Lions Gate Entertainment Corporation

Good day and welcome to the Lionsgate first quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Neelay Shah. Please go ahead.

Neelay Shah Good afternoon. Thank you for joining us for the Lionsgate Fiscal 22 First Quarter Conference Call. We'll begin with opening remarks from our CEO, John Feldtheimer, followed by remarks from our CFO, Jimmy Barge. After their remarks, we'll open the call for questions. Also joining us on the call today are Vice Chairman Michael Burns, COO Brian Goldsmith, Chairman of the TV Group Kevin Beggs, and Chairman of the Motion Picture Group Joe Drake. And from STARS, we have President and CEO Jeffrey Hirsch, CFO Scott McDonald, President of Domestic Networks Allison Hoffman, and President of International Network Superna Kalei. the matters discussed on this call include forward-looking statements including those regarding the performance of future fiscal years such statements are subject to a number of risks and uncertainties actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors. This includes the risk factors set forth in Lionsgate's most recent annual report on Form 10-K, as amended in our most recent quarterly report on Form 10-Q filed with the SEC. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. I'll now turn the call over to John.

Thank you, Nealey, and good afternoon, everyone. Thank you for joining us. I'd like to begin with a few highlights from a strong financial quarter and then drill down in each of our businesses. We acquired the Spyglass Media Group Library while investing in Spyglass's Go Forward business and entering into a first-look television deal between Spyglass and Lionsgate Television. In the past six months, We've actually acquired three libraries with a total of nearly 400 titles and more than $2.5 billion of underlying domestic box office as we continue to grow our stockpile of valuable premium content. We announced the theatrical output agreement with Universal, giving Starz an exclusive 18-month post-pay-one window for Universal's live-action theatrical titles. Coupled with the Lionsgate Pay One theatrical output agreement announced with Starz last quarter, the Universal deal completes our strategy for establishing a strong and reliable pipeline of first-run features for Starz. Our television group is taking advantage of unprecedented demand by producing a record 34 scripted series this year, 15 of them for Starz. while maintaining our leadership as a top independent third-party supplier of premium scripted content. We're coming off one of our strongest years with 13 new series orders, all seven of our pilots picked up to series, and all of last year's freshman series renewed for their second season. In our motion picture business, we continue to assemble a strong and diversified film slate for theaters, streamers, multi-platform distribution, and stars. And despite the pandemic, we've set up a total of 26 films in the past 12 months for delivery in fiscal 23 and fiscal 24. And as we continue to execute our business plan, we're also executing our strong commitment to greater diversity, equity, and inclusiveness in our workforce, talent relationships, and content. Turning to our individual businesses, it was a strong financial quarter for Starz, but like the rest of the industry, we were impacted by a reduction in at-home viewership, and importantly, a light content quarter due to COVID-driven production delays. We continued to grow our base of international subscribers in the quarter, but domestic subscribers declined, a temporary drop that we have already reversed since the end of the quarter. In fact, two weeks after the quarter ended, PowerBook 3 Raising Canaan debuted to the second biggest Starz original series premiere ever, driving over 800,000 global subscriber gross ads in the first week alone and an 80% spike in viewership on the app. As a result, we are again growing our domestic over-the-top subscriber base, which is already back to the March quarter's record levels. And with our biggest and strongest Starz original series slate ever this year, with 12 scripted series compared to seven last year, and a building cadence of five tentpole series over the next three quarters, we continue to expect Starz global subscriber growth this year to outpace subscriber growth last year. Our confidence is buttressed by a very strong slate that, following Raising Kanan, includes wrestling drama Heels, starring Stephen Amell and Alexander Ludwig, getting great early reviews, the second season of the hit series Power Book 2 Ghost, the sixth season, a fan-favorite Outlander, Curtis 50 Cent Jackson's crime family drama BMF, the horror comedy Shining Veil, starring Courtney Cox, and the debut of Power Book 4 Force. These will be followed next season by high-end properties such as the Watergate drama Gaslit, starring Julia Roberts and Sean Penn, the John Wick