Lionsgate Shells Out $8.6 Million for Viacom-Led Entertainment Net
New Premium Net Set For Launch Next Fall
By Linda Moss -- Multichannel News, 11/10/2008 11:30:00 AM
So far, indie movie studio Lionsgate has invested $8.6 million in the new premium network and subscription video-on-demand service that it is launching next fall with Viacom’s Paramount Studios and Metro-Goldwyn-Mayer Studios, the company reported Monday.
Lionsgate issued the numbers in its fiscal second-quarter 10-Q filing. The company will hold its conference call with analysts Tuesday.
“Currently, the company has invested $8.6 million as of Sept. 30, 2008, which represents 28.57% or its proportionate share of investment in the joint venture,” Lionsgate said in its 10-Q. “The company has a mandatory commitment of $31.4 million increasing to $42.9 million if certain performance targets are achieved.”
Although the joint venture, know as Studio 3 Partners, initially described the new network as a subscription premium service, it has also pitched it to cable operators as a digital-basic channel, with a license fee in the range of $1 to $1.50.
Lionsgate does businesses with cable on a number of fronts, including as a production company that produces shows such as AMC’s Mad Men and Showtime’s Weeds. Lionsgate is also a partner in the online and on-demand service FearNet, along with Comcast and Sony Pictures Television.
“The company made capital contributions to FearNet of $5 million in October 2006, $2.6 million in July 2007, and $2.5 million in April 2008,” Lionsgate said in its 10-Q. “As of Sept. 30, 2008, the company has a remaining commitment for additional capital contributions totaling $3.2 million, of which $2.9 million was funded in October 2008 and the remaining $0.3 million is expected to be funded by March 31, 2009.”
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