, New York (per a lease that expires in August 2025).
Added
Following the expiration of the 530 Fifth Avenue lease, Starz will begin leasing approximately 20,269 square feet at 100 Park Ave, New York, NY 10017 (per a lease that expires May 2038). Starz believes that its current facilities are adequate to conduct its business operations for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the resolution of these matters cannot be predicted with certainty, we do not believe, based on current knowledge, that the outcome of any currently pending legal proceedings in which the Company is currently involved will have a material adverse effect on the Company's consolidated financial position, results of operations or cash flow.
Biggest changeWhile the resolution of these matters cannot be predicted with certainty, Starz does not believe, based on current knowledge, that the outcome of any currently pending legal proceedings in which Starz is currently involved will have a material adverse effect on Starz’s consolidated financial position, results of operations or cash flow.
ITEM 3. LEGAL PROCEEDINGS. From time to time, the Company is involved in certain claims and legal proceedings arising in the normal course of business.
ITEM 3. LEGAL PROCEEDINGS . From time to time, Starz is involved in certain claims and legal proceedings arising in the normal course of business.
Removed
For 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
Added
For additional information regarding certain legal proceedings in which Starz is involved, see “Risk Factors—Purported noteholders have instituted suit against Starz claiming that it breached the indenture governing certain 5.5% senior notes due 2029 by virtue of an amendment executed in connection with an exchange by certain noteholders for new notes.” ITEM 4. MINE SAFETY DISCLOSURES .
Added
Not Applicable. 30 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor 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.
Biggest changeThis summary does not apply to a Non-Canadian 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. 31 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 Canada Revenue Agency.
Taxation 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.
Taxation 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 our 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.
Dividends The amount of any future dividends, if any, that we pay to our shareholders is determined by our Board of Directors, at its discretion, and is dependent on a number of factors, including our financial position, results of operations, cash flows, capital requirements and restrictions under our credit agreements, and shall be in compliance with applicable law.
Dividends The timing, declaration, amount and payment of future dividends, if any, is determined by our Board of Directors, at its discretion, and is dependent on a number of factors, including our financial position, results of operations, cash flows, capital requirements and restrictions under our credit agreements.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information We have two (2) classes of common shares listed on the New York Stock Exchange ("NYSE").
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES .
We cannot guarantee the amount of dividends paid in the future, if any.
Moreover, if our Board of Directors determines to pay any dividends in the future, there can be no assurance that we will continue to pay such dividends or the amount of such dividends. We cannot guarantee the amount of dividends paid in the future, if any.
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.
Issuer Purchases of Equity Securities No common shares were purchased by us during the three months ended March 31, 2025. Unregistered Sales of Equity Securities None. ITEM 6. [Reserved]
Removed
Our Class A voting shares, no par value per share (the "Class A voting shares"), are listed on the NYSE under the symbol “LGF.A” and our Class B non-voting shares, no par value per share (the "Class B non-voting shares”), are listed on the NYSE under the symbol “LGF.B”.
Added
Market Information We have one (1) class of common shares of no par value per share listed on the Nasdaq Stock Market (“Nasdaq”) listed under the symbol “STRZ.” Holders As of June 16, 2025, there were approximately 293 shareholders of record of our common shares.
Removed
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.
Added
The foregoing number of record holders reflects only the registered holders of our common shares as listed on the books of our transfer agent. It does not include the number of beneficial owners who hold shares through banks, brokerage houses, or other institutions.
Removed
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.
Added
Each such institution is counted as a single record holder, regardless of the number of beneficial owners it represents.
Removed
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.
Added
Securities Authorized for Issuance Under Equity Compensation Plans As of May 6, 2025, the date of the Separation, 3,356,936 shares of Starz common stock were outstanding under the Company's equity compensation plans.
Removed
Issuer Purchases of Equity Securities On May 31, 2007, our Board of Directors authorized the repurchase of up to $50 million of our common shares. On each of May 29, 2008 and November 6, 2008, our Board of Directors authorized additional repurchases up to an additional $50 million of our common shares.
Removed
On December 17, 2013, our Board of Directors authorized the Company to increase its stock repurchase plan to $300 million and on February 2, 2016, our Board of Directors authorized the Company to further increase its stock repurchase plan to $468 million.
Removed
To date, approximately $288.1 million (or 16,608,796) of our common shares have been purchased, leaving approximately $179.9 million of authorized potential purchases. The remaining $179.9 million of our common shares may be purchased from time to time at the Company’s discretion, including quantity, timing and price thereof, and will be subject to market conditions.
Removed
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.
Removed
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.
Removed
All values assume that $100 was invested on March 31, 2019 in our common shares and each applicable index and all dividends were reinvested.
Removed
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.
Removed
They shall not be deemed “soliciting materials” or to be “filed” with the SEC (other than as provided in Item 201), nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

Item 7. Management's Discussion & Analysis

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

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Biggest changeCash flows used in investing activities for the fiscal years ended March 31, 2024 and 2023 were as follows: Year Ended March 31, 2024 2023 (Amounts in millions) Investing Activities: Purchase of eOne, net of cash acquired (see Note 2) $ (331.1) $ — Proceeds from the sale of equity method and other investments 5.2 46.3 Investment in equity method investees and other (13.3) (17.5) Distributions from equity method investees and other 0.8 1.9 Increase in loans receivable (3.7) — Capital expenditures (34.7) (49.0) Net Cash Flows Used In Investing Activities $ (376.8) $ (18.3) Cash flows used in investing activities of $376.8 million for the fiscal year ended March 31, 2024 compared to cash flows used in investing activities of $18.3 million for the fiscal year ended March 31, 2023, primarily due to cash used for the purchase of eOne, net of cash acquired, in fiscal 2024 and lower proceeds from the sale of equity method and other investments due to the sale of a portion of our ownership interest in STARZPLAY Arabia in fiscal 2023, partially offset by lower cash used for capital expenditures and investment in equity method investees and other.
