Lionsgate Chairman Kevin Beggs Talks Projects With 42, International Productions, Recent Successes & Netflix Woes – Banff

Lionsgate Chairman Kevin Beggs has said the studio is “working on a variety of projects” with 42, ramping up international productions and has put recent successes down to there being “a little more room at the broadcasters.” Beggs also defended Netflix following a period of lower-than-expected growth for the streamer but said it may need to be “more judicious and disciplined” going forwards.

Speaking to Deadline in a wide-ranging interview at Banff, where he is Chair of the Board of Directors, Beggs hinted at what’s to come once the deal for a minority stake in London and LA-based management and production firm 42 officially completes in the coming weeks.

“We’re already working on a variety of projects,” he added. “We love 42’s entrepreneurial spirit and they have a fantastic model and a U.S. footprint. This feels promising.”

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Deadline revealed in March that Ghosts and Minx producer Lionsgate had taken the minority stake in 42, which counts Jesse Armstrong, Julian Fellowes and Lynne Ramsay as clients. It is understood management-production powerhouse 3 Arts Entertainment, of which Lionsgate is a majority owner, was a key driver for the deal and will look to collaborate on TV and film projects.

The move comes as Lionsgate gets ready to sell premium cable channel Starz, with more news due in the summer and completion date set for next Spring, according to Lionsgate CEO Jon Feltheimer on a recent earnings call, although Beggs wouldn’t be drawn on any more detail and didn’t say whether Lionsgate will hit the M&A market once the deal closes.

He said Lionsgate is looking to ramp up production outside the U.S. as international co-pros attract more attention, although he stressed that putting together packages such as Sky/HBO’s The Young Pope still requires “10-out-of-10 thinking.”

Lionsgate recently shot John Wick prequel The Continental in Budapest along with a second season of BBC’s The Pact in Wales, with Beggs talking up “more to come in all these markets.”

In the UK, Lionsgate took an equity stake in drama indie Potboiler Television five years ago and Beggs said projects are still at development stage.

“For scale, the UK market is important and the terms of trade are very favorable to indies but it’s still a very small club [of indies] that get commissions there. We love what Potboiler has done and are trying to get more across the finish line.”

Recent successes

Lionsgate’s TV division has been buoyed by recent successes mainly in the half-hour comedy space such as CBS’ Ghosts and Fox’s Welcome to Flatch and the unit defied the wider company’s quarterly earnings miss last quarter to boost revenues by 75% to $370.2M.

Beggs put this down to “there being a little more room at the broadcasters” for new shows.

“As a mid-sized indie we’re really nimble and can move quickly to coalesce around a piece of IP, project or pitch,” he explained, adding that there had been “more buyers, more spending and more customer acquisition” in recent months.

Going forwards, the indie is looking to produce more “noisy, lean-in shows” such as HBO Max’s Minx or, outside of the Lionsgate sphere, Showtime’s Yellowjackets.

While Lionsgate can’t necessarily compete with deep-pocketed competitors to attract the most expensive talent or tie them to lucrative, exclusive deals, Beggs said this affords the company an opportunity to “hunt for the next generation.”

Defending Netflix

The chair of the Orange is the New Black producer defended Netflix following a period of lower-than-anticipated subs growth that has led to question marks over the streamer’s model, but said it may need to be “more judicious and disciplined” going forwards.

“Netflix has a huge subs base and has been the dominant player in the space since the start of the streaming revolution,” he added. “They sprinted ahead of everyone and now competitors are catching up so they are having to monitor their business. They will know better than anyone else what is efficient and performing and our job as sellers is to make sure we sell and generate shows that work for them and are hits.”

During yesterday’s Banff keynote, Netflix Head of Global TV Bela Bajaria said the streamer is going “back to basics” and forecast a content spend this year of $17B.

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