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We face substantial capital requirements and financial risks.
−Removed: The production, acquisition and distribution of motion picture and television content requires substantial capital and may subject us to financial risks.
−Removed: A significant amount of time may elapse between our expenditure of funds and the receipt of revenues after release or distribution of such content and we cannot assure you that we are able to successfully implement arrangements to reduce the risks of production exposure such as tax credit, government or industry programs.
−Removed: Additionally, we may experience delays and increased expenditures due to disruptions or events beyond our control and if a production incurs substantial budget overruns, we may have to seek additional financing or fund the overrun itself.
+Added: The production, acquisition and distribution of motion picture and television content requires substantial capital.
+Added: A significant amount of time may elapse between expenditure of funds and the receipt of revenues after release or distribution of such content.
+Added: We cannot assure you that we are able to successfully implement arrangements to reduce the risks of production exposure such as tax credit, government or industry programs.
+Added: Moreover, we may experience delays and increased costs due to disruptions or events beyond our control and if a production incurs substantial budget overruns, we may have to seek additional financing or fund the overrun itself.
We cannot make assurances regarding the availability of such additional financing on terms acceptable to us, or that we will recoup these costs.
−Removed: Increased costs or budget overruns incurred with respect to a particular film may prevent a picture from being completed or released or may result in a delayed release and the postponement to a potentially less favorable date, all of which could cause a decline in box office performance, and, thus, the overall financial success of such film.
+Added: Increased costs or budget overruns incurred with respect to a particular film may prevent its completion or release, or may result in a delayed release and the postponement to a potentially less favorable date.
+Added: This could adversely affect box office performance and the overall financial success of such film.
Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
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Such impairment charges could adversely impact our business, operating results and financial condition.
−Removed: Changes in our business strategy, plans for growth or restructuring may increase our costs or otherwise affect our profitability.
+Added: Changes in our business strategy including consummation of the separation of the Studio Business and the STARZ business of Lionsgate, plans for growth or restructuring may increase our costs or otherwise affect our profitability.
As changes in our business environment occur, we may adjust our business strategies to meet these changes, which may include growing a particular area of business or restructuring a particular business or asset.
In addition, external events including changing technology, changing consumer patterns, acceptance of our theatrical and television offerings and changes in macroeconomic conditions may impair the value of our assets.
−Removed: When these occur, we may incur costs to change our business strategy and may need to write down the value of assets.
−Removed: We may also make investments in existing or new businesses, including investments in the international expansion of our business and in new business lines (e.g., our direct-to-consumer and licensed offerings).
−Removed: Some of these investments may have negative or low short-term returns and the ultimate prospects of the businesses may be uncertain or, in international markets, may not develop at a rate that supports our level of investment.
+Added: When these occur, we may incur costs to adjust our business strategy and may need to write down the value of assets.
+Added: We may also invest in existing or new businesses.
+Added: Some of these investments may have negative or low short-term returns and the ultimate prospects of the businesses may be uncertain or may not develop at a rate that supports our level of investment.
In any of these events, our costs may increase, we may have significant charges associated with the write-down of assets, or returns on new investments may be lower than prior to the change in strategy, plans for growth or restructuring.
−Removed: In March 2023, we announced that we had confidentially submitted a draft registration statement on Form 10 with the SEC relating to the proposed spin-off of our studio business, consisting of our Television Production and Motion Picture segments.
−Removed: The proposed spin-off will be subject to the satisfaction of a number of conditions and our board of directors may decide not to proceed with the spin-off at any time.
−Removed: A failure to satisfy required conditions, or disruptions in market conditions, could delay the completion of the proposed spin-off for a significant period of time or prevent it from occurring at all.
−Removed: Additionally, the proposed spin-off is complex in nature, and unanticipated developments or changes, including disruptions in general market conditions, changes in law or challenges in executing the spin-off, may affect our ability to complete the spin-off on the terms or on the timeline we announced, or at all.
−Removed: These or other developments could cause us not to realize some of all of the expected benefits, or to realize them on a different timeline than expected.
−Removed: Although we intend for the spin-off to be tax-free to shareholders for U.S.
−Removed: federal income tax purposes, we expect to incur non-U.S.
−Removed: cash taxes on the preparatory restructuring.
−Removed: Moreover, there can be no assurance that the proposed spinoff will qualify as tax-free to shareholders for U.S.
−Removed: federal income tax purposes.
−Removed: If we are unable to complete the proposed spin-off, we will have incurred costs without realizing the benefits of such transaction.
−Removed: Whether or not the spin-off is completed, our businesses may face material challenges as a result of the spin-off, including the diversion of management’s attention from ongoing business concerns and impact on the businesses of the Company;
−Removed: maintaining employee morale and retaining and attracting key management and other employees;
−Removed: retaining existing or attracting new business and operational relationships, including with customers, suppliers, employees and other counterparties;
−Removed: establishing transition service agreements and standalone readiness for key functions, and potential negative reactions from investors or the financial community.
−Removed: Moreover, completion of the spin-off will result in independent public companies that are smaller, less diversified companies with more limited businesses.
−Removed: As a result, each company may be more vulnerable to global economic trends, geopolitical risks and changing market conditions, which could have a material adverse effect on its business, financial condition, cash flows and results of operations.
−Removed: Each of the separate companies will also incur ongoing costs, including costs of operating as independent public companies, that the separated businesses will no longer be able to share.
−Removed: Additionally, we cannot predict whether the market value of our common shares and the common shares of each of the new independent companies after the spin-off will be, in the aggregate, less than, equal to or greater than the market value of our common shares prior to the spin-off.
+Added: In addition, on May 13, 2024, we consummated the business combination which resulted in the launch of Lionsgate Studios.
Our revenues and results of operations may fluctuate significantly.
Our results of operations depend significantly upon the commercial success of the motion picture, television and other content that we sell, license or distribute, which cannot be predicted with certainty.
−Removed: The underperformance at the box office of one or more motion pictures in any period may cause our revenue and earnings results for that period (and potentially, subsequent periods) to be less than anticipated.
+Added: In particular, if one or more motion pictures underperform at the box office in any given period, our revenue and earnings results for that period (and potentially, subsequent periods) may be less than anticipated.
Our results of operations also fluctuate due to the timing, mix, number and availability of our theatrical motion picture and home entertainment releases, as well as license periods for content.
−Removed: Moreover, low ratings for television programming produced by us may lead to the cancellation of a program resulting in significant programming impairments in a given period and can negatively affect license fees for the cancelled program in future periods.
−Removed: In addition, the comparability of our results may be affected by changes in accounting guidance or changes in our ownership of certain assets and businesses.
+Added: Moreover, low ratings for television programming produced by us may lead to the cancellation of a program which may result in significant programming impairments in a given period, and can negatively affect license fees for the cancelled program in future periods.
+Added: Other than non-renewals or cancellation of television programs or series that may occur from time to time, we are not aware of any current material cancellation of television programming releases or of content that we sell, license or distribute.
+Added: In addition, the comparability of our results may be affected by changes in accounting guidance or changes in our ownership of certain assets
+Added: and businesses.
As a result of the factors above, our results of operations may fluctuate and differ from period to period, and therefore, may not be indicative of the results for any future periods or directly comparable to prior reporting periods.
+Added: Our content licensing arrangements, primarily those relating to the distribution of films in foreign territories, may include minimum guarantee arrangements which, absent such arrangements, could adversely affect our results of operations.
+Added: We generate revenue principally from the licensing of content in domestic theatrical exhibition, home entertainment (e.g., digital media and packaged media), television, and international market places.
+Added: Certain of such content licensing arrangements, primarily those relating to the distribution of films by third parties in foreign territories, may include a minimum guarantee.
+Added: Revenue from these minimum guarantee arrangements amounted to approximately $151.0 million, $101.3 million and $51.1 million for the years ended March 31, 2024, 2023 and 2022 respectively.
+Added: To the extent that receipts generated by such foreign distributor from distribution of the film in the territory exceeds a formula-based threshold, the distributor pays us an amount in addition to the minimum guarantee (the “overage”).
+Added: Absent these arrangements, the revenues derived by us may be determined as a function of a revenue-sharing formulation that calculates the licensee fee payable to us solely based on the actual performance of the film in the territory.
+Added: In these situations, content that is not favorably received or underperforms may not achieve the level of revenues that we would have received from a minimum guarantee arrangement, which could adversely impact our business, operating results and financial condition.
We do not have long-term arrangements with many of our production or co-financing partners.
