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No. of Recommendations: 9
This is one of those names I follow off and on like Discovery. One of the few remaining independent film/TV studios, they bought Starz 2.5 years ago for $4.4bn in cash and stock, LGF only worth $3.2Bn market cap today.

They turned down an offer of $40 from Hasbro [yes] like 18 months ago. Whoops. Stock is now $15, cut in half in 12 months.

The Chairman bought about $10m in shares in December, and he's already a 10% owner. John Malone also owns around 8%.

OTT subs were like 300k last Q. Stock trades about 9x ebitda. EPIX, a much smaller network got bought for 11x.

Firm is well diversified btw Movies, TV, Production - recent pilot order from NBC. They do about 7% of Hollywood box office compared to Fox at 12% and Disney at 23%.

Really good acquisition candidate you'd get tax savings and also cost savings from integration. Their two most popular shows have younger showrunners. Expanding to France, Italy and Spain this year.

Motion pictures are weak this year, this is more of a 2020 story which means by now to me. I can't see how this doesn't get back to $23 at a minimum.

As others have noted, with Disney and TimeWarner offering their own OTT services, large portions of libraries will be gone. Here are the expiries:
Starz/Sony 2021, Epix/LGF 2021, HBO/Universal 2022, HBO/Fox 2022, HBO/Summit 2022.

LGF owns 16,000 films from My Little Pony, Twilight to Dirty Dancing to Rambo to Total Recall, The Hunger Games, La La Land, Saw, It's a Wonderful Life and everything in between. John Wick franchise is expected to be turned into a TV series.

If you're Amazon or Netflix who just lost Disney or Disney or HBO/TW paying under $5bn or whatever seems like a screaming bargain to me for this content. Maybe New Fox is interested. CBS and Viacom have been interested.


Risks: Well, you know the entertainment industry! The movies could bomb. They might not create any new series like Nashville, Mad Men, Power and Outlander. Cable companies looking to cut costs could pay them less to carry them. Subs who have Netflix, Amazon, and say Hulu/Disney may decide they don't need another channel [I think this is overblown, most people I know don't regard Prime as another channel they pay for, and you can get all of the above plus Starz for about half your cable bill.]
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