It’s Official Lionsgate and Summit Merge

According to the press release on the AP wire:

Movie and TV studio Lions Gate Entertainment Corp. is buying Summit Entertainment, the maker of the hit “Twilight” series for teens, for $412.5 million in cash and stock. The deal announced Friday brings together two studios hoping to create a Hollywood powerhouse focused on young adult audiences.

The “Twilight” franchise has grossed more than $2.5 billion worldwide since the first movie blew out of the gates in late 2008, and hordes of fans of the Stephenie Meyer books rushed to theaters. The finale of the five-movie juggernaut, “The Twilight Saga: Breaking Dawn Part 2,” is due out in November.

Meanwhile Lions Gate Entertainment Corp. plans to kick off its own four-part series based on Suzanne Collins’ young adult novels, “The Hunger Games,” beginning in March. The three books in the trilogy are ranked 1, 2 and 3 on USA Today’s best-seller list and there are about 23 million books in print.

Combined, the studios hope to reap the benefits of selling to similar audiences.

“They have a tremendous outreach with fans and the ability to reach them through email, Facebook, et cetera,” said Lions Gate CEO Jon Feltheimer. “Starting right now, today, we are going to utilize that institutional knowledge to move ‘Hunger Games’ ahead even more quickly.”

Summit co-chairmen Rob Friedman and Patrick Wachsberger said in a statement, “We believe that the combined entity will be even greater than the sum of its parts.”

Lions Gate said the majority of the purchase was funded with about $300 million in cash on Summit’s books. It paid another $55 million from its cash reserves, took on new debt of $45 million and paid $50 million in stock. Another $20 million will be due in cash or stock within 60 days.

At the close of the deal, Summit’s existing term loan was refinanced with a $500 million debt facility secured by revenue from Summit’s upcoming and existing films.

Lions Gate said that debt is expected to be repaid well before the maturity date in 2016 and added that the transaction will “significantly” boost Lions Gate’s earnings starting in April.

Feltheimer said Lions Gate would look to consolidate and pare down the combined studios’ upcoming slate of movies but didn’t specify how much. Before the merger they were on track to release a combined 22 to 27 films a year, which would put them on par with Hollywood’s biggest studios. Time Warner Inc.’s Warner Bros., for example, aims to put out 18 to 22 movies a year.

For Summit’s owners, the deal represents another big payout following a special dividend of around $200 million that accompanied a $750 million refinancing in March 2011.

The biggest winners are Summit’s management, including Friedman and Wachsberger, which owns about 30 percent of Summit, and Summit’s majority owner Suhail Rizvi of Rizvi Traverse Management.

It was not immediately clear if Friedman and Wachsberger would continue to run Summit as a Lions Gate subsidiary.

Lions Gate Entertainment Corp. already has a strong TV studio, which makes popular series such as “Mad Men,” ”Weeds,” ”Nurse Jackie” and is the key distribution partner of comedian Tyler Perry for his shows “House of Payne” and “Meet the Browns.”

The studio had been distracted recently by a lengthy shareholder battle with activist investor Carl Icahn, who finally agreed last year to sell most of his shares and focus his attention elsewhere. Lions Gate had also taken a close look at buying faltering studio Metro-Goldwyn-Mayer Inc., but lost out to creditors who took it over in late 2010.

Both Lions Gate and Summit have head offices in Santa Monica, Calif., although Lions Gate is technically based in Vancouver, British Columbia.

Lions Gate shares closed down 11 cents at $8.60 before the merger announcement.

So what does this mean for us fans? Given what they are talking about in regards to online communities and outreach, this is probably good for us. It seems likes Summit’s people who we have established a working relationship will remain. Historically Summit has been good in this area of fansite outreach, whereas Lionsgate has been in various instances been labeled as, ineffective, oblivious to, and even hostile to the fan community. Considering that there are a fair number of Hunger Games high profile fansites that are run by people connected to Twilight sites (three that come immediately to mind are Mockingjay, HOB, and Hypable) this is good for them as well.