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We do not have long-term agreements with retailers.
−Removed: In addition, in fiscal 2023, we generated over 10% of our revenue from one external customer.
−Removed: We cannot assure you that we will continue to maintain favorable relationships with our retailers and distributors or that they will not be adversely affected by economic conditions, including as a result of global pandemics, such as COVID-19, wars, such as Russia’s invasion of Ukraine (including sanctions therefrom), rising interest rates, inflation or a recession.
+Added: In addition, in fiscal 2024, 2023 and 2022, we generated approximately 21%, 20% and 18%, respectively, of our revenue from Amazon.com, Inc.
+Added: and its subsidiaries.
+Added: We cannot assure you that we will maintain favorable relationships with our retailers and distributors or that they will not be adversely affected by economic conditions, including as a result of global pandemics, wars, such as Russia’s invasion of Ukraine (including sanctions therefrom, though we and, to our knowledge, our directors and executive officers have not been, and are not expected to be, subject to any sanctions related to Russia’s invasion of Ukraine), the Israel-Hamas war, rising interest rates, inflation or a recession.
A significant portion of our library revenues comes from a small number of titles.
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in some cases, we only hold the right to distribute titles in certain media and territories for a limited term;
+Added: in other cases, certain rights may be reserved and/or granted to third parties or otherwise only granted to us for a limited period.
If we cannot acquire new product and the rights to popular titles through production, distribution agreements, acquisitions, mergers, joint ventures or other strategic alliances, or renew expiring rights to titles generating a significant portion of our revenue on acceptable terms, any such failure could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
−Removed: The ongoing impact of the COVID-19 global pandemic could continue to materially and adversely affect our business, financial condition, and results of operations.
−Removed: Since fiscal 2020, the economic, social and regulatory impacts associated with the COVID-19 global pandemic, continued measures to prevent its spread, and the resulting economic uncertainty, have affected our business in a number of ways.
−Removed: We experienced delays in theatrical distribution of our films, both domestically and internationally, as well as delays in the production of film and television content (resulting in changes in future release dates for some titles and series).
−Removed: Although film and television production have generally resumed in full, disruption of production activities could occur again, depending on local circumstances.
−Removed: We cannot predict whether productions will be paused again or the impact of incremental costs required to adhere to new health and safety protocols.
−Removed: Additionally, although theaters have generally reopened, we are not able to accurately predict if and at what level consumers will return to movie theaters.
−Removed: We have incurred and we may continue to incur additional costs to address any government regulations and the safety of our employees and talent.
−Removed: All of these impacts could place limitations on our ability to execute our business plan and materially and adversely affect our business, financial condition and results of operations.
+Added: Other than our recent acquisition of eOne, we have not entered into any agreements regarding material acquisitions of titles, renewals, business combinations, joint ventures or sales that are pending.
+Added: Completed material acquisitions have been previously disclosed in our reports that have been filed under the Exchange Act.
Changes in consumer behavior, as well as evolving technologies and distribution models, may negatively affect our business, financial condition or results of operations.
Our success depends on our ability to anticipate and adapt to shifting content consumption patterns.
−Removed: The ways in which viewers consume content, and technology and business models in our industry, continue to evolve, and new distribution platforms, as well as increased competition from new entrants and emerging technologies, have added to the complexity of maintaining predictable revenues.
+Added: The ways in which viewers consume content, and technology and business models in our industry, continue to evolve, and new distribution platforms, as well as increased competition from new entrants and emerging technologies, have added to the complexity of maintaining
+Added: predictable revenues.
+Added: This trend has impacted certain traditional television distribution models, as demonstrated by industrywide declines in broadcast and cable ratings and declines in cable, direct broadcasting satellite and telco television subscribers (“cord cutting”).
Developments in technology and new content delivery products and services have also led to an increased amount of video content, as well as changes in consumers’ expectations regarding the availability of video content and their willingness to pay for access to such content.
These changes include the increase in the number of advertising-based video on demand services or free, ad-supported streaming linear channels (also known as FAST channels) or increased cord-cutting.
+Added: In addition, rules governing new technological developments, such as developments in generative artificial intelligence, remain unsettled, and these developments may affect aspects of our business model, including revenue streams for the use of its intellectual property and how we create and distribute our content.
If we fail to successfully exploit emerging technologies and effectively anticipate or adapt to emerging competitors, content distribution platforms, changes in consumer behavior and shifting business models, this could have a material adverse effect on our competitive position, business, financial condition and results of operations.
−Removed: Our success depends on the appeal and availability of desired programming.
−Removed: Our success depends, in part, upon popularity, viewer preferences and audience acceptance of our content (including STARZ’s and LIONSGATE+’s programming).
−Removed: These preferences are difficult to predict and are subject to influences beyond our control, such as the critical acclaim of our content, the format in which content is released, the talent involved, the genre and specific subject matter of our content, audience reaction to our content, the quality and acceptance of content that our competitors release into the marketplace, and the availability of alternative forms of entertainment and leisure activities (including user-generated content).
−Removed: A change in viewer preferences could cause STARZ’s and LIONSGATE+’s programming to decline in popularity, which could jeopardize renewal of affiliation agreements with distributors.
+Added: Our business depends on the appeal of our programming, which is difficult to predict.
+Added: Our success depends, in part, upon popularity, viewer preferences and audience acceptance of our content.
+Added: These preferences are difficult to predict and some of which are subject to influences beyond our control, such as the critical acclaim of our content, the format in which content is released, the talent involved, the genre and specific subject matter of our content, audience reaction to our content, the quality and acceptance of content that our competitors release into the marketplace, and the availability of alternative forms of entertainment (including user-generated content) and leisure activities, general economic conditions and other tangible and intangible factors.
+Added: We may not be able to anticipate and react effectively to shifts in tastes and interests.
+Added: A change in viewer preferences could cause STARZ’s programming to decline in popularity, which could adversely impact the terms of our affiliation agreements with distributors or jeopardize their renewal.
Reduced popularity of our programs or negative publicity associated with our content or brands may decrease our audience share and viewer reach and could have a material adverse effect on our business, financial condition and results of operations.
In addition, our competitors may have more flexible programming arrangements, as well as greater amounts of available content, distribution and capital resources and may be able to copy our successful programming strategies to our detriment or react more quickly than we can to shifts in tastes and interests.
−Removed: To an increasing extent, the success of STARZ and LIONSGATE+ depends on exclusive original programming and our ability to accurately predict how audiences will respond to our original programming.
+Added: To an increasing extent, the success of STARZ depends on exclusive original programming and our ability to accurately predict how audiences will respond to our original programming.
We must invest substantial amounts in the production and marketing of our original programming before we learn whether such content will reach anticipated audience acceptance levels.
Because original programming often involves a greater degree of financial commitment, as compared to acquired programming that we license from third parties, and because our branding strategies depend significantly on a relatively small number of original series, a failure to anticipate viewer preferences for such series could be especially detrimental to our business.
−Removed: We also compete with other programming networks, including cable television, national broadcast television, local broadcast television stations and digital services to secure desired programming.
−Removed: Some content providers increasingly resist licensing their content to third parties, such as STARZ or LIONSGATE+, which may impede our ability to secure desired programming.
+Added: Our network’s success depends upon the availability of quality programming in a highly competitive marketplace, and we may be unable to secure or maintain such programming.
+Added: STARZ’s success depends upon the availability of quality programming, particularly original programming and films, that is suitable for our target markets.
+Added: We obtain most of our programming through agreements with third parties that have produced or control the rights to such programming.
+Added: These agreements expire at varying times and require us to be in compliance with certain terms.
+Added: The market for video programming is intensely competitive and subject to rapid change;
+Added: we also face increased costs for programming as the result of recent renegotiations of major collective bargaining agreements.
+Added: We compete with other programming services, including cable television, national broadcast television, local broadcast television stations and digital streaming services to secure desired programming.
+Added: Some content providers resist licensing their content to third parties, such as STARZ, which may impede our ability to secure desired programming.
Increased competition may drive up talent and production costs and has required us to increasingly commit to straight-to-series orders for programming instead of pilot orders.
−Removed: If a straight-to-series order does not meet anticipated production or quality
−Removed: standards or is otherwise not accepted by audiences, revisions to the programming may be necessary, which could increase production costs.
+Added: If a straight-to-series order does not meet anticipated production or quality standards or is otherwise not accepted by audiences, revisions to the programming may be necessary, which could increase production costs.
The increased financial commitment for a straight-to-series order also could increase the risks associated with such an order.