Biggest changeCash flows used in investing activities attributable to continuing operations for the fiscal years ended March 31, 2025, March 31, 2024 and March 31, 2023 were as follows: Year Ended March 31, 2025 vs 2024 2024 vs 2023 2025 2024 2023 Net Change Net Change (Amounts in millions) Net increase in loan receivable $ (81.6) $ — $ — $ (81.6) $ — Capital expenditures (17.6) (20.4) (34.3) 2.8 13.9 Net Cash Flows Used in Investing Activities - Continuing Operations $ (99.2) $ (20.4) $ (34.3) $ (78.8) $ 13.9 Cash flows used in investing activities attributable to continuing operations for the fiscal year ended March 31, 2025 primarily reflects cash provided to the LG Studios Business through the Intercompany Revolver and cash used for capital expenditures.
However, the assessment as to whether there will be sufficient taxable income in a jurisdiction to realize our net deferred tax assets in that jurisdiction is an estimate which could change in the future depending primarily upon the actual performance of our Company.
However, the assessment as to whether there will be sufficient taxable income in a jurisdiction to realize our net deferred tax assets in that jurisdiction is an estimate which could change in the future depending primarily upon the actual performance of the Company.
Determining whether an intangible asset is recoverable or impaired requires various estimates and assumptions, including whether events or circumstances indicate that the carrying amount of the asset may not be recoverable, determining estimates of future cash flows for the assets involved and, when applicable, the assumptions applied in determining fair value, including discount rates, growth rates, market risk premiums and other assumptions about the economic environment.
Determining whether an intangible asset is recoverable or impaired requires various estimates and assumptions, including whether events or circumstances indicate that the carrying amount of the asset or asset group may not be recoverable, determining estimates of future cash flows for the assets involved and, when applicable, the assumptions applied in determining fair value, including discount rates, growth rates, market risk premiums and other assumptions about the economic environment.
We have an exclusive multiyear post pay-one output licensing agreement with Universal for live-action films theatrically released in the U.S. starting January 1, 2022. The Universal agreement provides us with rights to exhibit these films immediately following their pay-one windows.
We also have an exclusive multiyear post pay-one output licensing agreement with Universal for live-action films theatrically released in the U.S. starting January 1, 2022. The Universal agreement provides us with rights to exhibit these films immediately following their pay-one windows.
The Starz Traditional Affiliate customer relationship intangible asset is amortized in the proportion that current period revenues bear to management’s estimate of future revenue over the remaining estimated useful life of the asset, which results in greater amortization in the earlier years of the estimated useful life of the asset than the latter years.
The Starz Traditional Affiliate customer relationship intangible asset is amortized in the proportion that current period revenue bear to management’s estimate of future revenue over the remaining estimated useful life of the asset, which results in greater amortization in the earlier years of the estimated useful life of the asset than the latter years.
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 .
During the fiscal years ended March 31, 2024 and March 31, 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: BMF - Black Mafia Family Season 2 January 6, 2023 Hightown Season 3 January 26, 2024 Party Down Season 3 February 24, 2023 BMF - Black Mafia Family Season 3 March 1, 2024 Power Book II: Ghost Season 3 March 17, 2023 48 Table of Contents Direct Operating and Distribution and Marketing Expenses .
The impairment test first requires a comparison of undiscounted future cash flows expected to be generated over the useful life of an asset to the carrying value of the asset. The impairment test is performed at the lowest level of cash flows associated with the asset.
The impairment test first requires a comparison of undiscounted future cash flows expected to be generated over the remaining useful life of an asset to the carrying value of the asset. The impairment test is performed at the lowest level of cash flows associated with the asset.
The Company monitors its finite-lived intangible assets and changes in the underlying circumstances each reporting period for indicators of possible impairments or a change in the useful life or method of amortization of our finite-lived intangible assets.
The Company monitors its finite-lived intangible assets and changes in the underlying circumstances each reporting period for indicators of possible impairments or a change in the useful life or method of amortization of the finite-lived intangible assets.
In addition, each of segment direct operating expense, distribution and marketing expense and general and administrative expense is reconciled to the respective line items presented in the GAAP-based statement of operations in the preceding section of the Management's Discussion and Analysis of Financial Condition and Results of Operations which discusses consolidated results of operations.
In addition, each of segment direct operating expense, distribution and marketing expense and general and administrative expense is reconciled to the respective line items presented in the GAAP-based statement of operations in the preceding section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations which discusses combined results of operations.
Income Taxes. We are subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We record deferred tax assets related to net operating loss carryforwards and certain temporary differences, net of applicable reserves in these jurisdictions.
W e are subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We record deferred tax assets related to net operating loss carryforwards and certain temporary differences, net of applicable reserves in these jurisdictions.
Such repurchases or exchanges or refinancings, if any, will depend on prevailing market conditions, our liquidity requirements, our assessment of opportunities to lower interest expense, contractual restrictions and other factors, and such repurchases or exchanges could result in a charge from the early extinguishment of debt. The amounts involved may be material. Anticipated Cash Requirements.
Such repurchases or exchanges or refinancings, if any, will depend on prevailing market conditions, our liquidity requirements, our assessment of opportunities to lower interest expense, contractual restrictions and other factors, and such repurchases or exchanges could result in a gain or loss from the early extinguishment of debt. The amounts involved may be material. Anticipated Cash Requirements.
We monitor our cash flow liquidity, availability, fixed charge coverage, capital base, film spending and leverage ratios with the long-term goal of maintaining our credit worthiness.
We monitor our cash flow liquidity, availability, fixed charge coverage, capital base, content spending and leverage ratios with the long-term goal of maintaining our credit worthiness.
