On this afternoon’s Lionsgate Q1 2026 earnings call, CEO Jon Feltheimer was asked about the elephant in the room, and that was whether there was an increased sense of urgency now for an M&A opportunity now that Lionsgate and Starz have split.
More to the point, there was buzz last month that Legendary and others were kicking the tires at Lionsgate.
While Feltheimer didn’t per se address the Legendary noise, he did say, “We understand our earnings power, but also understand the scale that we have, that I think doing some kind of strategic transaction down the road is something that’s probably gonna happen, I think there’s a lot of ways that can happen, and we’re pretty focused on it.”
Expounding on the split-up between Lionsgate and Starz, which now trade separately, Feltheimer said, “I would say, the whole idea of the separation was to create optionality for both sides, I think that’s exactly what’s happening.”
“The Starz folks are looking at their various potential paths, especially in this really disruptive and interesting ecosystem we’re dealing with, and obviously so are we. So, the rationale was absolutely right.”
“I would say in the world we’re in, we’re the only major with the scale that’s significantly less than the other majors. And I would say that does speak to the potential for us to look to figure out a way to take advantage of our earnings power but without some of the overhead that we have.”
Note in the weeks following the Legendary-Lionsgate rumors, news about a merger have cooled per sources: If there’s any deal between the two studios, it’s in a possible co-production deal. Also, it would be beneficial for Lionsgate if their share price was significantly higher than what they ended their day at, that being $5.91 (+0.04%)
Lionsgate licenses out international rights on their features to offload risk. That’s given some buyers the perception that the studio isn’t in full control of their library like a rival major studio. Today, the studio tooted a horn that their library cleared close to a $1 billion in revenue over the trailing 12-month period thanks to the theatrical release of Ballerina stirring up interest in the John Wick franchise. How much of that library does Lionsgate own?
Answered Feltheimer, “What seems to be a misconception, we own most of our library. We’ve been producing for 25 years. We put $20 billion into production, and really pretty much own all of our library. At various times, we like every studio, license out our product, but at the end of the day even if you look at the library results for this quarter, 29 out of the top 30 titles are titles that we own.”
Added Jim Packer, President of Worldwide TV Distribution, “Overall, if you look at the big picture, I don’t think we beat at a billion dollars, or close to a billion dollars of trailing 12 if we didn’t own a significant portion. If you break it down, on the TV side we control and distribute 20,000 episodes of television and we control those globally. On the film side, we release theatrically, direct or directed in the U.S., Canada, U.K., LATAM and India, which is a majority of the global box office ex-China, and in those territories, we control and distribute all downstream ancillary rights, so those are a significant portion of our revenue.”
“For the rest of world outside, U.S. and Canada, we do deploy a risk mitigation model, where we license, we don’t sell, we license our rights, various term lengths. We do get overages from those from our third-party partners and given as Jon said, since the company has been around since 2000, many of those rights, a very significant portion are into our machine and being licensed by our teams,” added Packer.
“Some other notes on rest world, as Jon mentioned, we own ’em all, but most important, but also through self-distribution of rights and reversion, this is a key stat: 75% of the top 20 franchises we control in our licensing now or will so in the next few years. Those are the drivers of our library, and we’re in really good shape with that,” the exec added.
Emphasized Feltheimer, “The bottom line is we own most of our library in perpetuity in both film and television, period.”