prequel The Continental, and The Serpent Queen, based on the dark legend of Catherine de' Medici. Internationally, subscriber growth continued, but was slowed by a light content quarter as well as the global reopening. Here again, we've seen a significant subscriber uptick with the international launch of Raising Canaan, which, along with Ghost, Run the World, and The Girlfriend Experience, proves that great programming for our core audiences in the United States attracts a global audience as well. Combined with Lionsgate feature films and library titles that are driving our theatrical content offerings, and best-in-class third-party acquisitions of the great Gangs of London and the international premiere of Dr. Death later this quarter, our best of global SVOD programming continues to set us apart as a home for original, adult, fiercely premium content complementary to every platform and a compelling value proposition for every bundle. Turning to television, We continue to execute our strategy, supplying stars with a bumper crop of premium scripted series while delivering high-end programming to an expanding array of new buyers in the quarter. Home Economics debuted on ABC in April with the strongest live plus three retention of any new comedy this season. The new comedy Ghosts debuts on CBS in the fall, and Welcome to Flatch premieres on Fox mid-season. The growth of the nearly $10 billion Avod market has created opportunities for us to license existing television series with Avod revenues up 104% from last year, to sell original new television series, an area where we've always been a first mover, and to extend the revenue food chain for shows entering syndication. In fact, Avod accounted for nearly two-thirds of our recent syndication sales to the hit comedy Weeds. With a diverse portfolio of television businesses that includes our collaboration with Three Arts, one of the world's foremost talent management and production companies, a partnership that has already generated three series orders including the Apple hit Mythic Quest, BBC Studios with two series picked up by the networks, Pilgrim Media Group with more than 20 unscripted series for leading platform partners, Debmar Mercury, home to the Evergreen Property's Wendy Williams and Family Feud, with Nick Cannon launching in the fall, and a roster of world-class production partnerships. The growth of our television slate is driven by our A-list talent relationships and future-proofed against headwinds in any one part of the business. Despite the challenge of making films during a pandemic, we continued to fill our pipeline during the quarter, completing production on Borderlands, starring Cate Blanchett, Kevin Hart, Jamie Lee Curtis, and Jack Black. The Kelly Fremont Craig-directed adaptation of the Judy Blume classic, Are You There, God? It's Me, Margaret, produced by Academy Award winner James L. Brooks. White Bird, A Wonder Story, the follow-up to our breakout hit Wonder. the faith-based American underdog The Kurt Warner Story, Shotgun Wedding starring Jennifer Lopez, and Roland Emmerich's sci-fi epic Moonfall. And we couldn't be more excited about returning to the set with the incomparable Keanu Reeves as we began shooting John Wick Chapter 4 in June. We also have three big brands that continue to move towards production. The Hunger Games prequel, The Ballad of Songbirds and Snakes, the nostalgic reimagining of the classic Dirty Dancing, and Monopoly, based on the iconic Hasbro game, rounding out a strong and diverse slate that can navigate the twists and turns of today's motion picture landscape by appealing to every platform. Last month, we announced an agreement to anchor the entertainment vertical for the NFT platform Autograph, bringing The Hunger Games, Twilight, John Wick, Mad Men and other top properties into the world of digital collectibles. It's the latest in a series of franchise extensions that provides us with a high margin annuity from branded theme parks, exhibitions and escape rooms, live to tape global concert tours and adaptations of iconic Lionsgate film and television properties headed for the Broadway stage. In closing, if the media consolidation of the past year has taught us anything, it's that the global appetite for content is greater than ever. And to paraphrase Keanu Reeves in John Wick 3, we have that content, lots of content, in our world-class library, our deep film and television pipelines, and throughout our global streaming platform at Starz. We live right in the sweet spot of global consumer demand, bold, original, high-end, premium scripted television and film. And with our talented and entrepreneurial employees working across every part of our company every single day to identify ways to create, own, and monetize this content, we're well-positioned to create outsized value for our partners, consumers, and shareholders. Thank you. Now I'll turn things over to Jimmy.