Item 1. Business
ITEM 1. BUSINESS.
Overview
Lionsgate (NYSE: LGF.A, LGF.B) encompasses world-class motion picture and television studio operations aligned with the STARZ premium global subscription platform designed to bring a unique and varied portfolio of entertainment to consumers around the world. Our film, television, subscription and location-based entertainment businesses are backed by a more than 20,000-title library and a valuable collection of iconic film and television franchises.
We manage and report our operating results through three reportable business segments: Motion Picture , Television Production and Media Networks . We refer to our Motion Picture and Television Production segments collectively as our Studio Business and our Media Networks segment as our Media Networks Business . Financial information for our segments is set forth in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this Annual Report.
On May 13, 2024, we consummated the business combination which resulted in the launch of Lionsgate Studios. As of May 14, 2024, the common shares of our Studio Business trades on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “LION.” See Business Combination below for additional information.
Studio Business
Motion Picture: Our Motion Picture segment includes revenues derived from the following:
• Theatrical . The domestic theatrical release of motion pictures licensed to theatrical exhibitors on a picture-by-picture basis (distributed by us directly in the U.S. and through a sub-distributor in Canada). The revenues from Canada are reported net of distribution fees and release expenses of the Canadian sub-distributor. The financial terms that we negotiate with our theatrical exhibitors in the U.S. generally provide that we receive a percentage of the box office results.
• Home Entertainment . The sale or rental of our film productions and acquired or licensed films and certain television programs (including theatrical and direct-to-video releases) on packaged media and through digital media platforms (including pay-per-view and video-on-demand platforms, electronic sell through, and digital rental). In addition, we have revenue sharing arrangements with certain digital media platforms which generally provide that, in exchange for a nominal or no upfront sales price, we share in the rental or sales revenues generated by the platform on a title-by-title basis.
• Television . The licensing of our theatrical productions and acquired films to the linear pay, basic cable and free television markets. In addition, when a license in our traditional pay television window is made to a subscription video-on-demand ("SVOD") or other digital platform, the revenues are included here.
• International. The (i) licensing of our productions, acquired films, our catalog product and libraries of acquired titles to international distributors, on a territory-by-territory basis, and (ii) the direct distribution of our productions, acquired films, and our catalog product and libraries of acquired titles in the United Kingdom.
• Other . Among others, the licensing of our film and television and related content (e.g., games, music, location-based entertainment royalties, etc.) to other ancillary markets.
Television Production: Our Television Production segment includes revenues derived from the following:
• Television. The licensing to domestic markets (linear pay, basic cable, free television and syndication) of scripted and unscripted series, television movies, mini-series and non-fiction programming. Television revenues include fixed fee arrangements as well as arrangements in which we earn advertising revenue from the exploitation of certain content on television networks. Television revenues also include revenue from licenses to SVOD platforms in which the initial license of a television series is to an SVOD platform.
• International. The licensing and syndication to international markets of scripted and unscripted series, television movies, mini-series and non-fiction programming.
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• Home Entertainment. The sale or rental of television production movies or series on packaged media and through digital media platforms.
• Other . Among others, the licensing of our television programs to other ancillary markets, the sales and licensing of music from the television broadcasts of our productions, and from commissions and executive producer fees earned related to talent management.
Media Networks
Our Media Networks segment includes revenues derived from the following:
• Starz Networks. The domestic distribution of our STARZ branded premium subscription video services through over-the top ("OTT") streaming platforms and distributors, on a direct-to-consumer basis through the Starz app, and through U.S. multichannel video programming distributors (“MVPDs”) including cable operators, satellite television providers and telecommunications companies (collectively, “Distributors”) (and in the aggregate, the “Starz Domestic Platform”).
• LIONSGATE+ . The OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S.
The Starz Domestic Platform together with the LIONSGATE+ platforms are referred to as the “Starz Platforms.”
Segment Revenue
For the year ended March 31, 2024, contributions to the Company’s consolidated revenues from its reporting segments included Motion Picture 41.2%, Television Production 33.1% and Media Networks 39.2%, and intersegment revenue eliminations represented (13.6)% of consolidated revenues.
Within the Motion Picture segment, revenues were generated from the following:
• Theatrical, 13.7%;
• Home Entertainment, 44.4%;
• Television, 16.6%;
• International, 23.6%; and
• Motion Picture-Other, 1.7%.
Within the Television Production segment, revenues were generated from the following:
• Television, 59.3%;
• International, 17.2%;
• Home Entertainment, 18.2%; and
• Television Production-Other, 5.3%.