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.
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 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.
The cost of licensed program rights for films and television programs (including original series) 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.
As disclosed in Note 1 to our consolidated financial statements, the preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
As disclosed in Note 1 to our audited combined financial statements, the preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates, judgments and assumptions that affect the amounts reported in the combined financial statements and accompanying notes.
Estimates of revenue generated but not yet reported to us by our distribution partners are made based on the estimated number of subscribers using historical trends and recent reporting. Media Networks fixed fee or minimum guarantee programming revenue is recognized over the contract term based on the continuous delivery of the content to the distributor.
Estimates of revenue generated but not yet reported to us by our distribution partners are made based on an estimated number of subscribers using historical trends and recent reporting. Other fixed fee or minimum guarantee programming revenue is recognized over the contract term based on the continuous delivery of the content to the distributor.
Service subscribers may impact revenue differently depending on specific distribution agreements we have with our distributors which may include fixed fees, rates per basic video household or a rate per STARZ subscriber. The table below sets forth, for the periods presented, subscriptions to our Media Networks and STARZPLAY Arabia services.
Service subscribers may impact revenue differently depending on specific distribution agreements we have with our distributors which may include a rate per STARZ subscriber, rates per basic video household or fixed fees. The table below sets forth, for the periods presented, subscriptions to our Starz Networks and International services.
We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments.
We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments. Finite-Lived Intangible Assets.
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.
The level of programming cost amortization and advertising and marketing costs and thus the gross contribution margin for Starz Networks 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 amount of our customer relationship asset related to these Traditional Affiliate relationships reflects the estimated fair value of these customer relationships determined in connection with the acquisition of Starz on December 8, 2016, net of amortization recorded since the date of the Starz acquisition.
The amount of the Starz Business's customer relationship asset related to these Traditional Affiliate relationships reflects the estimated fair value of these customer relationships determined in connection with Old Lionsgate's acquisition of the Starz Business on December 8, 2016, net of amortization recorded since the date of the Starz Business's acquisition.
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.
The decrease in Starz Networks direct operating expenses was due primarily to lower programming cost amortization of $27.9 million related to library content, $16.3 million related to theatrical releases under our programming output agreements, partially offset by an increase of $12.0 million related to our Starz Originals, and a benefit in the fiscal year ended March 31, 2023 of $10.0 million associated with the modification of a content licensing arrangement.
Media Networks revenue is also generated through the distribution of our SVOD service directly to consumer through the Starz App. The variable distribution fee arrangements represent sales or usage based royalties, which are recognized over the period of such sales or usage by our distributor, which is the same period that the content is provided to the distributor.
Revenue is also generated through the distribution of our subscription video on demand (“SVOD”) service directly to consumers through the Starz App. The variable distribution fee arrangements represent sales or usage-based royalties, which are recognized over the period of such sales or usage by our distributor, which is the same period that the content is provided to the distributor.
Starz Networks' revenue decreased $30.4 million primarily because of declines in revenue of $81.0 million from traditional linear services, which were offset by higher OTT revenue of $52.4 million resulting from a price increase initiated at the end of June 2023 and fully implemented during the quarter ended September 30, 2023, and growth in OTT subscribers of 0.34 million since March 31, 2023.
The decrease in Starz Networks revenue reflects declines in revenue of $81.5 million from traditional linear services, which were offset by higher OTT revenue of $52.9 million resulting from a price increase initiated at the end of June 2023 and fully implemented during the quarter ended September 30, 2023, and growth in OTT subscribers of 0.43 million since March 31, 2023.
If additional financing beyond our existing cash flows from operations and credit facilities cannot fund such transactions, there is no assurance that such financing will be available on terms acceptable to us.
Any such transaction could be financed through our cash flow from operations, credit facilities, equity or debt financing. If additional financing beyond our existing cash flows from operations and credit facilities cannot fund such transactions, there is no assurance that such financing will be available on terms acceptable to us.
Revenue from commissions are recognized as such services are provided. Media Networks revenues may be based on a variable fee (i.e., a fee based on number of subscribers who receive our networks or other subscriber based factors) or to a lesser extent, may be based on a monthly fixed fee or minimum guarantee, subject to nominal annual escalations.
Revenue may be based on a variable fee (i.e., a fee based on number of subscribers who receive our networks or other subscriber-based factors) or to a lesser extent, may be based on a monthly fixed fee or minimum guarantee, subject to nominal annual escalations.
The number of exhibitions is estimated based on the number of exhibitions allowed in the agreement (if specified) and the expected usage of the content. Participations and residuals are expensed in line with the amortization of production costs.
The number of exhibitions is estimated based on the number of exhibitions allowed in the agreement (if specified) and the expected usage of the content. Residuals are expensed in line with the amortization of production costs. The Company reviews factors impacting the amortization of the content assets on an ongoing basis.
We have incurred impairment charges from the inception of the plan through March 31, 2024 amounting to $743.8 million.
We have incurred impairment charges from the inception of the plan through March 31, 2025 amounting to $457.0 million.
For fiscal 2023 and fiscal 2024, due to changes in the industry related to the migration from linear to OTT and direct-to-consumer consumption, and continuing difficult macro and microeconomic conditions, we performed an impairment analysis of our amortizable intangible assets.
For the fiscal year ended March 31, 2024, due to changes in the industry related to the migration from linear to OTT and direct-to-consumer consumption, we performed an impairment analysis of the amortizable intangible assets.
The nature of our business is such that significant initial expenditures are required to produce, acquire, distribute and market films and television programs, while revenues from these films and television programs are earned over an extended period of time after their completion or acquisition.
The nature of our business is such that significant initial expenditures are required to acquire, and market our programming content, while revenue from our programming content are earned over an extended period of time after their acquisition.