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In the event that these agreements expire or are terminated and are not replaced by programming content, including additional original programming, acceptable to our distributors and subscribers, it could have a material adverse effect on our business, financial condition and results of operations.
−Removed: We depend on distributors that carry our STARZ and Lionsgate+ programming, and no assurance can be given that we will be able to maintain and renew these affiliation agreements on as favorable terms or at all.
−Removed: STARZ and LIONSGATE+ currently distribute programming through affiliation agreements with many distributors, including Altice, Amazon, Charter, Comcast, Cox, DIRECTV, DISH Network, Hulu and Verizon.
−Removed: These agreements are scheduled to expire at various dates into 2027 .
+Added: We depend on distributors that carry our STARZ programming, and no assurance can be given that we will be able to maintain and renew these affiliation agreements on as favorable terms or at all.
+Added: STARZ currently distributes programming through affiliation agreements with many distributors, including Altice, Amazon, Charter, Comcast, Cox, DIRECTV, DISH Network, Hulu and Verizon.
+Added: These agreements are scheduled to expire at various dates through 2027.
The largest distributors can have significant leverage in their relationships with certain programmers, including us.
−Removed: If there is further consolidation in the industry, these distributors may have additional leverage in negotiating their affiliation agreements with us, which may result in less favorable terms to us.
−Removed: It is possible that we may be unable to obtain renewals with our current distributors on as favorable terms, if at all, or negotiate affiliation agreements with new distributors to carry our programming.
−Removed: Such failure could result in a discontinuation of carriage, or could otherwise materially adversely affect our subscriber growth, revenue and earnings.
+Added: Moreover, subscription streaming services and other technological innovations have changed when, where and how audiences consume video content.
+Added: These changes pose risks to the traditional U.S.
+Added: television industry, including the disruption of the traditional television content distribution model.
+Added: In part as a result of these changes, over the past few years, the number of subscribers to traditional MVPDs in the United States has declined, placing additional cost pressure on the traditional MVPDs relationships with their programmers, including us.
+Added: These changes and consolidations in the industry may provide distributors additional leverage in negotiating their affiliation agreements with us, which may result in less favorable terms to us, including fee reductions.
+Added: The renewal negotiation process for affiliation agreements is typically lengthy.
+Added: In certain cases, renewals are not agreed upon prior to the expiration of a given agreement, and therefore the distributor could suspend carriage of our programming or the programming could continue to be carried by the relevant distributor pursuant to the terms and conditions in the expired affiliation agreement.
+Added: It is possible that we may be unable to obtain renewals with our current distributors on as favorable terms, if at all.
+Added: It is also possible that we may be unable to successfully negotiate affiliation agreements with new distributors to carry our programming.
+Added: It is also possible that some distributors may even decide to exit the video delivery sector entirely.
+Added: The failure to renew affiliation agreements on as favorable terms, or the failure to negotiate new affiliation agreements at all, in each case covering a significant portion of households, could result in a discontinuation of carriage, or could otherwise impair our subscriber growth, revenue and earnings which could have a materially adverse effect on our business, financial condition and results of operations.
In addition, affiliation agreements are complex and individually negotiated.
−Removed: If we were to disagree with one of the counterparties on the interpretation of an affiliation agreement, it could damage our relationship with that counterparty.
−Removed: Furthermore, we depend on a limited number of major global partners to distribute our content internationally, and the loss of one or more of STARZ and LIONSGATE+ global partners could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Our efforts to attract and retain subscribers for STARZ services may not be successful, which may adversely affect our business.
−Removed: Our ability to continue to attract subscribers will depend in part on our ability to consistently provide compelling content choices, effectively market our services, as well as provide a quality user experience for direct-to-consumer subscribers.
+Added: If we were to disagree with a distributor on the interpretation of its affiliation agreement, it could materially adversely impact our business, financial condition and results of operations, as well damage our relationship with that distributor.
+Added: We depend in part on our distributors to market and present our services, the lack of which may result in reduced customer demand.
At times, certain of our distributors do not allow us to participate in marketing campaigns or other promotional activities to market our services or may not surface or position us favorably on their platforms.
Our inability to participate in the marketing of our services or limited discoverability on distributor platforms may put us at a competitive disadvantage.
−Removed: If our distributors do not sign up new subscribers to our services, we may lose subscribers.
−Removed: Furthermore, we face increasing competition from other streaming providers and our competitors’ relative service levels, content offerings, pricing and related features may adversely impact our ability to attract and retain subscribers.
+Added: If our distributors do not sign-up new subscribers to our services, we may lose subscribers, which could have a materially adverse effect on our business, financial condition and results of operations.
+Added: Our efforts to attract and retain subscribers for STARZ services may not be successful, which may adversely affect our business.
+Added: Our ability to continue to attract subscribers will depend in part on our ability to consistently provide compelling content choices, effectively market our services, as well as provide a quality user experience for our subscribers.
+Added: Furthermore, our competitors’ relative service levels, content offerings, pricing and related features may adversely impact our ability to attract and retain subscribers.
For example, in the future, it is possible that prices for our services may increase, which could result in subscribers cancelling their subscriptions or potential subscribers not choosing to sign up for our services.
−Removed: We continually seek to add new subscriptions both to replace canceled subscriptions and to grow beyond our current subscription base and this may require us to incur significantly higher marketing expenditures than we currently anticipate.
+Added: We incur significant marketing expenditures to attract subscribers, therefore retention of those subscribers is important to our business model.
+Added: We continually seek to add new subscriptions both to replace canceled subscriptions and to grow beyond our current subscription base.
+Added: If excessive numbers of subscribers cancel our services, we may be required to incur significantly higher marketing expenditures than we currently anticipate to replace these subscribers with new subscribers.
While we permit multiple users within the same household to share a single account for noncommercial purposes, if account sharing is abused, our ability to add new subscribers may be hindered and our results of operations may be adversely impacted.
−Removed: If we are unable to successfully compete with current and new competitors in both retaining our existing subscriptions and attracting new subscriptions, our results of operations could be materially adversely affected.
+Added: If we are unable to successfully compete with current and new competitors in both retaining our existing subscriptions and attracting new subscriptions, it could pose a materially adverse effect on our business, financial condition and results of operations.
STARZ relies, in part, on third party sales platforms as well as third-party internet-connected devices for distribution of our direct-to-consumer service.
Our direct-to-consumer service relies, in part, on sales platforms owned by third parties, some of which are affiliated with or have investments in competing streaming products, to make our service available to our subscribers and viewers.
−Removed: If these third parties do not continue to provide access to our direct-to-consumer service on their platforms or are unwilling to do so on terms acceptable to us, our business could be adversely affected.
−Removed: If we are not successful in maintaining existing or creating new relationships with these third parties, our ability to retain subscribers and grow our business could be adversely impacted.
−Removed: We also currently offer the ability to stream our STARZ and LIONSGATE+ direct-to-consumer service through a host of internet-connected devices, including TVs, computers, and mobile devices.
−Removed: If we encounter licensing, technological, regulatory, business or other impediments to delivering our streaming content to our subscribers via these devices, our ability to retain subscribers and grow our business could be adversely impacted.
+Added: If these third parties do not continue to provide access to our direct-to-consumer service on their platforms or are unwilling to do so on terms acceptable to us, our business could be materially adversely affected.
+Added: If we are not successful in maintaining existing or creating new relationships with these third parties, our ability to retain subscribers and grow our direct-to-consumer business could be materially adversely impacted.
+Added: We also currently offer the ability to stream our STARZ direct-to-consumer service through a host of internet-connected devices, including TVs, computers, and mobile devices.
+Added: If we encounter licensing, technological, regulatory, business or other impediments to delivering our streaming content to our subscribers via these devices, our ability to retain subscribers and grow our direct-to-consumer business could be materially adversely impacted.
We are subject to payment processing risk.
−Removed: Subscribers to our STARZ and LIONSGATE+ direct-to-consumer service pay for our service using a variety of different payment methods, including credit and debit cards.
+Added: Subscribers to our STARZ direct-to-consumer service pay for our service using a variety of different payment methods, including credit and debit cards.
We rely on internal systems and those of third parties to process payment.
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To the extent distributors remove us from tiers or packages in which we are currently carried, or we are limited in our ability to be merchandised or marketed effectively, it could have a materially adverse impact on our business, financial condition and results of operations.
−Removed: Moreover, certain of our competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content, large content libraries, and significant financial, marketing and other resources.
