Lionsgate, SP Media Form Joint Venture With About $100 Million

By Amara Osei

SP Media will make a capital investment of around $100 million in a new Lionsgate joint venture that Lionsgate will majority-own and control, TheWrap reported, citing an individual familiar. SP Media will also produce independent feature films for Lionsgate to distribute, according to TheWrap.

The investment’s financial terms remained undisclosed, according to TheWrap. The arrangement pairs the studio with producer, financier and entrepreneur Steven Paul’s SP Media.

How will the $100 million expand Lionsgate?

The capital will support new ventures designed to expand and grow Lionsgate’s content offering, TheWrap reported. It will also extend resources toward the continuing diversification of 3 Arts and other Lionsgate businesses, TheWrap reported.

TheWrap described Paul as a producer, financier and entrepreneur. The report included this statement:

“Lionsgate is one of the most dynamic and entrepreneurial content studios in the media space today,” Paul said in a statement. “I’m delighted to build on my longstanding relationship with Jon Feltheimer and the Lionsgate leadership team as we grow our businesses together in an industry environment filled with opportunity.”

What is the federal film-tax effort?

Paul has spent months lobbying President Donald Trump for a federal film-production tax incentive, TheWrap reported. He has worked alongside longtime actor collaborator Jon Voight and SP Media Group President and COO Scott Karol.

Trump supported Paul’s effort in August, TheWrap reported. That support led to the introduction of the bipartisan Motion Picture, Television, and Entertainment Revitalization Act, according to TheWrap.

The bill will begin its path through Congress when lawmakers return to Washington for the lame duck session on Nov. 9, TheWrap reported. Sponsors hope Congress will pass the bill and send it to Trump for final signature by the end of the year, with the incentive taking effect immediately, TheWrap reported.

Which films has Paul produced?

• TheWrap listed the “Baby Geniuses” franchise among Paul’s credits.
• TheWrap also credited him with “Ghost Rider” and “Ghost Rider 2: Spirit of Vengeance,” starring Nicolas Cage.
• TheWrap credited him with “Ghost in the Shell,” starring Scarlett Johansson, and the Lionsgate-distributed “Rambo: Last Blood.”

TheWrap also included a statement from Lionsgate’s Jon Feltheimer. He said:

“Steven is a savvy & experienced entrepreneur who has a longstanding relationship with our studio, and I’m pleased to partner with him across multiple touchpoints of our business,” Feltheimer added. “He recognizes the unique and valuable assets that we have built and his investment will help drive the continued growth of these businesses.”

Who negotiated and advised on the deal?

TheWrap said Lionsgate COO Brian Goldsmith, EVP & General Counsel Bruce Tobey and Senior VP Corporate Development Suzy Felfeli negotiated the deal with SP Media Group President and COO Scott Karol. Moelis served as financial advisor to Lionsgate, according to TheWrap.

Lazard served as financial advisor to SP Media, and Paul Hastings LLP represented SP Media on the deal, according to TheWrap. The advisers covered both sides of the capital commitment and SP Media’s legal representation.

Who is pursuing Lionsgate?

“Dune” producer Legendary Entertainment has submitted a takeover offer to acquire Lionsgate, TheWrap reported. The joint venture comes as the studio has attracted takeover interest from Banijay, Mediawan and France’s Bollore Group, according to TheWrap.

None of those three companies has submitted a formal offer, TheWrap reported. The next dated milestone is Nov. 9, when lawmakers return to Washington for the lame duck session; sponsors are targeting Trump’s signature by year-end and immediate effect for the incentive.

Alongside that timetable, Lionsgate must manage Legendary’s submitted takeover offer while deploying SP Media’s capital. That leaves capital deployment, congressional passage and any response to Legendary’s offer as the near-term tests for Lionsgate and SP Media.