Comments

  1. Daqtfairy says:

    I hope the new management doesn’t mess around with breaking dawn 2 as far the direction of the film, marketing, etc…

  2. I really hope Lionsgate doesn’t ruin the Twilight Saga. I heard that they wanted to continue the saga with another movie or even a T.V. show if possible. Don’t get me wrong, I LOVE Twilight, but I’m happy how the story ends, it’s perfect. I think Lionsgate is being a little greedy…

  3. I agree with all of you. It sounds like this is a source of concern much more than a reason to celebrate. Mergers are never a good thing – without a doubt people will lose their jobs before everything is said and done. If they’re already looking to “pare down” their combined movie releases, you can bet your bottom dollar that personnel and executives will be the next to fall. Duplicate staff positions will be unnecessary expenditures.

    I’m glad that there is only one original Twilight movie left to release, but all we can do is hope and pray that it is far enough along in the production process that they won’t try to mess with the actual film. Thank God that the powers that be had enough foresight to combine filming and most of production of Breaking Dawn 1 & 2. If not, who knows how that could have turned out? CGI costs money!

    I also agree that a tv series would be a sad development. It would water down and possibly tarnish the image of the entire book / movie franchise. With the exception of Buffy, I can’t remember that being a very sucessful move in the past.

  4. I’ve been keeping an eye on this for the past week or so with mixed emotions. I can see it as being a good thing, and I can see it as being a bad thing, but I can’t deny that I was hoping the whole thing would be drawn out a lot longer.

    Like everyone else here, I’m just hoping that BD2 is given the same treatment by the same people as the other 4 movies and that Lionsgate doesn’t try to mess with anything. (If it ain’t broke, please don’t try to fix it.) I wish we had more info – like how long until this actually starts happening? With two big companies like this, reorganizing has to be complicated. Is it too much to ask that it take a while for them to get organized enough to do anything? Like, say November 17th? lol

    As for rumors of a TV series, they are SM’s characters, and I can’t see how they could do anything like that without her say-so. And I can’t really see her doing something like that. She’s too protective of her characters to just hand them over to someone else . . . I hope.

    • Twilight_News says:

      In fairness of full disclosure we have no inside info here, but knowing how hands on Stephenie has been about these movies, The Host movie, and Austenland, we would find it stunning if they made a TV show in that she’s a little wrapped up right now and she likes to be hands on.

      If you read all that guy has to say in the LA Times it’s a lot of I hope, it would be nice that , I can’t imagine that…doesn’t mean anyone has signed the ink to give them the rights. They can’t do a TV series unless Stephenie Meyer says yes. Food for thought, The Host isn’t being done by Summit. Austenland is her own production company.

  5. thephantomcat says:

    Seriously a Twilight series could be great. I love Breaking Dawn, but there are too many loose ends. They introduce so many characters without fully exploring them. And the issues with the villian are essentially left unresolved. Oh yeah, and she introduces a new breed of immortals and doesn’t even scratch the tip of the iceberg. The twilight saga needs another final chapter.

  6. Mary Masen says:

    I can honestly say that I am no happy about this. Because like most of the comments already say “How will that effect the post-production & promotion of Breaking Dawn Part 2?” I want to believe that the post-production crew members have a contract that won’t be affected by this decision. Also I really hope that Summit will keep its name especially for the BD2 promotion & credits. Summit has always been here for us, ever since it bought the rights to make the Twilight movie when no other studio did. Keep your heart beating, Summit!!

  7. Let’s hope Summit won’t ruin The Hunger Games.

  8. This is kind of upsetting. Why on earth would Summit (with all of their Twilight profits alone) sell themselves? I don’t understand. Also – Lionsgate better not screw w/ BD2 or any final DVD sets after the last movie comes out.