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.
As of March 31, 2025 , we have a valuation allowan ce of $177.5 million against cer tain U.S. and foreign deferred tax assets that may not be realized on a more likely than not basis.
Our income tax benefit (provision) differs from the U.S. federal statutory income tax rate of 21% and is affected by many factors, including the overall level of income (loss) before taxes and its mix across the jurisdictions in which we conduct operations, changes in tax laws and regulations, changes in valuation allowances against our deferred tax assets, changes in unrecognized tax benefits, tax planning strategies available to us, and other discrete items.
Our income tax benefit differs from the U.S. federal statutory income tax rate of 21% and is affected by many factors, including the overall level of income (loss) before taxes and its mix across the jurisdictions in which we conduct operations, changes in tax laws and regulations, changes in valuation allowances against our deferred tax assets, changes in unrecognized tax benefits, tax planning strategies available to us, and other discrete items. 39 Table of Contents Recent Accounting Pronouncements See Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies , to our audited combined financial statements for a discussion of recent accounting guidance.
As we continue to evaluate the Media Networks business and its current restructuring plan in relation to the current micro and macroeconomic environment and the announced plan to separate the Company's Starz business (i.e., Media Networks segment) and Studio Business (i.e., Motion Picture and Television Production segments), including further strategic review of content performance and its strategy on a territory-by-territory basis, we may decide to expand our restructuring plan and exit additional territories or remove certain content off its platform in the future.
As we continue to evaluate the Company's current 54 Table of Contents restructuring plan in relation to the current micro and macroeconomic environment and the Separation, including further strategic review of content performance and its strategy on a territory-by-territory basis, we may decide to expand our restructuring plan and exit additional territories or remove certain content off the Starz platforms in the future.
Direct operating expenses include amortization of film and television production or acquisition costs, amortization of programming production or acquisition costs and programming related salaries, participation and residual expenses, provision for doubtful accounts, and foreign exchange gains and losses.
Direct operating expenses include programming cost amortization, programming related salaries, residual expenses, development costs, provision for doubtful accounts, and foreign exchange gains and losses.
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.
Payments to distributors for marketing support costs for which the Company receives a discrete benefit are recorded as distribution and marketing costs, and payments to distributors for which the Company receives no discrete benefit are recorded as a reduction of revenue. Income Taxes.
For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated fair value of each window which generally results in the majority of the cost allocated to the first window on newer releases.
Licensed programming rights may include rights to more than one exploitation window under the Company's output and library agreements. For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated fair value of each window which generally results in the majority of the cost allocated to the first window on newer releases.
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.
Additionally, circumstances related to inflation and rising interest rates 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. We may also dispose assets and use the net proceeds from such dispositions to fund operations or such acquisitions, or to repay debt.
As the Company continues to evaluate the Media Networks business and its current restructuring plan in relation to the current micro and macroeconomic environment and the announced plan to separate the Company's Starz business (i.e., Media Networks segment) and Studio Business (i.e., Motion Picture and Television Production segments), including further strategic review of content performance and its strategy on a territory-by-territory basis, the Company may decide to expand its restructuring plan and exit additional territories or remove certain content off its platform in the future.
As the Company continues to evaluate its current restructuring plan in relation to the current micro and macroeconomic environment and the Separation, including further strategic review of content and performance and its 35 Table of Contents strategy on a territory-by-territory basis, the Company may decide to expand its restructuring plan and exit additional territories or remove certain content off its platform in the future.
The impairment analysis requires a comparison of undiscounted future cash flows expected to be generated over the useful life of an asset to the carrying value of the asset. Based on our impairment analysis, the estimated undiscounted cash flows exceeded the carrying amount of the assets and therefore no impairment charge was required.
The impairment analysis requires a comparison of undiscounted future cash flows expected to be generated over the useful life of an asset to the carrying value of the asset.
Remaining Performance Obligations and Backlog Remaining performance obligations represent deferred revenue on the balance sheet plus fixed fee or minimum guarantee contracts where the revenue will be recognized and the cash received in the future (i.e., backlog).
For additional details of commitments and contingencies, see Note 15, Commitments and Contingencies , to our audited combined financial statements. 56 Table of Contents Remaining Performance Obligations and Backlog Remaining performance obligations represent deferred revenue on the balance sheet plus fixed fee or minimum guarantee contracts where the revenue will be recognized and the cash received in the future (i.e., backlog).
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.
Restructuring and other costs were as follows for the fiscal years ended March 31, 2025 and March 31, 2024 (see Note 13, Restructuring and Other , to our audited combined financial statements for further details): Year Ended March 31, Increase (Decrease) 2025 2024 Amount Percent (Amounts in millions) Restructuring and other: Content impairments (1) $ 156.4 $ 213.0 $ (56.6) (26.6) % Severance (2) Cash 2.9 5.4 (2.5) (46.3) % Accelerated vesting of equity awards 0.5 1.4 (0.9) n/a Total severance costs 3.4 6.8 (3.4) (50.0) % Transaction and other costs (3) 24.3 5.0 19.3 nm $ 184.1 $ 224.8 $ (40.7) (18.1) % _______________________ nm - Percentage not meaningful.
Marketing costs for Media Networks includes advertising, consumer marketing, distributor marketing support and other marketing costs. In addition, distribution and marketing costs includes our Media Networks segment operating costs for the direct-to-consumer service, transponder expenses and maintenance and repairs. General and administration expenses include salaries and other overhead.
Distribution and marketing expenses primarily include the costs of advertising, consumer marketing, distributor marketing support and other marketing costs, and operating costs for the direct-to-consumer service, transponder expenses and maintenance and repairs.