−Removed: Certain of our distributors have affiliated video programming services that they may choose to favor in terms of carriage, marketing and/or placement over STARZ of LIONSGATE+.
−Removed: Certain of our distributors also own or control marketing channels, app stores and/or distribution platforms that are important to STARZ and LIONSGATE+.
+Added: Moreover, certain of our competitors have longer operating histories, larger customer bases, stronger brand recognition, larger content libraries, and exclusive rights to certain content, significant financial, marketing and other resources.
+Added: Certain of our distributors have affiliated video programming services that they may choose to favor in terms of carriage, marketing and/or placement over STARZ.
+Added: Certain of our distributors also own or control marketing channels, app stores and/or distribution platforms that are important to STARZ.
In addition, certain programming networks affiliated with broadcast networks like ABC, CBS, Fox or NBC or other programming networks affiliated with sports and certain general entertainment networks with strong viewer ratings, have a competitive advantage over our services in obtaining distribution through the “bundling” of carriage agreements for such programming networks with a distributor’s right to carry the affiliated broadcasting network.
−Removed: If distributors refuse to carry our services, choose to offer, market, promote and/or position affiliated services more favorably than our services or take actions that are detrimental to STARZ and LIONSGATE+ in terms of owned or controlled marketing channels, app stores or distribution platforms, it could have a material adverse effect on our business, financial condition and results of operations.
+Added: If distributors refuse to carry our services, choose to offer, market, promote and/or position affiliated services more favorably than our services or take actions that are detrimental to STARZ in terms of owned or controlled marketing channels, app stores or distribution platforms, it could have a material adverse effect on our business, financial condition and results of operations.
Through new and existing distribution channels, consumers also have increasing options to access entertainment video.
−Removed: Traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet-based e-commerce or entertainment video providers are increasing their streaming video offerings.
+Added: Traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet-based e-
+Added: commerce or entertainment video providers are increasing their streaming video offerings.
Such providers may offer more compelling content or secure better terms from suppliers, adopt more aggressive pricing and devote more resources to product development, technology, infrastructure, content acquisitions and marketing.
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• changes in local regulatory requirements including regulations designed to stimulate local productions, promote and preserve local culture and economic activity (including local content quotas, investment obligations, local ownership requirements, and levies to support local film funds);
−Removed: • differing degrees of consumer protection laws and changes in these laws;
+Added: • differing degrees of consumer protection laws, data privacy and cybersecurity laws and changes in these laws;
• differing degrees of employee or labor laws and changes in these laws that may impact our ability to hire and retain foreign employees;
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• currency exchange restrictions, export controls and currency devaluation risks in some foreign countries;
−Removed: • the spread of communicable diseases (such as the COVID-19 global pandemic), which may impact business in such jurisdictions.
+Added: • war and acts of terrorism;
+Added: • the spread of communicable diseases, which may impact business in such jurisdictions.
Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse business consequences.
+Added: Our business involves risks of claims for content of material, which could adversely affect our business, financial condition and results of operations.
+Added: As a distributor of media content, in the ordinary course of business we may face potential claims for defamation, invasion of privacy, negligence, copyright or trademark infringement, claims related to the mature nature of some of our content, and other claims based on the nature and content of the materials distributed or statements made by personnel or talent regarding or
+Added: promoting those materials or attributable to our business.
+Added: These types of claims have historically been brought, sometimes successfully, against producers and distributors of media content.
+Added: Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business, financial condition and results of operations.
We are subject to risks associated with possible acquisitions, dispositions, business combinations, or joint ventures.
−Removed: From time to time, we engage in discussions and activities with respect to possible acquisitions, sale of assets, business combinations, joint ventures intended to complement or expand our business, or other transactions, such as the proposed spin-off of our studio business, consisting of our Television Production and Motion Picture segments .
+Added: From time to time, we engage in discussions and activities with respect to possible acquisitions, sale of assets, business combinations, joint ventures intended to complement or expand our business, or other transactions, such as our acquisition of eOne in December 2023 or our business combination resulting in the launching of Lionsgate Studios Corp.
+Added: consummated in May 2024.
However, we may not realize the anticipated benefit from the transactions we pursue;
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If we determine to sell individual properties, libraries or other assets or businesses, we will benefit from the net proceeds realized from such sales.
−Removed: However, our revenues may suffer in the long term due to the disposition of a revenue generating asset, or the timing of such dispositions may be poor, causing us to fail to realize the full value of the disposed asset.
+Added: However, long-term revenue may be affected due to the loss of revenue-generating assets, and poor timing of disposals may result in unrealized asset value, all of which may diminish our ability to service our indebtedness and repay our notes and our other indebtedness at maturity.
Furthermore, our future growth may be inhibited if the disposed asset contributed in a significant way to the diversification of our business platform.
+Added: If Entertainment One Canada Ltd.
+Added: loses Canadian status, it could lose licenses, incentives and tax credits.
+Added: Through the acquisition of eOne, we acquired the economic interests in Entertainment One Canada Ltd., a Canadian corporation (“EOCL”).
+Added: EOCL is able to benefit from a number of licenses, incentive programs and Canadian government tax credits as a result of it being “Canadian controlled” as defined in the Investment Canada Act.
+Added: We have taken measures to ensure that EOCL’s Canadian status is maintained.
+Added: There can be no assurance, however, that EOCL will be able to continue to maintain its Canadian status.
+Added: The loss of EOCL’s Canadian status could harm our business, including the possible loss of future incentive programs and clawback of funding previously provided to EOCL.
+Added: We may fail to realize the anticipated benefits of the acquisition of eOne.
+Added: We may not be able to successfully integrate acquired personnel, operations, and technologies, or effectively manage the combined business following the eOne acquisition.
+Added: We also may not achieve the anticipated benefits from the eOne acquisition due to a number of factors, including:
+Added: (a) an inability to integrate or benefit from the acquisition in a profitable manner;
+Added: (b) unanticipated costs or liabilities associated with the acquisition;
+Added: (c) the incurrence of acquisition-related costs;
+Added: (d) the diversion of management’s attention from other business concerns;
+Added: and (e) the loss of our or the acquired business’ key employees.
Our success depends on attracting and retaining key personnel and artistic talent.
−Removed: Our success depends upon the continued efforts, abilities and expertise of our executive teams and other key employees, including production, creative and technical personnel, including, in turn, on our ability to identify, attract, hire, train and retain
−Removed: such personnel.
+Added: Our success depends upon the continued efforts, abilities and expertise of our executive teams and other key employees, including production, creative and technical personnel, including, in turn, on our ability to identify, attract, hire, train and retain such personnel.
We have entered into employment agreements with top executive officers and production executives but do not currently have significant “key person” life insurance policies for any employee.
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For instance, lower household income and decreases in U.S.
−Removed: consumer discretionary spending, which is sensitive to general economic conditions, may affect consumer demand for video service subscriptions, in particular with respect to premium video service subscriptions such as STARZ and LIONGATE+.
+Added: consumer discretionary spending, which is sensitive to general economic conditions, may affect consumer demand for video service subscriptions, in particular with respect to premium video service subscriptions such as STARZ.
Economic conditions also could adversely impact our distributors, resulting in larger than anticipated subscriber declines or distributors exiting the market entirely.
−Removed: A reduction in consumer spending or distributor financial difficulties or failures could lead to a decrease in the number of STARZ or LIONSGATE+ subscribers, which could have a materially adverse impact on our business, financial condition and results of operations.
+Added: A reduction in consumer spending or distributor financial difficulties or failures could lead to a decrease in the number of subscribers, which could have a materially adverse impact on our business, financial condition and results of operations.
Moreover, financial institution failures may make it more difficult to finance any future acquisitions, or engage in other financing activities.
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We are directly or indirectly dependent upon highly specialized union members who are essential to the production of motion pictures and television content, including writers, directors, actors and other talent as well as trade employees and others who are subject to collective bargaining agreements.
−Removed: In general, a labor dispute, work stoppage, work slowdown, strike by, or a lockout of, one or more of the unions that provide personnel essential to the production of motion pictures or television content, including the ongoing strike by the Writers’ Guild of America, and/or potential strikes from the Directors Guild or Screen Actors Guild, could delay or halt our ongoing production activities, or could cause a delay or interruption in our release of new motion pictures and television content.
−Removed: Labor disputes have in the past, and may restrict our access to content, result in work stoppages, and may result in increased costs and decreased revenue, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
+Added: In general, a labor dispute, work stoppage, work slowdown, strike by, or a lockout of, one or more of the unions that provide personnel essential to the production of motion pictures or television content, including a potential strike from The International Alliance of Theatrical Stage Employees, could delay or halt our ongoing production activities, or could cause a delay or interruption in our release of new motion pictures and television content.