    • Joshua L. Roberts says:

      To answer your question, there are many reasons Summit would do that. As you are aware Summit is largely an independent studio, as such they have limited resources, merging with another larger studio, would allow them to use whatever resources Lionsgate has, versus having to pay other studios to use their’s… It makes good business since. Everything they are doing is to help them maintain their profits, and allow them further power to generate larger ones.

      As I’ve mentioned before, Hollywood is a business…

      As for the merger’s impact on BD2… I don’t see it impacting anything, as the film has already been filmed, and as such most of the work that is going into it now has more to do with CGI work and or editing tweaks and such. As Summit has already announced its release date, unless a catastrophy beyond recognition happens, such as the film getting destroyed, and erased from all secure servers all at the same time, I doubt Lionsgate is going to touch that.

      In respect to marketing… the extra resources that Lionsgate has, should actually help Summit get it out there. Summit was incredibly hush hush on this last film, so I don’t see how Lionsgate’s involvement now would alter that.

      • I’m probably speaking out of turn without doing more research, but from the story above the merger is being funded in a large part with Summit’s cash. The headline says merger which is what this sounds like more than a purchase. It sounds like Summit is the more financially sound of the two, and it has a good reputation. Look how at its growth after the smart decision to produce the Twilight movies. I don’t think they’ve had any lack of resource problems with their production or marketing judging from the billions of dollars generated by the Twilight movies worldwide. I would be surprised if Summit didn’t want their name to survive in some way.

        I wonder if this deal will survive SEC scrutiny in this financial day and age once all the paperwork is filed.

      • I’m probably speaking out of turn without doing more research, but from the story above the merger is being funded in a large part with Summit’s cash. The headline says merger which is what this sounds like more than a purchase. It sounds like Summit is the more financially sound of the two, and it has a good reputation. Look how at its growth after the smart decision to produce the Twilight movies. I don’t think they’ve had any lack of resource problems with their production or marketing judging from the billions of dollars generated by the Twilight movies worldwide. I would be surprised if Summit didn’t want their name to survive in some way.

        I wonder if this deal will survive SEC scrutiny in this financial day and age once all the paperwork is filed.

  9. thephantomcat says:

    Fan fiction is juvenile and horribly written. I read it for Lord of the Rings and Harry Potter. It’s like throwing battery acid directly on my brain. I’d rather watch a series produced by professionals if a fifth book is never written. In fact, I’d love to read a series devoted to the new immortals taking on the Vulturi. As far as the release of Breaking Dawn 2, Lionsgate won’t screw that up. It’s paranoid to think that.

  10. CullenCoven says:

    They made a huge mistake if that’s why they merged.

  11. I went to the Eclipse and Breaking Dawn I Premiere at the Nokia Theater in Los Angeles held by Summitt Entertainment. I hope Lionsgate plans on continuing to do the same for the last installment of Breaking Dawn II; remains to be seen. It is still very early, but come around the end of summer this year several of us twihards are gonna start looking for answers.

  12. I am not too happy about this merger. I liked how summit was before. It was small and produced films that i really love. Now that they are with lionsgate i feel like everything will be different. Have you seen the comment they want to make a tv series and crap. This merger, to me as a twiligth fan, feels so wrong. Summit- you were fine with the way things were.Lionsgate- please do not mess up our favorite movie/story.

  13. Summit and Liongate need to move on from the Twilight saga’s. Breaking Dawn was wonderful but they need new ideas and we need new meat. Lautner and Pattison is old news.Taylor Lautner drove women crazy for one reason and one reason only because of his native american heritage. Let’s face it their is nothing hotter than an native american man if he’s hot. Billy Wirth and Micheal Greyeyes are gods gift to women. Check out a Good Day to Die (BILLY) and Stolen Woman Captured Hearts ( Greyeyes) . Now Summit & Liongate goldmine rest there. These men are sex walking.Native American men make you won’t to move on the reservation just to be taken again and again with pleasure.Wake up and smell the sex or coffee.I prefer the sex Liongate.

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