Corporate general and administrative expenses include certain corporate executive expense (such as salaries and wages for the office of the Chief Executive Officer, Chief Financial Officer, General Counsel and other corporate officers), investor relations costs, costs of maintaining corporate facilities, and other unallocated common administrative support functions, including corporate accounting, finance and financial reporting, internal and external audit and tax costs, corporate and other legal support functions, and certain information technology and human resources expense.
These functions and costs include, but are not limited to, salaries and wages for certain executives and other corporate officers related to executive oversight, investor relations costs, costs for the maintenance of corporate facilities, and other common administrative support functions, including corporate accounting, finance and financial reporting, audit and tax costs, corporate and other legal support functions, and certain information technology and human resources expense.
Under the current restructuring plan and ongoing strategic content review, the net future cash outlay is estimated to range from approximately $80 million to $90 million, which includes contractual commitments on content in territories being exited, and payments on the remaining amounts payable for content removed or that may be removed from its services.
Under the current restructuring plan and ongoing strategic content review, the net future cash outlay from continuing operations, for charges recorded through March 31, 2025 is estimated to range from approximately $43 million to $47 million for contractual commitments on content in territories exited and payments on the remaining amounts payable for content removed from our services, net of estimated recoveries.
This plan included a strategic review of content performance across Starz’s domestic and international platforms, resulting in certain programming being removed from those platforms and written down to fair value. During the fiscal year ended March 31, 2024, the Company continued executing its restructuring plan, including its evaluation of the programming on Starz's domestic and international platforms.
In the fiscal year ended March 31, 2023, in connection with its ongoing restructuring activities, the Starz Business performed a strategic review of content performance across Starz’s platforms, resulting in certain programming being removed from those platforms and written down to fair value.
We may from time to time seek to retire or purchase or refinance our outstanding debt through cash purchases, and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, refinancings, or otherwise.
We also use cash for debt service (i.e. principal and interest payments) requirements, capital expenditures, and acquisitions of or investment in businesses. We may from time to time seek to retire or purchase or refinance our outstanding debt through cash purchases,in open market purchases, privately negotiated transactions, refinancings, or otherwise.
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).
As a result of these restructuring initiatives in the fiscal years ended March 31, 2025 and 2024 we recorded content impairment charges of $156.4 million and $213.0 million, respectively. These amounts are included in restructuring and other in the combined statement of operations. See Note 13, Restructuring and Other , to our audited combined financial statements for further detail.
(3) Amounts in the fiscal years ended March 31, 2024 and 2023 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with legal and other matters. In fiscal 2024, these amounts include $49.2 million associated with the acquisition of additional interest in 3 Arts Entertainment.
(3) Transaction and related costs in the fiscal years ended March 31, 2024 and March 31, 2023 reflect transaction, integration and legal costs incurred associated with the Separation, certain strategic transactions, restructuring activities and legal matters. In the fiscal year ended March 31, 2023, these amounts include a benefit of $11.0 million for the settlement of a legal matter.
(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.
(2) Programming related obligations commitments include distribution and marketing commitments and program rights commitments not reflected on our combined balance sheets as they did not then meet the criteria for recognition. See Note 15, Commitments and Contingencies , to our audited combined financial statements for further information. (3) Includes cash interest payments on our corporate debt and programming related obligations.
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+.
Components of Results of Operations Revenue We earn our revenue from the distribution of branded premium subscription video services through OTT streaming platforms and distributors, on a direct-to-consumer basis through the Starz App and through MVPDs, including cable operators, satellite television providers and telecommunications companies.
Direct operating and distribution and marketing expenses primarily represent programming cost amortization and advertising and marketing costs, respectively.
Direct operating expenses primarily represent programming cost amortization, programming related salaries, residual expenses and development. Distribution and marketing expenses primarily includes advertising and marketing costs and operating costs for the distribution of the services.
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.
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 (1) $ 19.7 $ 23.4 Restructuring and other (2) 1.4 — Direct operating expense 2.7 1.5 Distribution and marketing expense 0.8 0.8 Total share-based compensation expense $ 24.6 $ 25.7 _______________________ (1) Includes share-based compensation expense related to the allocation of Old Lionsgate corporate and shared employee share-based compensation expenses of $5.6 million and $9.7 million in the fiscal years ended March 31, 2024 and March 31, 2023, respectively.
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.
Cash flows provided by (used in) operating activities attributable to continuing operations for the fiscal years ended March 31, 2025, 2024 and 2023 were as follows: Year Ended March 31, 2025 vs 2024 2024 vs 2023 2025 2024 2023 Net Change Net Change (Amounts in millions) Net Cash Flows Provided by (Used In) Operating Activities - Continuing Operations $ (39.4) $ 5.9 $ (184.2) $ (45.3) $ 190.1 The increase in cash used in operating activities from continuing operations in the fiscal year ended March 31, 2025, compared to the fiscal year ended March 31, 2024 is primarily due to higher cash used in operating assets and liabilities of $13.4 million.
Not all companies calculate segment profit or total segment profit in the same manner, and segment profit and total segment profit as defined by the Company may not be comparable to similarly titled measures presented by other companies due to differences in the methods of calculation and excluded items. 65 Table of Contents The following table reconciles the GAAP measure, operating income (loss), to the non-GAAP measure, total segment profit, for the fiscal years ended March 31, 2024 and 2023.
However, not all companies calculate this measure in the same 45 Table of Contents manner and the measure as presented may not be comparable to similarly titled measures presented by other companies due to differences in the methods of calculation and excluded items.
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.
However, we currently believe that cash flow from operations, cash on hand, borrowings under our $150 million senior secured revolving credit facility, monetization of trade accounts receivable and other financing obligations, and available production loans or programming notes will be adequate to meet known operational cash and debt service (i.e. principal and interest payments) requirements for the next twelve months and beyond, including the funding of programming content including amounts under our originals licensing agreements, our agreements with New Lionsgate, programming output and library agreements, and future equity method or other investment funding requirements, if any.
