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Lionsgate Acquires Summit for $412.5 million UPDATED

Lionsgate Acquires Summit for $412.5 million UPDATED

Hollywood insiders had been speculating for weeks about just how the long-simmering Lionsgate/Summit merger would close. The problem? While Summit had every reason to cash out at the height of their value before the “Twilight” franchise comes to an end in November with “Breaking Dawn- Part Two,” there were many high-powered alpha players on both sides to make happy. UPDATE: Finally, Lionsgate acquired Summit Friday for $412.5 million in cash and stock.

And more “Twilight” films could be in the offing, Lionsgate chairman Jon Feltheimer told the LAT:

“The Twilight Saga: Breaking Dawn Part 2” may not be the end of Bella, Edward and Jacob’s on-screen journey, according to the head of the franchise’s new Hollywood home.

The chief executive of Lions Gate Entertainment, which on Friday acquired “Twilight” film studio Summit Entertainment for $412.5 million, said he believes the film franchise will continue to have value to his company, even after the Nov. 16 release of the fifth movie completes the adaptation of author Stephenie Meyer’s four books.

Lionsgate’s Feltheimer and lieutenant Michael Burns will wind up at the head of the new organization, with Summit’s Patrick Wachsberger –he and Rob Friedman owned some 30% of the private company– still running the international side of the new company. Both men are expected to run the motion picture division but contracts are not signed. 

While Summit’s Erik Feig is clearly a top production executive worth keeping, the question of how to streamline duplicative distribution and marketing teams proved problematic in negotiations. Both studio veteran Friedman and Lionsgate’s Joe Drake are formidable executives who know a great deal. Likely Drake, saddled with the fate of underperforming “Conan the Barbarian,” “Warrior” and “Abduction,” will manage a graceful exit via his former Mandate label. Feltheimer told the LAT that Drake will continue to shepherd “The Hunger Games” through to its March 23 release.

It’s hard to imagine hard-driving Wachsberger and Friedman–who deserve a lot of credit for succeeding with Summit– giving up their automomy under Feltheimer. But this way they will be relatively secure–they know what their real numbers would be without the “Twilight” franchise. They know that their company thrived and functioned because of those coffers. A franchise like that is lightning in a bottle.

Look at their other releases and you see why they wanted to sell: “50/50,” “Astro Boy,” Bandslam,” “The Beaver,” “A Better Life,” “The Brothers Bloom,” “The Darkest Hour,” “Drive Angry,” “Fly Me to the Moon,” “Furry Vengeance,” “The Ghost Writer,” “The Hurt Locker,” “Knowing,” “Letters to Juliet,” “Man on a Ledge,” “Never Back Down,” “Next Day Air,” “Penelope,” “P2,” “Push,” “Red,” “Remember Me,” “Sex Drive,” “Sorority Row,” “Source Code,” and “The Three Musketeers.”

It costs gobs of money to run a production/distribution company, even on a modest scale. That’s why Graham King scuttled FilmDistrict fairly quickly; it was hemorrhaging money before there was a library to throw off cash. Remember Joe Roth’s Revolution? Same problem. New start-ups need to spend $100 million before the money starts coming back in.
A merged Lionsgate/Summit –with franchise “Hunger Games” this March plus more “Twilight”s–will make a stronger entity. If the parties can get along.

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