If you need further proof that a movie studio can’t survive without a steady diet of cash-cow franchises, look no further than the Lionsgate/Summit Entertainment takeover. The talks began years ago and kept on in stop-start fashion, until late in 2011 it looked like some kind of a merger was really going to happen. Then over the weekend came the news that Lionsgate was buying out Summit for around $400 million in cash and the assumption of Summit’s debt. You can read about it—and how the trades are turning the details into a pissing match—here and here.
This deal is not surprising. Summit only ever had two futures: 1) be taken over by a bigger studio or 2) merge with a comparable mid-major. The first option is known as the “New Line post-LOTR meltdown route”, the second is the “cash out and run away laughing route”. I thought Summit would go for option 1, frankly, but obviously someone at Summit realized that their awful non-Twilight track record meant that doomsday was coming a lot faster than anticipated and decided to take the money and run while the getting was good. The exact details are still being ironed out but it looks like Lionsgate’s management will remain in charge with Summit’s top chiefs either working under them or exiting all together, depending on which trade you read.
The big question here is, of course, what happens to the prominent franchises in the middle of the merger. Summit’s Twilight franchise has brought in over two billion dollars and still has the final installment due this year, and Lionsgate is opening The Hunger Games this spring, which they hope will fill the void left by Harry Potter and the departing Twilight. I don’t expect much to change with Breaking Dawn 2. That’s a self-propelling machine at this point and Lionsgate is looking to profit from the box office, not wreck it in the final frame.
The Hunger Games, however, will likely benefit from a marketing team that’s cut their teeth dealing with a mega teen franchise. Lionsgate needs The Hunger Games to be a hit, so how better to accomplish that than to put the people who made Twilight a phenomenon in charge?
Five years ago Summit decided to become a full-fledged movie studio. Four years ago they launched a massively successful franchise. Last year they were talking merger with an equitable partner. Now they’re on the bitch end of a takeover. Man, the movie business is rough.