A film group or individual film or television program is evaluated for impairment when events or changes in circumstances indicate that the fair value of an individual film or film group is less than its unamortized cost.
The Company's estimates related to these factors requires considerable management judgement. 38 Table of Contents Impairment Assessment. A film group (as defined below) is evaluated for impairment when events or changes in circumstances indicate that the fair value of a film group is less than its unamortized cost.
The Company's film groups are generally aligned with the Company's networks and digital content offerings domestically (i.e., Starz Networks) and internationally by territory or groups of territories, where content assets are shared across the various territories. Content removed from the service and abandoned is written down to its fair value, if any, determined using a discounted cash flow approach.
The Company's film groups are generally aligned with the Company's networks and digital content offerings in North America (i.e., Starz Networks) and internationally by territory or groups of territories, where content assets are shared across the various territories.
General and administrative expenses in the fiscal year ended March 31, 2024 decreased from fiscal 2023, due to decreases of $11.5 million at LIONSGATE+, partially offset by increases of $8.5 million at Starz Networks.
Starz Networks general and administrative expenses in the fiscal year ended March 31, 2024 increased $8.9 million from the fiscal year ended March 31, 2023, driven by increased incentive compensation.
Subscribers through the Starz App are billed in advance of the start of their monthly or annual membership and revenues are recognized ratably over each applicable membership period.
Fixed fee or minimum guarantee programming revenue is recognized over the contract term based on the continuous delivery of the content to the distributor. Subscribers through the Starz App are billed in advance of the start of their monthly or multi-month membership period and revenue is recognized ratably over each applicable membership period.
Interest and other income of $22.1 million for the fiscal year ended March 31, 2024 increased as compared to interest and other income of $6.4 million for the fiscal year ended March 31, 2023, due to certain insurance recoveries in fiscal 2024. Other Expense.
Interest and other income of $4.9 million for the fiscal year ended March 31, 2025 increased by $1.4 million compared to interest and other income of $3.5 million for the fiscal year ended March 31, 2024, related to guarantee fees received in the fiscal year ended March 31, 2025. 44 Table of Contents Other Expense.
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.
Our income tax provision differs from the U.S. federal statutory rate multiplied by pre-tax income (loss) due to the income tax effects of goodwill and intangible asset impairments, state income taxes, and changes in the valuation allowance against our deferred tax assets.
Depreciation and Amortization Expense. Depreciation and amortization of $192.2 million for fiscal 2024 increased $11.9 million from $180.3 million in fiscal 2023 due to increased depreciation expense related to software in fiscal 2024 and increased amortization expense of $4.0 million associated with the change in estimated useful life of the Starz trade names, as described in Part II, Item 7.
Depreciation and amortization of $161.8 million for the fiscal year ended March 31, 2024 increased $6.1 million from $155.7 million in the fiscal year ended March 31, 2023 due to increased amortization expense of $4.0 million associated with the change in estimated useful life of the Starz trade names. 50 Table of Contents Restructuring and Other.
Our current financing strategy is to fund operations and to leverage investment in films and television programs in the short-term and long-term through our cash flow from operations, our revolving credit facility, production loans and programming notes, government incentive programs, the monetization of trade accounts receivable, our Production Tax Credit Facility, our IP Credit Facility, our Backlog Facility, and other obligations.
Our current financing strategy is to fund operations and to leverage investments in programming content in the short-term and long-term through our cash flow from operations, our programming notes, the monetization of trade accounts receivable, and other financing obligations. In addition, we may acquire businesses or assets, including individual films or libraries that are complementary to our business.
Total segment profit and Studio Business segment profit is considered an important measure of the Company’s performance because it reflects the aggregate profit contribution from the Company's segments, both in total and for the Studio Business and represents a measure, consistent with our segment profit, that eliminates amounts that, in management’s opinion, do not necessarily reflect the fundamental performance of the Company’s businesses, are infrequent in occurrence, and in some cases are non-cash expenses.
We believe this measure provides useful information to investors regarding our results of operations before non-operating items. Adjusted OIBDA is considered an important measure of the Company’s performance because this measure eliminates amounts that, in management’s opinion, do not necessarily reflect the fundamental performance of the Company’s businesses, are infrequent in occurrence, and in some cases are non-cash expenses.
In connection with this review, the Company cancelled certain ordered programming, and identified certain other programming with limited strategic purpose which was removed from the Starz platforms and abandoned by the Media Networks segment.
During the fiscal years ended March 31, 2025 and 2024, the Starz Business continued its evaluation of the programming on Starz's platforms and cancelled certain ordered programming, and identified certain other programming with limited strategic purpose which was removed from the Starz platforms and abandoned by the Company.
Recent Accounting Pronouncements See Note 1 to the accompanying consolidated financial statements for a discussion of recent accounting guidance. 58 Table of Contents RESULTS OF OPERATIONS Fiscal 2024 Compared to Fiscal 2023 Consolidated Results of Operations The following table sets forth our consolidated results of operations for the fiscal years ended March 31, 2024 and 2023.
RESULTS OF OPERATIONS Fiscal 2025 Compared to Fiscal 2024 Combined Results of Operations The following table sets forth our combined results of operations from continuing operations for the fiscal years ended March 31, 2025 and 2024 .
Programming cost amortization and advertising and marketing costs generally increase in periods where new original series premiere. In addition, the shutdown, and planned shutdown, of the LIONSGATE+ international service in the Exiting Territories will result in a decrease in expenses going forward.
Programming cost amortization and advertising and marketing costs generally increase in periods where new original series premiere. Direct Operating Expenses.