+Added: Labor disputes have in the past, such as the industry-wide strike by the Writers Guild of America in May 2023 and the Screen Actors Guild in July 2023, and may in the future restrict our access to content, result in work stoppages, and may result in increased costs and decreased revenue, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
Business interruptions from circumstances or events out of our control could adversely affect our operations.
−Removed: Our operations are vulnerable to outages and interruptions due to fire, floods, power loss, telecommunications failures, war or acts of terrorism, pandemics such as the COVID-19 global pandemic, work stoppages and strikes, and similar events beyond our control.
−Removed: Our headquarters are located in Southern California, which is subject to natural disasters such as earthquakes.
+Added: Our operations are vulnerable to outages and interruptions due to fire, floods, power loss, telecommunications failures, software or hardware failures, loss of data, security breaches, cyberattacks, personnel misconduct or error, war or acts of terrorism, global pandemics, work stoppages and strikes, and similar events beyond our control.
+Added: We have offices located in Southern California, New York and Colorado, which are subject to natural disasters such as earthquakes, wildfires and flooding.
Although we have developed certain plans to respond in the event of a disaster, there can be no assurance that they will be effective in the event of a specific disaster.
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Any losses or damages incurred by us could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
−Removed: Protecting and defending against intellectual property claims may have a material adverse effect on our business.
+Added: Our business is dependent on the maintenance and protection of our intellectual property and pursuing and defending against intellectual property claims may have a material adverse effect on our business.
Our ability to compete depends, in part, upon successful protection of our intellectual property.
−Removed: We attempt to protect proprietary and intellectual property rights to our productions through available copyright and trademark laws and licensing and
−Removed: distribution arrangements with reputable international companies in specific territories and media for limited durations.
+Added: We attempt to maintain and protect our proprietary and intellectual property rights to our productions through available copyright and trademark laws, contractual provisions in our agreements with our employees, contractors and production partners that develop intellectual property on our behalf, and licensing and distribution arrangements with reputable international companies in specific territories and media for limited durations.
Despite these precautions, existing copyright and trademark laws afford only limited practical protection in certain countries where we distribute our products.
As a result, it may be possible for unauthorized third parties to copy and distribute our productions or certain portions or applications of our intended productions, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
+Added: Moreover, there can be no assurance that our content producers or other third parties from whom we have licensed or acquired content, have, in every
+Added: instance, entered into agreements that contain appropriate protections regarding intellectual property, including nondisclosure, “work made for hire” or valid assignment provisions, with each party who has developed intellectual property on their respective behalf.
Litigation may also be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity.
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Additionally, one of the risks of the film and television production business is the possibility that others may claim that our productions and production techniques misappropriate or infringe the intellectual property rights of third parties.
−Removed: From time to time, we are subject to claims and legal proceedings regarding alleged infringement by us of the intellectual property rights (including patents) of third parties.
+Added: Notwithstanding our efforts to obtain all permissions and clearances we deem necessary in relation to the content we create or distribute, from time to time, we may be subject to claims and legal proceedings regarding alleged infringement by us of the intellectual property rights (including patents) of third parties.
+Added: Additionally, our direct-to-consumer service has historically been and continues to be a target for patent infringement allegations from non-practicing patent holders, and new allegations may arise in the future due to technological changes in our service or the streaming industry generally and the rapid rate of issuance of new patents.
+Added: Technology or non-practicing entities may assert their patents, seek royalties, or even enter into litigation seeking substantial damages based on allegations of patent infringement regardless of merit.
+Added: We have and continue to defend vigorously against such allegations.
Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, require the development of alternative technology or business practices, injunctions against us, or payments for licenses or damages.
+Added: We may also enter into licenses or other arrangements to settle and resolve such allegations on commercially reasonable terms where available, though there can be no assurance such agreements can be obtained on acceptable terms.
These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims.
Regardless of the validity or the success of the assertion of any such claims, we could incur significant costs and diversion of resources in enforcing our intellectual property rights or in defending against such claims, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.
−Removed: Our business involves risks of liability claims for content of material, which could adversely affect our business, financial condition and results of operations.
−Removed: As a distributor of media content, we may face potential liability for defamation, invasion of privacy, negligence, copyright or trademark infringement, claims related to the adult nature of some of our content, other claims based on the nature and content of the materials distributed, or statements made by personnel or talent regarding or promoting those materials or attributable to our business.
−Removed: These types of claims have been brought, sometimes successfully, against producers and distributors of media content.
−Removed: Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business and results of operations.
+Added: In addition, we may, from time to time, lose or cease to control certain of our rights in the intellectual property on which we rely.
+Added: Pursuant to applicable intellectual property laws, such rights may expire or be transferred to third parties as a result of the operation of copyright reversion and/or termination of transfer rights under applicable laws.
+Added: Additionally, where we acquire rights in certain properties or content, we may only acquire such rights for a limited period or subject to other restrictions.
+Added: Where we lose intellectual property rights, we may not be able to re-acquire such rights on reasonable terms or at all, including due to material entering the public domain.
+Added: The loss of (or of control of) such intellectual property rights may adversely impact our ability to prevent others from exploiting content based on such rights.
+Added: We are, and may in the future become, subject to litigation and other legal proceedings, which could negatively impact our business, financial condition and results of operations.
+Added: From time to time, we are subject to various legal proceedings (including class action lawsuits), claims, regulatory investigations and arbitration proceedings, including claims relating to intellectual property, employment, wage and hour, consumer privacy, contractual and commercial disputes, and the production, distribution, and licensing of our content.
+Added: The outcome of legal proceedings are inherently uncertain.
+Added: Any proceedings, actions, claims or inquiries initiated by or against us, whether successful or not, may be time consuming, result in costly litigation, damage awards, consent decrees, injunctive relief or increased costs of business, require us to change our business practices or products, result in negative publicity, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm our business and financial results.
+Added: In addition, our insurance may not be adequate to protect us from all material expenses related to pending and future claims.
+Added: Any of these factors could materially adversely affect our business, financial condition and results of operations.
Piracy of films and television programs could adversely affect our business over time.
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This trend facilitates the creation, transmission and sharing of high-quality unauthorized copies of motion pictures and television content.
−Removed: The proliferation of unauthorized copies of these products has had and will likely continue to have an adverse effect on our business, because these products reduce the revenue we receive from our products.
+Added: proliferation of unauthorized copies of these products has had and will likely continue to have an adverse effect on our business, because these products may reduce the revenue we receive from distribution.
In order to contain this problem, we may have to implement elaborate and costly security and anti-piracy measures, which could result in significant expenses and losses of revenue.
We cannot assure you that even the highest levels of security and anti-piracy measures will prevent piracy.
−Removed: Service disruptions or failures of the Company’s or our third-party service providers’ information systems and networks may disrupt our businesses, damage our reputation, expose us to regulatory investigations, actions, litigation, fines and penalties or have a negative impact on our results of operations including but not limited to loss of revenue or profit, loss of customers or sales and other adverse consequences.
−Removed: In the ordinary course of our business, we and the third parties in which we rely process proprietary, confidential, and sensitive data, including personal information, intellectual property, and trade secrets (collectively, sensitive information).
−Removed: Our ability to monitor third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
−Removed: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive
−Removed: information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
−Removed: Threats such as cyberattacks, malicious internet-based activity, and online and offline fraud are becoming more prevalent and are increasingly difficult to detect.
−Removed: These threats come from a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.
−Removed: We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks, malicious code, malware (, denial-of-service attacks, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures and other similar threats.
−Removed: In particular, ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.
−Removed: Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
−Removed: Similarly, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
−Removed: Further, a partially remote workforce created by the COVID-19 global pandemic poses increased risks to our information technology systems and data, as certain employees work from home on a full or part-time basis, utilizing network connections outside our premises.
−Removed: Business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
−Removed: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information.
−Removed: A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our services.
−Removed: We may expend significant resources or modify our business activities to try to protect against security incidents.
−Removed: Certain data privacy and security obligations may require us to implement and maintain specific security measures, industry-standard or reasonable security measures to protect our information technology systems and sensitive information.
−Removed: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
−Removed: We take steps to detect and remediate vulnerabilities, but may not be able to detect and remediate all vulnerabilities because the threat and techniques used to exploit change frequently and are often sophisticated in nature.
