John Wick, Hunger Games Studio Takes A $50 Million Hit Due To COVID-19
Lionsgate quantifies how much monetary impact the global pandemic has had on the company's business.
The economic impact of the COVID-19 crisis on one major Hollywood studio is coming into focus. Lionsgate, which produces the John Wick and Hunger Games films, has reported a $50.5 million charge during the January-March quarter due to the global pandemic and the "related economic disruption."
The charge is made up of losses due to the costs of stopping the production of Lionsgate's numerous movie and TV productions, among other things.
Lionsgate CEO Jon Feltheimer said in a statement, "Our Lionsgate family has risen to the challenge of these unprecedented times with resilience, dedication, and collaboration."
Looking to the future, Feltheimer said Lionsgate continues to work closely with its development partners to plan restarting production and releasing movies in theatres again.
"The impact of the ongoing COVID-19 global pandemic and measures to prevent its spread, and the resulting unprecedented economic uncertainty, are affecting our business in a number of ways," Lionsgate said in its news release. "The full extent of the impact of the COVID-19 global pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict."
At the same time, Lionsgate mentioned that its Starz network enjoyed an increase in viewership "across all platforms" in the US and globally due to the fact that people are staying home. Lionsgate cautioned, however, that the spike in viewers might slow down in the future when governments change their rules about social-distancing.
Lionsgate mentioned that it adapted to the crisis by releasing some of its theatrical films on streaming platforms, working on post-production remotely, and continuing to developer shows with virtual writers' rooms. "These changes in the way we operate may be helpful to partially offset some of the negative impacts from the pandemic. However, the impact of these changes and the COVID-19 global pandemic are uncertain and cannot be predicted," Lionsgate said.
In regards to the $50.5 million charge, this includes $46 million from impairments related to the aforementioned issues and $4.2 million in marketing and distribution expenses related to movies and events that were canceled or postponed. The remaining $300,000 includes "restructuring and other costs" related to the transition to a work-from-home environment for its employees.
Some of the movies that Lionsgate delayed due to the pandemic include the Saw spin-off Spiral, from Chris Rock, and the mystery-thriller Antebellum starring Janelle Monae.
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