The following table sets forth our significant contractual and other obligations as of March 31, 2024 and the estimated timing of payment: Total Next 12 Months Beyond 12 Months (Amounts in millions) Future annual repayment of debt and other obligations recorded as of March 31, 2024 (on-balance sheet arrangements) Corporate debt (1) : Revolving credit facility (2) $ 575.0 $ — $ 575.0 Term Loan A (2) 399.3 41.1 358.2 Term Loan B 819.2 819.2 — 5.500% Senior Notes (3) 715.0 — 715.0 Film related obligations (4) 1,949.4 1,393.1 556.3 Content related payables (5) 233.4 190.0 43.4 Operating lease obligations (6) 438.5 53.4 385.1 5,129.8 2,496.8 2,633.0 Contractual commitments by expected repayment date (off-balance sheet arrangements) Film related obligations commitments (7) 619.6 452.8 166.8 Interest payments (8) 380.4 165.6 214.8 Other contractual obligations 538.6 157.7 380.9 1,538.6 776.1 762.5 Total future repayment of debt and other commitments under contractual obligations (9) $ 6,668.4 $ 3,272.9 $ 3,395.5 ___________________ (1) See Note 7 to our consolidated financial statements for further information on our corporate debt.
The following table sets forth our significant contractual and other obligations as of March 31, 2025 and the estimated timing of payment: Total Next 12 Months Beyond 12 Months (Amounts in millions) Future annual repayment of debt and other obligations recorded as of March 31, 2025 (on-balance sheet arrangements) (1) 5.5% Senior Notes $ 715.0 $ — $ 715.0 Programming related obligations 90.9 90.7 — Programming related payables 128.3 101.8 26.5 Operating lease obligations 55.5 9.8 45.6 989.7 202.3 787.1 Contractual commitments by expected repayment date (off-balance sheet arrangements) Programming related obligations commitments (2) 333.1 190.7 142.4 Interest payments (3) 158.8 39.3 119.5 Other contractual obligations 73.9 44.7 29.2 Due to New Lionsgate 131.1 120.6 10.5 696.9 395.3 301.6 Total future repayment of debt and other commitments under contractual obligations $ 1,686.6 $ 597.6 $ 1,088.7 ___________________ (1) See Note 6, Debt , to our audited combined financial statements for further information on our corporate debt and financing transactions following the completion of the Separation.
Beginning October 1, 2023, our finite-lived intangible assets also include the trade names previously accounted for as indefinite-lived intangible assets as discussed above. Identifiable intangible assets with finite lives are amortized to depreciation and amortization expense over their estimated useful lives, ranging from 5 to 16 years.
Identifiable intangible assets with finite lives are amortized to depreciation and amortization expense over their estimated useful lives, ranging from 10 to 14 years.
Liquidity and Capital Resources Sources of Cash Our liquidity and capital requirements in fiscal 2024 were provided principally through cash generated from operations, corporate debt, our film related obligations (as further discussed below), and the monetization of trade accounts receivable. As of March 31, 2024, we had cash and cash equivalents of $314.0 million.
Liquidity and Capital Resources Sources of Cash Our liquidity and capital resources for the fiscal year ended March 31, 2025 were provided principally through cash generated from operations, our programming related obligations (as further discussed below), the monetization of trade accounts receivable, parent net investments and following the Studio Separation, the Intercompany Revolver and the Old Lionsgate Revolving Credit Facility (each defined below).
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.
At March 31, 2025 and March 31, 2024, the carrying value of the Starz Business's finite-lived intangible assets was approximately $816.0 million and $966.1 million, respectively. The Starz Business's finite-lived intangible assets primarily relate to customer relationships associated with U.S.
Media Networks revenue increased $29.9 million and reflected increased revenue at LIONSGATE+ of $60.3 million, partially offset by a decrease of $30.4 million at Starz Networks.
Combined revenue decreased $30.1 million reflecting a decrease of $30.4 million at Starz Networks, partially offset by an increase of $0.3 million at International.
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.
Overall: This measure is a non-GAAP financial measure as defined in Regulation G promulgated by the SEC and is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP. We use this non-GAAP measure, among other measures, to evaluate the operating performance of our business.
Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in our goodwill impairment tests, and ultimately impact the estimated fair value of our reporting units may include the global economy; consumer consumption levels of our content; adverse macroeconomic conditions related to higher inflation and interest rates and currency rate fluctuations, and the impact on the global economy from wars, terrorism and multiple international conflicts, and future bank failures; volatility in the equity and debt markets which could result in higher weighted-average cost of capital; capital market transactions; the duration and potential impact of strikes of unions on our ability to produce, acquire and distribute our content; the commercial success of our television programming and motion pictures; our continual contractual relationships with our customers; and changes in consumer behavior.
Examples of events or circumstances that could result in changes to projected cash flows include the creation and consumer consumption of the Company's content; adverse macroeconomic conditions related to higher inflation and interest rates, and the impact on the global economy from the geopolitical environments including wars, terrorism and multiple international conflicts; volatility in the equity and debt markets which could result in higher weighted-average cost of capital and difficulty in funding the Company's content requirements; the Company's continual contractual relationships with the Company's customers; including the Company's affiliate agreements; and the Company's domestic subscriber growth rates across the Company's traditional and OTT platforms and changes in consumer behavior.
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.
The programming fees to be paid by us under these arrangements are based on the quantity and domestic theatrical exhibition receipts of qualifying films. We are unable to estimate the amounts to be paid under these agreements for films that have not yet been released in theaters, however, such amounts are expected to be significant.
See Note 17 to our consolidated financial statements for further information.
See Note 11, Share-Based Compensation , to our audited combined financial statements for further details.
Lionsgate Studios became a separate publicly traded company and its common shares commenced trading on Nasdaq under the symbol “LION” on May 14, 2024. The "Studio Business" consists of the businesses of Lionsgate's Motion Picture and Television Production segments, together with substantially all of Lionsgate's corporate general and administrative functions and costs.