−Removed: Therefore, such vulnerabilities could be exploited but, may not be detected until after a security incident has occurred.
−Removed: These vulnerabilities pose material risk to our business.
−Removed: Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.
−Removed: Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.
−Removed: Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.
−Removed: If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as:
−Removed: government enforcement actions (;
−Removed: additional reporting requirements and/or oversight;
−Removed: restrictions on processing sensitive information;
−Removed: indemnification obligations;
−Removed: negative publicity;
−Removed: reputational harm;
−Removed: monetary fund diversions;
−Removed: interruptions in our operations;
−Removed: financial loss;
−Removed: and other similar harms.
−Removed: Security incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
−Removed: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
−Removed: We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
−Removed: Shutdowns or service disruptions of our information systems or network caused by power outages, natural disasters, extreme weather, terrorist attacks, pandemics (such as the COVID-19 global pandemic), wars (such as Russia’s invasion of Ukraine), or other similar events pose increasing risks.
−Removed: Shutdowns or disruption from such events could have an adverse impact on us and our customers, including degradation or disruption of service, loss of data, release or threatened release of data publicly, misuse or threatened misuse of data, and damage to equipment and data.
−Removed: System redundancy may be ineffective or inadequate, and our disaster recovery planning may not be sufficient to cover everything that could happen.
−Removed: Significant events could result in a disruption of our operations, reduced revenues, the loss of or damage to the integrity of data used by management to make decisions and operate our business, damage to our reputation or brands or a loss of customers.
−Removed: We may not have adequate insurance coverage to compensate it for any losses associated with such events.
Failure of, or disruptions to, our technology facilities could adversely affect our business.
−Removed: STARZ’s programming is currently transmitted from STARZ’s uplink center in Englewood, Colorado.
−Removed: STARZ uses this center for a variety of purposes, including signal processing, satellite uplinking, program editing, on-air promotions, creation of programming segments (i.e., interstitials) to fill short gaps between featured programs, quality control and live and recorded playback.
−Removed: STARZ is moving its primary uplink facilities from the Englewood location and is outsourcing them to a third party starting in the fall of 2023.
−Removed: Primary uplink facilities used by STARZ are equipped with backup generator power and other redundancies.
+Added: STARZ’s programming is currently transmitted from primary uplink facilities provided by a third party.
+Added: The primary uplink facilities used by STARZ are equipped with backup generator power and other redundancies.
However, like other facilities, uplink facilities are subject to interruption from fire, adverse weather conditions and other natural causes.
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Notwithstanding these precautions, any significant or prolonged interruption of operations at STARZ’s primary facility, and any failure by STARZ’s back-up third-party facility to perform as intended, could have a materially adverse effect on our business, financial condition and results of operations.
−Removed: STARZ’s success in the U.S.
−Removed: is also dependent upon our continued ability to transmit STARZ’s programming to distributors.
+Added: STARZ’s success is also dependent upon our continued ability to transmit STARZ’s programming to distributors.
STARZ has entered into multi-year satellite transponder leases for carriage of the STARZ networks’ programming.
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Data Privacy and Security.
−Removed: In the ordinary course of its business, we collect, generate, use, store, process, disclose, transmit, share and transfer (collectively “processing”) personal information and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, and sensitive third-party data, through our websites and applications and those of third parties.
+Added: In the ordinary course of its business, we collect, generate, use, store, process, disclose, transmit, share and transfer (collectively “process”) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, and third-party data, through our websites and applications and those of third parties.
Among other purposes, we use this information to engage with users, promote our programming, and monitor the use of our digital platforms.
−Removed: Our collection and use of personal information may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security .
−Removed: In the U.S, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws.
−Removed: For example, the California Consumer Privacy Act of 2018 (“CCPA”) applies to personal information of consumers, business representatives, and employees, and requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights.
−Removed: The CCPA allows for civil penalties (up to $7,500 per violation) and allows private litigants affected by certain data breaches to recover significant statutory damages.
−Removed: In addition, the California Privacy Rights Act of 2020 (“CPRA”), expands the CCPA’s requirements, including by adding a new right for individuals to correct their personal information and establishing a new regulatory agency to implement and enforce the law.
−Removed: Other states, including Colorado and Virginia have passed comprehensive privacy laws, and similar laws are being considered in several other states, as well as at the federal and local levels.
+Added: Our collection and use of personal data may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
+Added: In the U.S, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act and the Controlling the Assault of Non-Solicited Pornography and Marketing Act ), and other similar laws (e.g., wiretapping laws ) .
+Added: For example, in the past few years, numerous U.S.
+Added: states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
+Added: As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.
+Added: The exercise of these rights may impact our
+Added: business and ability to provide our products and services.
+Added: Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.
+Added: These state laws allow for statutory fines for noncompliance.
+Added: For example, the California Consumer Privacy Act of 2018 (“CCPA”) allows for civil penalties (up to $7,500 per intentional violation).
+Added: Similar laws are being considered in several other states, as well as at the federal and local levels.
These developments further complicate compliance efforts and increase legal risk and compliance costs for us and the third parties upon whom we rely.
Outside the U.S, an increasing number of laws, regulations, and industry standards apply to data privacy and security.
−Removed: For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No.
+Added: For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR” and together with the EU GDPR, the “EU GDPR”), the EU Digital Services Act, Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No.
13,709/2018) and Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) impose strict requirements for processing personal data.
−Removed: For example, under the EU GDPR, companies may face temporary or definitive bans on data processing and other corrective actions;
−Removed: fines of up to 20 million Euros or 4% of annual global revenue, whichever is greater;
+Added: For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions;
+Added: fines of up to 20 million Euros (under the EU GDPR), 17.5 million pounds sterling (under the UK GDPR), or 4% of annual global revenue, whichever is greater;
or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
−Removed: Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data.
−Removed: Our inability or failure to do so could result in adverse consequences.
+Added: As another example, in Canada, PIPEDA and various related provincial laws, as well as Canada’s Anti-Spam Legislation (“CASL”), may apply to our operations, as well as the LGPD in Brazil.
+Added: The LGPD broadly regulates processing personal data of individuals in Brazil and imposes compliance obligations and penalties comparable to those of the GDPR.
+Added: Additionally, regulators are increasingly scrutinizing companies that process children’s data.
+Added: Numerous laws, regulations, and legally-binding codes, such as the Children’s Online Privacy Protection Act (“COPPA”), California’s Age Appropriate Design Code, CCPA, other U.S.
+Added: state comprehensive privacy laws, GDPR, and the UK Age Appropriate Design Code impose various obligations on companies that process children’s data, including requiring certain consents to process such data and extending certain rights to children and their parents with respect to that data.
+Added: Some of these obligations have wide ranging applications, including for services that do not intentionally target child users (defined in some circumstances as a user under the age of 18 years old).
+Added: These laws may be, or in some cases, have already been, subject to legal challenges and changing interpretations, which may further complicate our efforts to comply with these laws.
+Added: We may be subject to new laws governing the processing of consumer health data, including by providing for reproductive, sexual orientation, and gender identity privacy rights.
+Added: For example, Washington’s My Health My Data Act (“MHMD”) broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law.
+Added: Other states are considering and may adopt similar laws.
+Added: Additionally, under various privacy laws (such as the Video Privacy Protection Act) and other obligations, we may be required to obtain certain consents to process personal data.
+Added: Noncompliance with such obligations are increasingly subject to challenges by class action plaintiffs.
+Added: Our inability or failure to obtain such consents could result in adverse consequences.
In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the U.S.
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Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the U.S.
−Removed: in compliance with law, such as the EEA and UK’s standard contractual clauses, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the U.S.
+Added: in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
+Added: Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the U.S.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against processing or transferring of personal data necessary to operate our business.
−Removed: Additionally, some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of the EEA for allegedly violating the GDPR’s cross-border data transfer limitations.
+Added: Additionally, companies that transfer personal data out of the EEA and UK to
+Added: other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.
+Added: Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of the EEA for allegedly violating the GDPR’s cross-border data transfer limitations.
We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
−Removed: For example, certain privacy laws, such as the GDPR and the CCPA, require specific contractual restrictions on service providers.
−Removed: We publish privacy policies, marketing materials and other statements regarding data privacy and security.
+Added: For example, we are contractually subject to industry standards adopted by industry groups, such as the Payment Card Industry Data Security Standard (“PCI DSS”).
+Added: The PCI DSS requires companies to adopt certain measures to ensure the security of cardholder information, including using and maintaining firewalls, adopting proper password protections for certain devices and software, and restricting data access.
