Investors in Lions Gate LGF have always been cognizant of the fact the
studio's bottom line has heavily relied on the success of "The Hunger Games" trilogy.
That was made even clearer on Thursday when following an earnings report that
missed expectations the stock dipped.
What's interesting is that for as much as "Hunger Games" helped the studio, its under-
performance is what led to the lower earnings report. Regardless, Lions Gate enters
2016 "Hunger Games"-less for the first time since it launched the series in 2012.
Analysts believe the series peaked following its second entry as viewers didn't respond
well to the decision to split the final film into two parts.
Without "Hunger Games," that leaves the "Divergent" films as its bread-and-butter
franchise, but the movies have never reached the same heights. As a result the studio
is more dependent on original fare to sell tickets while at the same time rumors continue
to swirl about a merger with premium channel Starz.
Lions Gate thus far in 2016 has released two films "Norm of the North" and "Dirty
Grandpa." While neither has set the box office ablaze, both have done respectable by
comparison to its price tags. The animated "Norm" is just shy of recouping its reported
$18 million production costs while adult comedy "Grandpa" has more than doubled its
reportedly small $11 million budget.
Friday Lions Gate will release its third film of the year, "The Choice." The latest
adaptation from romance author extraordinaire Nicholas Sparks, the movie opens the
same weekend as previous Sparks film "Dear John." While the studio would love the
same type of $30 million opening, a $9 million debut is more likely.
"Dear John" opened in 2010 and starred Channing Tatum and Amanda Seyfried, while
"The Choice" stars Benjamin Walker and Teresa Palmer. Neither Walker or Palmer has
anywhere the same momentum Tatum or Seyfried did at that point in their career.
Similarly, Sparks doesn't have the same draw he previously did as his films have
declined in earnings as well.
The point that shouldn't be overlooked here is that Lions Gate acquired the film for $10
million, so the risk to the studio and its investors is nil. Even without a A-lister in the
lead, the supporting cast of Maggie Grace, Alexandria Daddario, Tom Welling and Tom
Wilkinson still carry some promotional power to help boost revenue.
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