Not long ago, Lionsgate — the last major independent movie company — seemed headed to Hollywood’s scrap heap.
It couldn’t seem to find a hit. The studio released 17 movies in 2024 and generated just $251 million in domestic ticket sales. That figure was 85 percent lower than Lionsgate’s 2012 peak, when Katniss Everdeen, the “Twilight” vampires, Madea and the “Expendables” mercenaries helped generate $1.72 billion. As the slump persisted into last summer, Lionsgate shares fell to $5.76, their lowest level since the Covid-19 pandemic, when most theaters closed with no reopening in sight.
The conventional wisdom on Wall Street and in Hollywood: Lionsgate’s best hope was to find a buyer. If old-line movie giants like Paramount and Warner Bros. had concluded they needed to merge to compete with Big Tech, what chance did little Lionsgate have?
But the studio has since done something few thought possible — it has given itself options.
Over the weekend, Lionsgate’s contentious Michael Jackson biopic, “Michael,” crossed $1 billion at the global box office, becoming the studio’s first movie to reach that milestone, according to Rentrak, a film data service. Lionsgate took on the $150 million project after Hollywood’s biggest studios passed, believing that decades of child-molestation accusations against Mr. Jackson made it too risky. (Universal and Kino Films joined with Lionsgate to distribute the film overseas.)
“Michael” followed “The Housemaid,” a Lionsgate thriller based on Freida McFadden’s book. It cost $35 million to make and collected $400.5 million, a figure that dropped jaws in Hollywood. Lionsgate is already preparing sequels to both films. No other studio has found two new theatrical franchises this year.
In November, Lionsgate has a “Hunger Games” sequel. Its longer-term pipeline includes a “Rambo” prequel, two more “John Wick” movies, “Now You See Me 4” and two sequels to Mel Gibson’s blockbuster “The Passion of the Christ.” The studio has also teamed with the horror producer Jason Blum to reimagine “The Blair Witch Project” and the filmmaker James Wan to revive the lucrative “Saw” series.
“The lion is roaring,” said Sean Diffley, who leads media and entertainment research for Morgan Stanley.
Lionsgate shares have increased roughly 130 percent since June of last year. In the most recent quarter, which ended before “Michael” arrived in theaters, operating profit increased 52 percent. Per-share earnings totaled 24 cents, compared with a loss of 44 cents a year earlier.
“They’ve proven they can operate on a stand-alone basis in an effective manner — that they can still create big hits and find fresh I.P. in a tricky market,” Mr. Diffley said, referring to intellectual property like the “Housemaid” book trilogy.
“At the same time,” Mr. Diffley added, “there’s certainly a view in the market that scale matters.”
Before conglomerates and streaming rewrote the rules, every Hollywood studio looked a bit like Lionsgate. One hit could remake a balance sheet. Today, Lionsgate is the only major studio that isn’t part of a corporation that makes most of its money in related businesses. Disney, for instance, owns seven film studios — yet its movies are such a small piece of its earnings that the company no longer breaks them out in financial reports, instead stuffing the results into a line item called “content sales.”
The challenge for an independent studio like Lionsgate, of course, is that there is no theme-park division or consumer-products empire to soften the blow when movies disappoint.
Lionsgate has periodically attracted potential buyers, including Sony Pictures Entertainment, Hasbro and Legendary Entertainment, which is home to the “Godzilla” and “Dune” movie franchises. Last month, rumors rippled through Hollywood that Netflix was pursuing the studio. Netflix quickly shot them down.
Debt has given some pause; Lionsgate carries $1.78 billion in long-term debt, and an additional $1.29 billion in borrowing tied to individual films and television series.
Suitors have also had to contend with Lionsgate’s two largest shareholders. Mark Rachesky, the studio’s chairman, and Steven Mnuchin, who joined the Lionsgate board in January, together control roughly a quarter of the shares. (Last year, though, Lionsgate eliminated its dual-class share structure, leaving a single class of voting stock — a simplification that can make merger negotiations more straightforward.)
Along with movies, Lionsgate makes numerous TV shows, sometimes in partnership with other studios. The biggest include “The Studio” on Apple TV, “The Rookie” on ABC and “The Hunting Wives” on Netflix. Jon Feltheimer, Lionsgate’s chief executive, told analysts in May that the studio would “nearly double” the number of scripted episodes it delivered this year compared with last year.
Lionsgate also has a 20,000-title film and TV library that generates more than $1 billion in annual revenue.
But the studio’s current engine is movies, and Adam Fogelson deserves much of the credit.
Mr. Fogelson, a former Universal Pictures chairman known for his feel for franchises, took over the Lionsgate Motion Picture Group in 2024. Output had been scrambled by the Covid-19 pandemic and Hollywood strikes, leading to a parade of clunkers, including “Borderlands,” an action comedy that cost $115 million and collected $33 million worldwide.
As a practice, Lionsgate reduces risk by selling most overseas distribution rights and spending less on marketing (sometimes much less) than the big studios. But even those safeguards weren’t enough to spare the company’s bottom line.
The first movies shepherded by Mr. Fogelson began arriving late last year. Almost every one has succeeded, including “The Long Walk,” an inexpensive horror thriller, and the sequel “Now You See Me: Now You Don’t.” According to IMDBpro, a film data service, Lionsgate has seized a 10 percent share of the domestic box office this year, almost twice that of Warner Bros.
The pressure is now on Mr. Fogelson to keep the momentum going. In an interview, he said he expected to have an update on a “Michael” sequel later this summer. He also said he was excited about a new “Dirty Dancing” movie, with Jennifer Grey returning as Baby. Lionsgate is also continuing to explore ways to bring the “Twilight” franchise to a new generation.
“I’m incredibly optimistic about where we’re headed,” Mr. Fogelson said, “with every project driven by the distinct creative vision of some of the most talented filmmakers in the industry.”
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