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When it came to the bombing of Borderlands, among other late summer and fall releases, Lionsgate CEO Jon Feltheimer made no bones about emphasizing culpa nostra.
“On Borderlands, nearly everything that could go wrong did go wrong: it sat on the shelf for too long during the pandemic, and reshoots and rising interest rates took it outside the safety zone of our usual strict financial models,” the Lionsgate boss said during Thursday’s on today’s earnings call to discuss second-quarter 2024 earnings.
The $120 million feature adaptation of the famed video game starred Jack Black, Kevin Hart and, most glaring of all, two-time Oscar winner Cate Blanchett in a renegade action role. The movie grossed $15.4M domestic and close to $33M worldwide. Lionsgate mitigates risk on its movies by selling off foreign rights. Still, Borderlands, per sources, is expected to lose as much as $30M. It was a clear case of a cult game failing to find a broader audience.
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“The success of our financial models doesn’t take the place of also getting the creative right,” said Feltheimer.
Feltheimer also acknowledged that along with Borderlands, being “coupled with softer-than-anticipated results for other releases in the quarter, reflected an environment with less margin for error than ever before. Several of our other releases in the quarter, though cushioned by financial models that worked as intended, didn’t live up to either our standards or our projections.” Those misfires included Whitebird, The Crow, Killer’s Game, Never Let Go as well as Francis Ford Coppola’s Megalopolis, though the latter was a distribution deal for Lionsgate, meaning they had zero skin in the $120M production financed by The Godfather filmmaker. Megalopolis crashed with $7.6M at the domestic box office and under $14M worldwide.
Overall, Lionsgate’s motion picture profit fell to $2.6M during the quarter due to the string of bombs.
Feltheimer did underscore, “In spite of the above, our business model still works: risk-mitigated film and television slates, efficient production and marketing spends, a diversified portfolio of assets, and a strong library that serves as the ballast of our business, generating nearly $900 million in trailing 12-month revenue in the quarter.”
Feltheimer is looking forward to the future “under new leadership in our Motion Picture Group,” meaning former STX and Universal exec Adam Fogelson. On deck next year and beyond is Michael, Ballerina and Now You See Me 3; further out is Francis Lawrence’s next installment of Hunger Games. The CEO is also stoked by such future projects as Paul Feig’s Housemaid with Sydney Sweeney and Amanda Seyfried, Luca Guadagnino’s take on American Psycho, and Marc Webb’s Day Drinker starring Johnny Depp and Penélope Cruz, as well as the Ke Huy Quan action thriller Fairytale in New York.
Said Feltheimer, “we will also ensure that when we take bigger swings, we’re taking measured swings.”