Lions Gate Entertainment Corporation

Good afternoon and welcome to the Lionsgate third quarter fiscal 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists 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 a question, press star then two. Please note this event is being recorded. I'd like to turn the conference over to Neal A. Shaw, Head of Investor Relations. Please go ahead.

Good afternoon. Thank you for joining us for the Lionsgate Fiscal 2023 Third Quarter Conference Call. We'll begin with opening remarks from our CEO, John Feldheimer, 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 for stars, we have President and CEO Jeffrey Hirsch, CFO Scott McDonald, and President of Domestic Networks Allison Hoffman. 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 inversely 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. Good afternoon, everyone, and thank you for joining us. We just reported strong financial results and enter our fourth quarter with encouraging trends across all of our businesses. The domestic box office is rebounding and most importantly supporting a broader range of films just as our biggest slate in years returns to theaters. Our television series continue to earn renewals and move into later seasons where their contributions increase exponentially. With six scripted series renewed in the quarter, we now have a total of nine recent shows already renewed for at least their third seasons. We've reported record trailing 12-month library revenue of $845 million in the quarter from a broad mix of film and television properties. We continue to extend and renew our biggest properties, As you read on Tuesday, we're adapting six-time Oscar winner La La Land to the Broadway stage, shepherded by a world-class creative and musical team. Finally, though Starz had a softer domestic subscriber quarter, we've already returned to subscriber growth with the strong launch of BMF in the current quarter. Now let me drill down in each of our businesses, beginning with our motion picture group. The Gerard Butler action thriller Plane got this year's films laid off to a great start. It outperformed expectations at the domestic box office and in nearly every one of our international territories. And by pivoting to a pivot release date three weeks after its theatrical release, we're creating an outsized contributor that illustrates our ability to create bespoke business models, new and more efficient marketing approaches, and alternative distribution strategies. Next up is Jesus Revolution from I Can Only Imagine filmmaker John Irwin and Brent McCorkle. Early sales indicate a big win in the faith-based space. On March 24th, we release John Wick Chapter 4, starring Keanu Reeves, in the latest chapter of one of the world's biggest action franchises. If you've seen the trailer, you know why we're so excited. With John Wick 4 releasing in theaters in March and coming to stars this fall, the John Wick television event series The Continental, rolling out on Peacock and Amazon later in the year, the action spin-off Ballerina, starring Anna D'Armas, in production for release next year, and a AAA video game in the works, the John Wick franchise is set to drive outsized value across all of our businesses. In addition to John Wick, the slate includes new chapters of our Saw, Expendables, and Dirty Dancing franchises. And The Hunger Games' Ballad of Songbirds and Snakes arrives in theaters in time for the holiday season with a November 17th global rollout. We're looking forward to the releases of the original new properties on our slate. Are You There, God? It's Me, Margaret, the retelling of Judy Blume's classic novel, Crazy Rich Asians writer Adele Lim's fun, freewheeling and raunchy directorial debut, Joyride, premiering at South by Southwest, and Tin Story's The Blackening, a horror comedy in the vein of Scream slated for the Juneteenth holiday weekend. and we're heading into production on Michael, produced by Bohemian Rhapsody's Graham King, directed by Training Day's Antoine Fuqua, and starring 26-year-old Jafar Jackson, who will portray his uncle, Michael Jackson, in the never-before-told and in-depth portrayal of the complicated man who became the king of pop. Turning to television, we reported another strong quarter of series renewals, launches, and new series pickups. The hit comedy series Ghosts for CBS reached an all-time series high in viewership last week and has become the number one half-hour comedy on television. It has been renewed for a third season and is poised for a long and profitable run. The Eugenio Derbez comedy Acapulco has been picked up for a third season on Apple TV+, where our hit series Mythic Quest from Rob McElhaney has already been renewed for a fourth season, with a companion series Mere Mortals heading into production. Power Book 2 Ghosts, P-Valley, and BMF were all picked up by Starz for additional seasons during or immediately after the close of the quarter. We also continue to fill the pipeline with new series. The wildly inventive Paul T. Goldman made a splashy debut on Peacock. The critically acclaimed first project from our 1619 partnership with Nicole Hannah-Jones, Oprah Winfrey, and the New York Times, a six-part docuseries on Hulu, is a reminder that great content is not only extremely valuable, but can also make a thought-provoking contribution to the national conversation. The HBO True Crime limited series, Love and Death, from the Big Little Lies team of David E. Kelly and Nicole Kidman, will have its world premiere at South by Southwest next month. And Apple TV Plus recently ordered a half-hour comedy series starring, co-written, directed, and produced by Seth Rogen. Financially driven by three straight years of strong television slates, our TV segment profit is growing 50% this year, with similar growth expected next year. Importantly, these contributions are coming from every part of our television business. Lionsgate Television, with one of its most robust slates of premium scripted series ever. Three Arts, the number one talent management and production company, continuing its very strong performance. Pilgrim Media, a non-fiction leader with 21 shows on a dozen networks, and Debmar Mercury, a top distribution and syndication company that recently renewed two of its biggest syndication properties, the Sherry Shepard Daytime Talk Show and Fremantle-produced game show Family Feud for multiple years. The value of great intellectual property grows with every prequel, sequel, spinoff, remake, and adaptation. And in that regard, I'm pleased to announce this afternoon that Lionsgate Television will produce an expansion of one of Star's most celebrated and groundbreaking original series, Spartacus. Spartacus writer and creator Stephen S. DeKnight will return as showrunner and executive producer. Big, bold, and fiercely premium, Spartacus adds another great Starz franchise along the Powerverse, Outlander, P-Valley, and BMF franchises. Turning to Starz, the streaming world is transitioning to an environment for which we've been preparing. More rational content spend, a focus on profitability instead of chasing subscribers, and greater receptivity to bundling and packaging. The bundling of Paramount Plus and Showtime, the evolution of the HBO Max and Discovery Plus offerings, and the emergence of new retailers are indicative of a landscape that plays to our strengths as a complimentary pure play premium service with a focused content strategy and two valuable and scalable core demos that can sit on top of every platform and be part of every bundling and packaging conversation. In this regard, we will announce our first major domestic bundling agreement next week. Against this backdrop, we'll continue to prioritize three things. First, continuing to execute Star's focused content strategy. Star has returned to subscriber growth this quarter with the launch of BMF. With Season 3 of Power Book 2 Ghosts and the long-awaited revival of fan favorite Party Down, we expect our subscriber growth trajectory to continue this quarter. Looking ahead, we have confidence in a slate with over 80% returning series, strategically scheduled with 10 pulls every quarter, and combined with a lineup of fresh studio movies from its pay-one and pay-two theatrical output deals from Lionsgate and Universal, respectively. Second, reducing our exposure to linear headwinds as our transition to digital continues, with 73% of Star's subscribers and 64% of our revenue coming from digital in the quarter. And finally, continuing to take costs out of every part of Star's business, domestically and internationally, as we remain focused on our most important metric, profitability. In closing, our plan to separate Lionsgate and Starz by the end of September remains on track. Separation will give our two core businesses the opportunity to pursue strategic and financial paths that make sense for each of them and unlock greater value by operating as pure play entities. We are exploring a number of financial strategies to leave both companies with strong balance sheets at the time of separation. With our film and television studio businesses operating at full throttle and Starz establishing itself in the streaming ecosystem as a complementary bundling partner of choice, operating on a standalone basis will give both companies a chance to shine. Now I'll turn things over to Jimmy.