In May 2024, Old Lionsgate consummated a series of transactions, by which the LG Studios Business became a separate publicly traded company, Legacy Lionsgate Studios (the “Studio Separation”). The LG Studios Business is substantially reflective of Old Lionsgate's Motion Pictures and Television Production segments together with a substantial portion of Old Lionsgate’s corporate general and administrative costs.
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.
Discussion of Operating, Investing, Financing Cash Flows Fiscal 2025 Compared to Fiscal 2024 and Fiscal 2024 Compared to Fiscal 2023 Cash and cash equivalents decreased by $19.2 million for the fiscal year ended March 31, 2025, decreased by $24.6 million for the fiscal year ended March 31, 2024 and decreased by $52.7 million for the fiscal year ended March 31, 2023.
Gain on extinguishment of debt of $19.9 million for fiscal 2024 represented a gain of $21.2 million associated with the repurchase of $85.0 million principal amount of 5.500% Senior Notes at a discount, partially offset by a loss of $1.3 million due to the write-off of issuance costs associated with the early prepayment of certain production loans.
The gain on extinguishment of debt of $21.2 million for fiscal 2024 was associated with the repurchase of $85.0 million principal amount of the 5.5% Senior Notes at a discount. See Note 6, Debt , to our audited combined financial statements for further details. Income Tax Benefit.
In fiscal 2024, direct operating expense included a benefit of $1.0 million, reflecting COVID related costs net of insurance recoveries of $1.2 million (fiscal 2023 - benefit of $11.6 million, net of insurance recoveries of $14.1 million).
Accordingly, the following amounts were allocated to Starz Networks in fiscal year ended March 31, 2024 to conform to the current period presentation: a benefit of $0.1 million, reflecting COVID related costs net of insurance recoveries of $0.2 million (fiscal year ended March 31, 2023 - benefit of $2.8 million, net of insurance recoveries of $5.6 million).
The decrease in Media Networks distribution and marketing expense is due to a decrease of $48.1 million at LIONSGATE+ primarily due to a decrease in distribution and advertising expenses from the Exiting Territories, partially offset by an increase of $2.7 million at Starz Networks.
The increase in Starz Networks direct operating expenses was due primarily to an increase of $123.1 million related to our programming output agreements, partially offset by lower programming cost amortization of $107.2 million related to our Starz Originals. Distribution and Marketing Expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−10 removed2 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, 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.
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, 2025: Year Ended March 31, Fair Value 2026 2027 2028 2029 2030 Thereafter Total March 31, 2025 (Amounts in millions) Variable Rates : Programming notes $ 90.7 $ — $ — $ — $ — $ — $ 90.7 $ 90.7 Average Interest Rate 6.51 % — — — — — Fixed Rates: 5.5% Senior Notes — — — — 715.0 — 715.0 623.7 Average Interest Rate — — — — 5.5 % — 60 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 $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.
A 1% increase in the level of interest rates would decrease the fair value of the 5.5% Senior Notes by approximately $21.2 million, and a 1% decrease in the level of interest rates would increase the fair value of the 5.5% Senior Notes by approximately $22.3 million.
We are exposed to credit loss in the event of nonperformance by the counterparty, which is limited to the cost of replacing the contracts, at current market rates. We do not require collateral or other security to support these contracts. See Note 18 to our consolidated financial statements for additional information on our financial instruments. Interest Rate Risk.
Were we to hold such contracts, we would be exposed to credit loss in the event of nonperformance by the counterparty, which is limited to the cost of replacing the contracts, at current market rates. We do not require collateral or other security to support these contracts. Interest Rate Risk.
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.
At March 31, 2025, our 5.5% Senior Notes had an outstanding carrying value of $699.9 million, and an estimated fair value of $623.7 million.
As part of our overall risk management program, we evaluate and manage our exposure to changes in interest rates and currency exchange risks on an ongoing basis. Hedges and derivative financial instruments will continue to be used in the future in order to manage our interest rate and currency exposure.
Our exposure to foreign currency exchange risk is related to transactions in currencies other than the U.S. Dollar. As part of our overall risk management program, we evaluate and manage our exposure to changes in interest rates and currency exchange risks on an ongoing basis.
Certain of our borrowings, primarily borrowings under our 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.
Certain of our borrowings, primarily borrowings under our credit facilities, are expected to be at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on this variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.
We have no intention of entering into financial derivative contracts, other than to hedge a specific financial risk. Currency Rate Risk. We enter into forward foreign exchange contracts to hedge our foreign currency exposures on future production expenses denominated in various foreign currencies. These contracts are entered into with major financial institutions as counterparties.
Hedges and derivative financial instruments will be used in the future to manage our interest rate exposure. We only enter financial derivative contracts- to hedge a specific financial risk. Currency Rate Risk. We may enter into forward foreign exchange contracts to hedge our foreign currency exposures on future programming production costs denominated in various foreign currencies.
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).
Our variable interest rate programming notes incur SOFR-based interest at a weighted average rate of approximately 6.51%. A quarter point increase in the interest rates on the outstanding principal amount of these notes at March 31, 2025 would result in $0.2 million increase in our annual net interest expense.
Removed
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.
Added
These contracts are entered into with major financial institutions as counterparties. As of March 31, 2025 and 2024, the Starz Business did not hold foreign exchange contracts.
Removed
The difference between the fixed rate to be paid and the variable rate received under the terms of the interest rate swap agreements will be recognized as interest expense for the related debt.
Removed
Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows.
Removed
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 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.
Removed
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.
Removed
(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.
Removed
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.
Removed
(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).
Removed
(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

Other STRZ 10-K year-over-year comparisons