In our case we want to see management improve the

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invests more capital; for every dollar invested it pays out more than it earns with it. In our case we want to see management improve the company's ROIC before investing more capital. Ideally the company should sell non-performing assets in order to align ROIC with WACC. WACC (5 year average) ROIC ( 5 year average) Lionsgate Entertainment 7.25% -1.33% Source Bloomberg SECTION 8: STAKEHOLDER RELATIONSHIPS In the past ten years, there have been many events in Lionsgate Entertainment that have a material impact on its stakeholders. Through the years, Lionsgate have made many significant acquisitions and participated in various joint ventures, which we will be discussing in details below. Most of these events are aimed to expand Lionsgate’s library and market reach in order to generate more profit and benefits for its shareholders and stakeholders. The year of 2003 was an important year for Lionsgate Entertainment. In 2003, Frank Giustra, founder and former Chairman of Board of Lionsgate entertainment has resigned. 84 Giustra’s resignation would have a major impact on the operations of the company. Depending on the impact, this could have various effects on Lionsgate’s shareholders, creditors, employees, and moviegoers. For example, if Lionsgate failed to continue to produce quality motion pictures that attract moviegoers, it would have an adverse impact on movie ticket sales to Lionsgate’s movies. This would mean theatres would pay less or be less willing to pay Lionsgate in order to play movies produced by Lionsgate. This could lead to lower revenues and profits, affecting shareholders and creditors. To ensure the company’s future success, Lionsgate continued to hire Jon Feltheimer as its CEO. Additionally, in 2003, Lionsgate was involved in an arbitration proceeding relating to distribution of a motion picture. Arbitrator rendered an award in favour of the claimant for $0.3 million that was paid for by Lionsgate in 2003. The claimant had until December 2005 to make a motion to vacate the award. If the motion is granted and the matter is retried and Lionsgate failed to prevail as it did in the first arbitration, this could have a material adverse impact on the results
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Lions Gate Entertainment of future operations of future periods. Lionsgate believed that it has not violated its contract and continued to deny the allegations and maintained that it acted within its rights. 85 In the same year, Lionsgate also acquired Artisan Entertainment Inc. for $168.8 million. 86 This is the biggest acquisition Lionsgate has made since its inception. The acquisition of Artisan had added a diversified motion picture, family, and entertainment company to Lionsgate. The distribution network that Lionsgate had acquired through Artisan included direct-to-store distribution capabilities and output agreements with pay television and pay-per-view providers.
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  • Winter '13
  • Fah
  • Lions Gate Entertainment

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Christopher Reinemann
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