Lionsgate Looks to the Financial Future of the ‘Games’
We all have heard that The Hunger Games performed extremely well at the box office, starting off with high midnight premiere sales on March 23rd and resulting in four weekends in a row in the No. 1 spot. In addition, looking at the millions that The Hunger Games has earned domestically and internationally so far, it’s not hard to tell that Lionsgate struck gold with Katniss and the rest of Panem. However, the numbers game is a lot different in the financial world, as Variety reports that Lionsgate has recently commented to investors that “profits from The Hunger Games have just started to flow.” This is in response to an earnings report that fell short of what was expected.
In a conference call with analysts on Thursday morning, CEO Jon Feltheimer projected that 90% of earnings from “The Hunger Games” have not yet shown up on the studio’s bottom line. His declaration comes on the heels of Wednesday’s earnings report that fell short of expectations, elevated partly by the box office performance of “Hunger Games.”
This bit of doubt has opened up discussion on the financial security of Lionsgate, especially considering the acquisition of Summit earlier this year. However, Feltheimer said that “$900 million will be generated over the next three years by Lionsgate operations,” specifically referring to projects such as The Hunger Games and Twilight franchises, in addition to a couple of TV series.
“With this level of profitability, we remain confident the Summit term loan will be paid down on schedule and our corporate debt at the Lionsgate level will be significantly reduced,” he said during the call.
So what does this all mean for the next Hunger Games movie? According to Feltheimer, the future is looking bright for The Hunger Games: Catching Fire.
Feltheimer said production will begin in September on “The Hunger Games: Catching Fire,” the second film in the franchise based on author Suzanne Collins’ trilogy. He noted that Lionsgate racked up $170 million in international sales at Cannes, where it began selling foreign markets for “Catching Fire,” which will open on Nov. 22, 2013.
Patrick Wachsberger, the co-chair of Lionsgate Motion Picture Group, told analysts that “Catching Fire” had done “extremely well” in Cannes. “We got the best deals,” he added.
The former Summit chief also predicted “Catching Fire” will reach $400 million in foreign B.O., based partly on the performance of the second “Twilight,” which outgrossed the first in foreign markets by 50% (the first grossed $192 million overseas and the second took in $296 million).
For the rest of the article, head on over to Variety. What do you think about the future of Lionsgate and The Hunger Games franchise? Let us know in the comments below!
Source: Variety
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3 comments
Katrina
on said:
I do hope they splash out a little more on the big scenes and the Arena (which will need lots of special effects and things) as THG itself was on a very tight budget for a movie that did so well. All the same they pulled it off quite well on a tight budget, so…what will they be able to do on a bigger one?
Mica
on said:
I think it will be 10 times better!
I cant wait, really Im very anxious.. And I need to know about the new Cast Finnick, Johanna .. etc
Hana
on said:
Katrina, you’ll be happy about this tidbit from the Q&A on the conference call:
Rob Friedman who is co-head of the LG studio said in answer to a couple of analysts questions: “There will be a greater and more exciting production value [more money spent on special effects, sets, etc in Catching Fire as compared to HG] which is one of the reasons for the increase in production costs. As it relates to [the difficulties of filming scenes involving] water, the actual water scenes [in Catching Fire] do not involve vessels which generally are the ones that create the problems in production. The water that we are talking about in CATCHING FIRE is a much more controlled situation, so we are way on top of that.”
Lionsgate has also already secured over $100 million in advance contracts with foreign distributors for Catching Fire. This is the company’s favorite way of covering production costs and reducing risk.
So ‘bottom line’, you can definitely expect CF to make more of a splash
PS: The comment about the water in CF being a ‘more controlled situation’ suggests to me that much of the Arena set will be in a studio as opposed to on-location. Fits with the Atlanta rumors.
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