Lionsgate Studios (LION) Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025 summary

Strategic separation and operational focus

• Separation from the studio is expected to complete by mid to late April, with shareholder vote pending SEC feedback.

• The split aims to create two clear, investable businesses, allowing management to focus on core strengths and drive simplicity for investors.

• Synergies with the studio will continue post-separation, including content deals and collaborative production, with key agreements extended through 2028.

• Starz will focus on its core demographic—primarily women—leveraging a strong content slate and targeted programming.

• The standalone structure enables Starz to pursue scale as a focused streaming partner, especially through bundling and digital growth.

Content strategy and subscriber growth

• Five major shows currently attract 9–12 million weekly viewers, with plans to increase content output post-strike for fiscal 2026.

• Content investment is $600–$750 million annually, focused on two key demos, with new spinoffs and prequels (e.g., Outlander, Power Universe) in development.

• Subscriber base is around 20 million, with a domestic TAM of 80–90 million households; growth will be driven by content and potential AVOD expansion.

• Bundling with other streamers (e.g., Max, BET) is showing strong increases in subscriber lifetime value and reduced churn.

• Fiscal 2026 will see a return to consistent content cadence, expected to stabilize and grow OTT subscribers and revenue.

Financial outlook and margin improvement

• EBITDA margin is currently 15%, with a target of 20% by fiscal 2028 through revenue growth, cost control, and increased ownership of content.

• Content spend will be reduced to $600–$650 million, with half the slate becoming Starz-owned shows, improving economics and enabling international sales.

• Bundling, rate increases, and digital subscriber growth are key levers for ARPU and revenue expansion.

• Free cash flow conversion is about 70%, with leverage targeted to decrease from 3x to 2.5x.

• Capital allocation will prioritize deleveraging, internal investment, and selective M&A to build scale within core demos.