+Added: Noncompliance with PCI-DSS can result in penalties ranging from fines of $5,000 to $100,000 per month by credit card companies, litigation, damage to our reputation, and revenue losses.
+Added: We also rely on third parties to process payment card data, who may be subject to PCI DSS, and our business may be negatively affected if these parties are fined or suffer other consequences as a result of PCI DSS noncompliance.
+Added: Moreover, we publish privacy policies, marketing materials and other statements regarding data privacy and security, including as required by applicable laws and regulations.
If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
−Removed: Obligations related to data privacy and security are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.
+Added: Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.
Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
−Removed: Preparing for and complying with these obligations requires significant resources and may necessitate changes to its information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
+Added: Preparing for and complying with these obligations requires significant resources and may necessitate changes to our information systems, policies and practices and to those of any third parties upon which we rely.
We may at times fail (or be perceived to have failed) in efforts to comply with data privacy and security obligations.
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government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
−Removed: litigation (including class-action claims);
+Added: litigation (including class-action claims) and mass arbitration demands;
additional reporting requirements and/or oversight;
−Removed: bans on processing personal data;
+Added: bans or restrictions on processing personal data;
or orders to destroy or not use personal data.
+Added: In particular, plaintiffs have become increasingly active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.
+Added: Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
Any of these events could have a material adverse effect on our reputation, business, or financial condition, including, but not limited to:
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The continued growth and development of the market for online commerce may lead to more stringent consumer protection laws both domestically and internationally, which may impose additional burdens on us.
−Removed: United States some examples include the Children's Online Privacy Protection Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, and the Video Privacy Protection Act.
In addition, many states have enacted laws regulating automatically renewing online subscription services.
If authorities start taking increased enforcement action related to statutes governing perceived unfair deceptive acts and practices, we could suffer additional costs, complaints and/or regulatory investigations or fines.
+Added: Several of these laws also have private rights of action.
+Added: Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, reputational harm, and other adverse business consequences.
Other changes in consumer protection laws and the interpretations thereof, could have a materially adverse effect on our business, financial condition and results of operations.
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Under the Communications Act of 1934 and the 1992 Cable Act, there are certain FCC regulations that govern the distribution of our services by traditional MVPDs, including cable, DBS and telco operators.
−Removed: Furthermore, to the extent that regulations and laws, either presently in force or proposed, hinder or stimulate the growth of the cable television and satellite industries, our network business will be affected.
+Added: Furthermore, to the extent that regulations and laws, either presently in force or proposed, hinder or stimulate the growth of the cable television and
+Added: satellite industries, our network business will be affected.
As we continue to expand internationally, we also may be subject to varying degrees of local government regulations.
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Other changes in laws relating to the internet or other areas of our business and the interpretations thereof could cause us to incur additional expenses or otherwise negatively affect our business.
−Removed: Additionally, as we grow our STARZ and LIONSGATE+ direct-to-consumer business, we may be subject to additional consumer legal claims and state and local consumer protection regulation.
+Added: Additionally, as we grow our STARZ direct-to-consumer business, we may be subject to additional consumer legal claims and state and local consumer protection regulation.
We rely upon the ability of consumers to access our service through the internet.
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Given uncertainty around these rules, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.
+Added: Service disruptions or failures of the Company’s or our third-party service providers’ information systems, data and networks may disrupt our businesses, damage our reputation, expose us to regulatory investigations, actions, litigation, fines and penalties or have a negative impact on our results of operations including but not limited to loss of revenue or profit, loss of customers or sales and other adverse consequences.
+Added: In the ordinary course of our business, we and the third parties on which we rely process proprietary, confidential, and sensitive data, including personal data, intellectual property, and trade secrets (collectively, sensitive information).
+Added: Threats such as cyberattacks, malicious internet-based activity, and online and offline fraud are becoming more prevalent and are increasingly difficult to detect.
+Added: These threats come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.
+Added: Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
+Added: During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
+Added: We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by artificial intelligence, and other similar threats.
+Added: In particular, ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.
+Added: Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
+Added: Further, a partially remote workforce poses increased risks to our information technology systems and data, as certain employees work from home on a full or part-time basis, utilizing network connections outside our premises.
+Added: Business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
+Added: Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
+Added: We rely on third parties to operate critical business systems to process proprietary, confidential or other sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure (for more, see the Risk Factor titled “ We rely upon “cloud” computing services to operate certain aspects of our service and any disruption of or interference with our use of our “cloud” computing servicer could impact our operations and our business could be adversely impacted.
+Added: ” ) , data center facilities, encryption and authentication technology, employee email, servers, content delivery systems, and other functions.
+Added: Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
+Added: If these third parties experience a security incident or other interruption, we could experience adverse consequences.
+Added: While we may be entitled to damages if these third parties fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
+Added: Similarly, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
+Added: We take steps to detect, mitigate and remediate vulnerabilities in our information systems (such as our hardware or software) and those of the third parties upon which we rely, but we may not be able to detect and remediate (or have our third-party service providers remediate) all such vulnerabilities on a timely basis, or at all.
+Added: Further, we may experience delays in developing and deploying remedial measures and patches designed to address any such identified vulnerabilities.
+Added: If not remediated expeditiously, vulnerabilities could be exploited and result in a security incident.
+Added: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information.
+Added: A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our services.
+Added: We may expend significant resources or modify our business activities to try to protect against security incidents.
+Added: Certain data privacy and security obligations may require us to implement and maintain specific industry-standard or reasonable security measures to protect our information technology systems and sensitive information.
+Added: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
+Added: Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
+Added: Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.
+Added: If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as:
+Added: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
+Added: additional reporting requirements and/or oversight;
+Added: restrictions on processing sensitive information;
+Added: indemnification obligations;
+Added: negative publicity;
+Added: reputational harm;
+Added: monetary fund diversions;
+Added: interruptions in our operations;
+Added: financial loss;
+Added: and other similar harms.
+Added: Security incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
+Added: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
+Added: We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
+Added: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
Risks Related To Our Indebtedness
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We currently have a substantial amount of indebtedness.
−Removed: As of March 31, 2023, we and our subsidiaries have corporate debt of approximately $2,059.9 million, and film related obligations of approximately $2,035.1 million, and our revolving credit facility provides for unused commitments of $1.25 billion.
+Added: As of March 31, 2024, we and our subsidiaries have corporate debt of approximately $2,508.5 million, and film related obligations of approximately $1,949.4 million, and our revolving credit facility provides for unused commitments of $675.0 million.
On the same basis, approximately $1,793.5 million of such indebtedness is secured (excluding all of our film related obligations).
Our high level of debt could have adverse consequences on our business, such as:
−Removed: making it more difficult for us to satisfy our obligations with respect to our notes and our other debt;
−Removed: limiting our ability to refinance such indebtedness or to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;
−Removed: requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;
−Removed: increasing our vulnerability to global pandemics, economic downturns and adverse developments in our business;
−Removed: exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the revolving credit facility, Term Loan A and Term Loan B (the "Senior Credit Facilities"), and borrowings under our film related obligations, are at variable rates of interest;
−Removed: limiting our flexibility in planning for, and reducing our flexibility in reacting to, changes in the conditions of the financial markets and our industry;
−Removed: placing us at a competitive disadvantage compared to other, less leveraged competitors;
+Added: • requiring a substantial portion of our cash flow from operations to make interest payments;
+Added: • making it more difficult for us to satisfy debt service and other obligations;
+Added: • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing;
+Added: • reducing cash flow available for working capital, capital expenditures, acquisitions and other general corporate purposes;
+Added: • increasing our vulnerability to general adverse economic and industry conditions;
+Added: • limiting our flexibility in planning for, or reacting to, changes in our business and the industry;
+Added: • placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt;
• increasing our cost of borrowing;
−Removed: and restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness and exposing us to potential events of default (if not cured or waived) under covenants contained in our debt instruments.
+Added: • restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness and exposing us to potential events of default (if not cured or waived) under covenants contained in our debt instruments.
+Added: To the extent that we incur additional indebtedness, the foregoing risks could increase.
+Added: In addition, our actual cash requirements in the future may be greater than expected.
+Added: our cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt.
We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
−Removed: A significant portion of our cash flows from operations is expected to be dedicated to the payments of principal and interest obligations under the Senior Credit Facilities and our 5.500% Senior Notes (the "Senior Notes").
