With all the talk about CBS and Viacom once again merging, conversation in such circles has naturally turned to what will happen with Lionsgate, which is pretty much the biggest little company out there, and thus ripe for the plucking by a larger conglomerate with certain needs. In the grand scheme of things, as mass media consolidation continues with the largest and most successful operations in entertainment — like, say, Disney buying 20th Century Fox, just as a for instance — a smaller independent player like Lionsgate is going to a very appetizing opportunity for the right buyer.
The three big companies being bandied about are the reconstituted CBS-Viacom, Verizon, and Amazon. Each has its pros and cons, but to me, only one of them is truly the right fit. So let’s take a look at each and examine why they are or are not Cinderella’s slipper.
First up, CBS-Viacom. This, of course, assumes that they do merge again, after having initially split into two different companies a dozen years ago. Provided this occurs, then adding a company like Lionsgate would add another weapon to the arsenal that Viacom wields. As its enormous cable division falters with the rise of cord-cutting and tries to adapt to the changes, CBS continues to make money under the stewardship of Leslie Moonves and sees its own online reach expanding, and the addition of a company like Lionsgate, which has been slowly but surely increasing the size of its film library, would help to buttress its media empire. Don’t forget, too, that Lionsgate TV is behind such shows as Mad Men, Orange Is the New Black, and SpongeBob SquarePants. Additionally, with Lionsgate now owning prestige cable network Starz, the company would own two of the three biggest such entities, with CBS having possession of Showtime.
That might mean that one of the two would be spun off, but not necessarily. There’s no reason, in fact, why the company couldn’t hold on to both, with their separate libraries and streaming services. What would be more interesting, though, is what CBS-Viacom would do with Paramount, if it also had Lionsgate beside it. Would it keep both? Or would it do what it has been rumored to be interested in doing for some time, and sell Paramount outright? As it happens, I tend to think Paramount will be moved sooner rather than later anyway, regardless of whether or not Lionsgate enters the fold, but that’s a matter for another column.
For Lionsgate, being brought into a massive company with a huge and established infrastructure would be a boon. The added resources that come with such a move would be pivotal, not only in surviving this new climate of massive media conglomerates, but also to thrive and perhaps even grow to the size of a major studio, rather than what it is now, where it occupies the space between major and indie.
All that said, this only works if CBS and Viacom actually recombine. If they don’t? Moot. No way Viacom buys Lionsgate on its own, so let’s move on to the next contender.
Verizon is the nation’s largest telecommunications company, and with AT&T appearing to come up empty in its attempted acquisition of Time Warner, this would be an interesting deal for Verizon that would really stick it to one of its biggest competitors. More than that, of course, there is the fact that the company is greatly expanding its mobile video unit, which it just did last week by signing a new deal with the NBCA to let American fans buy and stream live, out-of-market games. By adding Lionsgate, Verizon moves beyond phones and internet and has a hand in longer form entertainment, thus also adding that sizable library to its own coffers. The way that content is now being consumed, this kind of deal makes a lot more sense now than it might have even five years ago.
Which brings us to Amazon, a company that wouldn’t appear to need Lionsgate at all, what with its own streaming service and studio that produces both movies and television. And yet, this might actually be the best fit of all, for a couple reasons. First, while Amazon’s film division has been showing big gains, it is still distributing those movies through other entities, including Lionsgate, actually. That’s about to end, as Amazon is going to start putting its own films in theaters, but if it owns Lionsgate, then that infrastructure comes with the purchase. Just like that, those two divisions can merge and become as big as most studios, especially with Amazon’s new mandate to make bigger movies and outright tentpoles.
On top of that, Amazon’s television division, which has certainly had a few hits — most recently The Marvelous Mrs. Maisel, which just won a couple of Golden Globes — has had decidedly more misses, and now that three more shows were canceled last week, that part of the company is not doing nearly as well as CEO Jeff Bezos would like it to be doing. While it searches for the next Game of Thrones, another mandate dictated from above, the Lionsgate TV division suddenly adds a whole new facet to the proceedings and gets Amazon much closer to its biggest competitor in the TV world, Netflix. At the moment, that gap is pretty wide, but it doesn’t have to be. This deal would potentially abbreviate it even further.
Additionally, Amazon already has a business arrangement with Lionsgate and Starz, as a discounted subscription to the cable network can be purchased with an Amazon Prime membership, and Prime members can access any shows that Starz owns or that is on the Starz streaming service, too. Thus, while the TV part of it is already there, Lionsgate’s film library suddenly becoming available to Prime members is something of a cherry on top. Throw in the fact that Bezos could write a personal check for the likely sale price of somewhere in the neighborhood of $10 billion, and it makes a fair amount of sense.
Ultimately, any of these three entities could end up with Lionsgate, or there could be a whole other buyer coming in and taking it away from any of them. What’s almost assured, though, is that someone is going to buy it. In the current climate, it’s the only sure way for Lionsgate to survive.