Market Overview

For Lions Gate, the Games Are Only Beginning

"You think it is over, but the games have just begun." So said Tobin Bell as the Jigsaw Killer from the "Saw" franchise. Much the same could be said for Lions Gate Entertainment (NYSE: LGF), the studio that for a long time was most notable for bringing the original "Saw" and its six sequels to the big screen.

After the massive success of "The Hunger Games," which came out on March 23 of this year and has grossed more than $648 million worldwide, Lions Gate has become the most commercially successful independent film and television distribution company in North America. According to Box Office Mojo, Lions Gate is the number four movie studio in North America in terms of total gross and market share, behind Buena Vista, Sony/Columbia and Universal.

As if that were not enough, back in January Lions Gate announced that it was acquiring Summit Entertainment, producers of the extremely successful "Twilight Saga" film series, for $412.5 million, although the two companies had planned on merging since 2008. This also means that Lions Gate now owns Summit's entire back catalog of films, which includes not only "The Twilight Saga," but also such films as "Mr. & Mrs. Smith" (2005), "The Hurt Locker" (2009) and "RED" (2010).

But with great success comes greater expectations. The onus is now on Lions Gate to continue the success it had with "The Hunger Games."

Notable upcoming and planned films from Lions Gate and Summit include the following.

Step Up Revolution

The fourth installment of the "Step Up" series of dance films is set for release July 27. This is also the first film in the series to be produced and distributed by Summit Entertainment alone, whereas the previous three were co-produced by Summit and Touchstone Pictures, and distributed by Walt Disney Studios Motion Pictures. The previous three "Step Up" films were all fairly successful, all earning a worldwide gross between $100 million and $150 million, compared to their relatively low budgets of $30 million or less. But strangely, each subsequent film has made less of its money in the United States and Canada and more of it in other territories, compared to the previous entries.

The Expendables 2

The original "The Expendables," which came out in August 2010, was quite successful, grossing over $274 million worldwide on an $80 million budget, and it was Lions Gate's most successful film in terms of worldwide gross until the release of "The Hunger Games" this year. Therefore, expectations are high for the sequel, set to be released on August 17. Veteran action director Simon West—whose credits include "Con Air" (1997), "Lara Croft: Tomb Raider" (2001), and "The Mechanic" (2011)—is taking the helm. Most of the ensemble cast from the first film are back, including Sylvester Stallone, Jason Statham, Jet Li, Dolph Lundgren, Terry Crews and Randy Couture, while Bruce Willis and Arnold Schwarzenegger will return in larger roles than the brief cameos they had in the original movie. New additions to the cast include Liam Hemsworth of "The Hunger Games," Chinese actress Yu Nan and action movie legends Chuck Norris and Jean-Claude Van Damme.

The Twilight Saga: Breaking Dawn: Part 2

The fifth and final chapter of the "Twilight" film series, due for release on November 16, is sure to be a big moneymaker for Lions Gate and Summit. The two installments of "Breaking Dawn" are directed by Bill Condon, whose past films include "Gods and Monsters" (1998), "Kinsey" (2004), and "Dreamgirls" (2006). Like the previous entries, the film stars Kristen Stewart, Robert Pattinson, Taylor Lautner and an extensive supporting cast. And according to recent comments from Lions Gate CEO Jon Feltheimer, the company sees "ongoing value" in the multibillion dollar franchise and likely will continue it in some way. A source within Lions Gate suggests that "Twilight" might be continued on television rather than in movies.

Last Stand

This upcoming action film, set to be released on January 18, 2013, is sure to draw some attention because it is Arnold Schwarzenegger's first starring role since 2003's "Terminator 3: Rise of the Machines." Schwarzenegger plays the sheriff of a U.S. border town who becomes involved in the efforts by the FBI to stop a notorious drug baron and his gang from escaping across the border into Mexico. Besides Schwarzenegger, the cast includes Rodrigo Santoro, Zach Gilford, Forest Whitaker, Genesis Rodriguez, Johnny Knoxville, Jaimie Alexander, Luis Guzman, Peter Stormare and Harry Dean Stanton. The film is also the English-language debut of South Korean director Kim Ji-woon, whose credits in his native country include "A Tale of Two Sisters" (2003), "The Good, the Bad, the Weird" (2008), and "I Saw the Devil" (2010).

Ender's Game

Due out November 1, 2013, this adaptation of Orson Scott Card's 1985 science-fiction novel has been in development for more than a decade. "Ender's Game" is written and directed by South African filmmaker Gavin Hood, who previously directed "Tsotsi" (2005), "Rendition" (2007) and "X-Men Origins: Wolverine" (2009). The film's cast includes Asa Butterfield, Abigail Breslin, Hailee Steinfield, Nonso Anozie, Viola Davis, Ben Kingsley and Harrison Ford. The story centers on Andrew "Ender" Wiggin, one of a group of preteen children selected by an international military group and trained for battle against an invasion of Earth by a race of insectoid aliens known as the Formics. Also, Orson Scott Card has written multiple sequels to his novel, so "Ender's Game" could easily become a franchise if the first film is successful.

The Hunger Games: Catching Fire

Due for release November 22, 2013, Lions Gate began development on the second entry in "The Hunger Games" series before the first film was even released. Replacing Gary Ross in the director's chair is Francis Lawrence, whose previous credits include "Constantine" (2005), "I Am Legend" (2007) and "Water for Elephants" (2011). It was also confirmed before the first film's release that Jennifer Lawrence, Josh Hutcherson and Liam Hemsworth have all signed on for the entire "Hunger Games" film franchise. Writers working on "Catching Fire" include Simon Beaufoy, whose credits include "Slumdog Millionaire" (2008) and "127 Hours" (2010), and Michael Arndt, who wrote "Little Miss Sunshine" (2006) and "Toy Story 3" (2010). It also has been reported that the film will feature sequences filmed in the IMAX format.

The Hunger Games: Mockingjay

The third and final installment of "The Hunger Games" is expected to hit theaters sometime in 2014. Back in November 2011, Woody Harrelson, who plays Haymitch Abernathy in the film, revealed that he has signed on for four films, despite there being only three books. This has led to speculation that "The Hunger Games" will follow the example of "Harry Potter" and "The Twilight Saga" by splitting its final entry into two movies.

The success of "The Hunger Games" has raised the profile of Lions Gate and catapulted the studio onto a larger plain. The only question now is whether the company can maintain that hot streak and leverage its success into bigger and better things.

Posted-In: Lions Gate Lions Gate Entertainment Summit Entertainment The Hunger Games The Twilight SagaMedia Trading Ideas Best of Benzinga

 

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