+Added: A significant portion of our cash flows from operations is expected to be dedicated to the payments of principal and interest obligations under the Senior Credit Facilities, our 5.500% senior notes due 2029 (the "5.500% Senior Notes"), and our 5.500% New Notes (the "5.500% New Notes").
+Added: 5.500% New Notes refer to $382.7 million aggregate principal amount of new 5.500% senior notes due 2029 issued by an indirect, wholly-owned subsidiary of the Company on May 8, 2024, exchanged by the Company for $382.7 million of the existing 5.500% Senior Notes.
Our ability to make scheduled payments on or refinance our debt obligations will depend on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control, including global pandemics, wars and their effects.
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We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.
−Removed: The Senior Credit Facilities and the indenture that governs the Senior Notes restrict our ability to dispose of assets and use the proceeds from those dispositions, and also restrict our ability to raise debt or certain types of equity to be used to repay other indebtedness when it becomes due.
+Added: The Senior Credit Facilities and the indenture that governs the New Notes restrict our ability to dispose of assets and use the proceeds from those dispositions, and also restrict our ability to raise debt or certain types of equity to be used to repay other indebtedness when it becomes due.
We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
1 unchanged sentence
Future downgrades could further adversely affect our cost of funds and related margins, liquidity, competitive position and access to capital markets, and a significant downgrade could have an adverse commercial impact on our business.
−Removed: In addition, we conduct a substantial portion of our operations through our subsidiaries, certain of which are not guarantors of the Senior Notes or our other indebtedness.
−Removed: Accordingly, repayment of our indebtedness, including the Senior Notes, is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise.
−Removed: Unless they are guarantors of the Senior Notes or our other indebtedness, our subsidiaries do not have any obligation to pay amounts due on the Senior Notes or our other indebtedness or to make funds available for that purpose.
−Removed: Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the Senior Notes.
−Removed: While the Senior Credit Facilities and the indentures that govern the Senior Notes limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions.
+Added: In addition, we conduct a substantial portion of our operations through our subsidiaries, certain of which are not guarantors of the Senior Notes, New Notes or our other indebtedness.
+Added: Accordingly, repayment of our indebtedness, including the Senior Notes and New Notes, is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise.
+Added: Unless they are guarantors of the Senior Notes, New Notes or our other indebtedness, our subsidiaries do not have any obligation to pay amounts due on the Senior Notes, New Notes or our other indebtedness or to make funds available for that purpose.
+Added: Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the Senior Notes and New Notes.
+Added: While the Senior Credit Facilities and the indenture that governs the New Notes limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions.
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.
2 unchanged sentences
We and our subsidiaries may be able to incur significant additional indebtedness in the future.
−Removed: Although the Senior Credit Facilities and the indenture that governs the Senior Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
−Removed: These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the indenture governing the Senior Notes, such as certain qualified receivables financings.
+Added: Although the Senior Credit Facilities and the indenture that governs the New Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
+Added: These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the indenture governing the New Notes, such as certain qualified receivables financings.
If new debt is added to our current debt levels, the related risks that we and our guarantors now face could intensify.
−Removed: The terms of the Senior Credit Facilities and the indenture that governs the Senior Notes restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
−Removed: The Senior Credit Facilities and the indenture that governs the Senior Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to:
+Added: The terms of the Senior Credit Facilities and the indenture that governs the New Notes restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
+Added: The Senior Credit Facilities and the indenture that governs the New Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to:
incur, assume or guarantee additional indebtedness;
1 unchanged sentence
pay dividends or distributions or redeem or repurchase capital stock;
−Removed: prepay, redeem or repurchase debt that is junior in right of payment to the debt under the Senior Credit Facilities and the Senior Notes;
+Added: prepay, redeem or repurchase debt that is junior in right of payment to the debt under the Senior Credit Facilities and the New Notes;
make loans or investments;
restrict dividends, loans or asset transfers from our restricted subsidiaries;
−Removed: sell or otherwise dispose of assets,
−Removed: including capital stock of subsidiaries and sale/leaseback transactions;
+Added: sell or otherwise dispose of assets, including capital stock of subsidiaries and sale/leaseback transactions;
consolidate or merge with or into, or sell substantially all of our assets to, another person;
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as such, we may be unable to meet such financial ratios.
−Removed: A breach of the covenants under the Senior Credit Facilities or the indenture that governs the Senior Notes, or nonpayment of any principal or interest due thereunder, could result in an event of default under the applicable indebtedness.
+Added: A breach of the covenants under the Senior Credit Facilities or the indentures that governs the Senior Notes and the New Notes, or nonpayment of any principal or interest due thereunder, could result in an event of default under the applicable indebtedness.
Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
3 unchanged sentences
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
−Removed: Borrowings under the Senior Credit Facilities and advances under our production and related loans and IP Credit Facility are at variable rates of interest and expose us to interest rate risk, which could increase the cost of capital.
+Added: Certain of our borrowings, primarily borrowings under the Senior Credit Facilities, and our film related obligations, are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk.
If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
1 unchanged sentence
The agreements governing certain of our long-term indebtedness contain change in control provisions that are triggered when any of our shareholders, directly or indirectly, acquires ownership or control of in excess of a certain percentage of the total voting power of our Class A voting common shares, no par value per share (the "Class A voting shares").
−Removed: Upon the occurrence of certain change of control events, an event of default may occur under our Senior Credit Facilities and the holders of the Senior Notes may require us to repurchase all or a portion of such notes.
+Added: Upon the occurrence of certain change of control events, an event of default may occur under our Senior Credit Facilities and the holders of the New Notes may require us to repurchase all or a portion of such notes.
Rachesky, M.D.
−Removed: and his affiliates, who collectively currently hold over 24% of our voting stock and over 10% of our non-voting common stock are “Permitted Holders” for purposes of the Senior Credit Facilities and the indentures that govern the Senior Notes.
+Added: and his affiliates, who collectively currently hold over 24% of our voting stock and over 10% of our non-voting common stock are “Permitted Holders” for purposes of the Senior Credit Facilities and the indentures that govern the Senior Notes and the New Notes.
Accordingly, certain increases of ownership or other transactions involving Dr.
−Removed: Rachesky and his affiliates would not constitute a change of control under the Senior Credit Facilities or the indenture that governs the Senior Notes, but could constitute a change of control under the other existing or future indebtedness of us and our subsidiaries.
+Added: Rachesky and his affiliates would not constitute a change of control under the Senior Credit Facilities or the indentures that govern the Senior Notes and the New Notes, but could constitute a change of control under the other existing or future indebtedness of us and our subsidiaries.
Risk Related to Tax Rules and Regulations
18 unchanged sentences
If the Section 7874 ownership percentage of the STARZ stockholders in Lions Gate after the merger was less than 80% but at least 60% (the “60% ownership test”), and the substantial business activities test was not met, STARZ and its U.S.
−Removed: (including the U.S.
+Added: affiliates (including the U.S.
affiliates historically owned by us) may, in some circumstances, be subject to certain adverse U.S.
53 unchanged sentences
Congress, the Organisation for Economic Co-operation and Development (“OECD”) and other government agencies in jurisdictions where we and our affiliates will conduct business have had an extended focus on issues related to the taxation of multinational corporations.
−Removed: For the past several years, the primary focus has been in the area of “base erosion and profit
−Removed: shifting,” including situations where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
+Added: For the past several years, the primary focus has been in the area of “base erosion and profit shifting,” including situations where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
As part of its so-called Base Erosion and Profit Shifting (“BEPS”) project, OECD and the G-20 developed changes to numerous long-standing international tax principles.
33 unchanged sentences
In addition, due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change.
−Removed: Our future effective tax rates could be affected by changes in tax laws or regulations or the interpretation thereof (including those affecting the allocation of profits and expenses to differing jurisdictions), by changes in the amount of revenue or earnings that we derive
−Removed: from international sources in countries with high or low statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, by changes in the expected timing and amount of the release of any tax valuation allowance, or by the tax effects of stock-based compensation.
+Added: Our future effective tax rates could be affected by changes in tax laws or regulations or the interpretation thereof (including those affecting the allocation of profits and expenses to differing jurisdictions), by changes in the amount of revenue or earnings that we derive from international sources in countries with high or low statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, by changes in the expected timing and amount of the release of any tax valuation allowance, or by the tax effects of stock-based compensation.
Unanticipated changes in our effective tax rates could affect our future results of operations.
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Any adverse outcome from any examinations may have an adverse effect on our business and operating results, which could cause the market price of our securities to decline.
−Removed: UNRESOLVED STAFF COMMENTS.
−Removed: Not applicable.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.