Lionsgate Tuesday lauded the performance and value of its Emmy-winning series Mad Men, but offered no update on talks to close a deal for a third season with its creator-writer Matthew Weiner.
Lionsgate co-chairman and CEO Jon Feltheimer talked briefly about Mad Men and a new premium channel being launched by his company, Viacom’s Paramount Pictures and Metro-Goldwyn-Mayer Studios during a fiscal second-quarter conference call.
“Although we’ve given it no net value on our balance sheet, Mad Men is a hit show that has already demonstrated its long-term worth,” Feltheimer told analysts. “It just finished its second season with its highest-rated episode yet, nearly doubling its previous year’s ratings. Weeds is moving toward a syndication launch next year, and Showtime has already picked it up for a fifth and sixth season.”
Both Mad Men and Weeds have generated “hundreds of thousands of digital downloads,” according to Feltheimer. During the quarter, Weeds generated DVD revenue of more than $6 million, with $5 million in DVD sales from Mad Men
But Wall Street analysts didn’t ask Lionsgate—and the indie studio didn’t volunteer—an update on the status of talks with Mad Men’s creator and showrunner, Emmy-winner Weiner. In October AMC announced that it had ordered a third season of Mad Men, but Lionsgate was then still trying to negotiate a new deal with Weiner.
Published reports later said that Weiner was seeking a $10 million contract, prompting Lionsgate to look for another showrunner for Mad Men, which has picked up Emmy and Peabody awards.
During the conference call, Feltheimer also said that a name will soon be announced for the new premium service that Lionsgate is a partner in, which is set to debut next October.
“We feel it’s imperative for all content providers to look for ways to control their destiny, their packaging, windowing, pricing, and programming their own product,” Feltheimer said.
According Lionsgate’s 10-Q, so far it has invested $8.6 million in the joint-venture network.
Lionsgate saw an 8% increase in revenue growth in the second quarter. It reported revenue of $380.7 million and EBITDA of negative $39.2 million for the second fiscal quarter, the period ended Sept. 30, compared to $351.7 million in revenue and EBITDA of negative $56.2 million for the prior year's second quarter.
Lionsgate saw a net loss of $48.1 million in the second quarter, compared to a net loss of $58 million, in the prior year. Despite the underperformance of three films in the quarter, the net loss narrowed in the quarter because theatrical marketing costs declined and home entertainment performed strongly.
Television-production revenue in the quarter was $68.5 million, a decline of 38% from $109.6 million in the prior year’s second quarter due to the timing of series deliveries, Lionsgate said. Primary contributors were deliveries of the Emmy Award-winning Mad Men Season 2for AMC and deliveries of Weeds Season 4for Showtime, and Fear Itselffor NBC, along with Debmar-Mercury's Tyler Perry's House of Paynefor TBS, Family Feudand South Park.
The television division remains on track to approach $250 million in revenue this year, with a target to double that in the next two to three years, Feltheimer said.
A round of layoffs last week weren’t due to the bad economy, but rather were tied to Lionsgate’s strategy of keeping costs in check, he added.
“We’re always trying to stay lean and mean,” Feltheimer said.