Within the Media Networks segment, revenues were generated from the following:
• Starz Networks, 86.6%;
• LIONSGATE+, 13.4%
Corporate Strategy
We manage a large and diversified portfolio of film and television content that we license to theatrical exhibitors, streaming, broadcast, pay cable and other platform partners worldwide. We maintain a disciplined, targeted and cost-effective approach to the acquisition, production, marketing and distribution of that content. Our strategic focus on content makes us a preferred supplier to third-party buyers as well as our own STARZ platform. The extension of our portfolio of brands and franchises, creation of new intellectual properties and rigorous focus on retaining key rights to our content is designed to create incremental long-term value for our shareholders through a combination of current releases and one of the most valuable film and television libraries in the world.
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STUDIO BUSINESS: MOTION PICTURE
Motion Picture - Theatrical
Production and Acquisition
We take a disciplined approach to theatrical production, with the goal of producing content that can be distributed through various domestic and international platforms. In doing so, we may mitigate the financial risk associated with production by:
• Negotiating co-financing development and co-production agreements which may provide for cost-sharing with one or more third-parties;
• Pre-licensing international distribution rights on a selective basis, including through international output agreements (which license rights to distribute a film in one or more media generally for a limited term, and in one or more specific territories prior to completion of the film);
• Structuring agreements that provide for talent participation in the financial success of the film in exchange for reduced guaranteed “up-front payments” that would be paid regardless of the film's success; and
• Utilizing governmental incentives, programs and other structures from state and foreign countries (e.g., sales tax refunds, transferable tax credits, refundable tax credits, low interest loans, direct subsidies or cash rebates, calculated based on the amount of money spent in the particular jurisdiction in connection with the production).
Our approach to acquiring films complements our theatrical production strategy - we typically seek to limit our financial exposure while adding films with high potential for commercial box office success, critical recognition and successful monetization across a broad array of platforms.
Distribution
The economic life of a motion picture may consist of its exploitation in theaters, on packaged media and on various digital and television platforms in territories around the world. We generally distribute motion pictures directly to movie theaters in the U.S. whereby the exhibitor retains a portion of the gross box office receipts and the balance is remitted to the distributor. Concurrent with their release in the U.S., films are generally released in Canada and in one or more foreign countries. We construct release schedules taking into account moviegoer attendance patterns and competition from other studios' scheduled theatrical releases. After initial theatrical release, distributors seek to maximize revenues by releasing films in sequential release date windows, which may be exclusive against other non-theatrical distribution platforms. In certain circumstances, our distribution strategy has and may continue to change, and certain films intended for theatrical release may be licensed to other platforms.
Producing, marketing and distributing films can involve significant risks and costs, and can cause our financial results to vary depending on the timing of a film’s release. For instance, marketing costs are generally incurred before and throughout the theatrical release of a film and are expensed as incurred. Therefore, we typically incur losses with respect to a particular film prior to and during the film’s theatrical exhibition, and profitability for the film may not be realized until after its theatrical release window. Further, we may revise the release date of a film as the production schedule changes or in such a manner as we believe is likely to maximize revenues or for other business reasons. Additionally, there can be no assurance that any of the films scheduled for release will be completed and/or in accordance with the anticipated schedule or budget, or that the film will ever be released.
Theatrical Releases
For the fiscal year ended March 31, 2024, we released twenty-six (26) films theatrically in the U.S. across our labels (including our partnership with Roadside Attractions). Such titles and their release patterns included the following:
Fiscal 2024
Theatrical Releases
Title
Theatrical Release Date
Release Pattern
Label
Are You There God? It’s Me, Margaret April 28, 2023 Theatrical and Accelerated Home Entertainment Lionsgate
Sisu April 28, 2023 Theatrical and Premium Video-on-Demand Lionsgate
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About My Father May 26, 2023 Theatrical and Premium Video-on-Demand Lionsgate
The Blackening June 16, 2023 Theatrical and Premium Video-on-Demand Lionsgate
Joy Ride July 7, 2023 Theatrical and Premium Video-on-Demand Lionsgate
Expend4bles September 22, 2023 Theatrical and Premium Video-on-Demand Lionsgate
Saw X September 29, 2023 Theatrical and Premium Video-on-Demand Lionsgate
The Hunger Games: The Ballad of Songbirds & Snakes November 17, 2023 Theatrical and Premium Video-on-Demand Lionsgate
Silent Night December 1, 2023 Theatrical and Premium Video-on-Demand Lionsgate
Ordinary Angels February 23, 2024 Theatrical and Premium Video-on-Demand Lionsgate
Imaginary March 8, 2024 Theatrical and Premium Video-on-Demand Lionsgate
Arthur the King March 15, 2024 Theatrical and Premium Video-on-Demand Lionsgate
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Fiscal 2024
Theatrical Releases
Title
Theatrical Release Date
Release Pattern
Label
Somewhere in Queens April 21, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions
Fool's Paradise May 15, 2023 Theatrical and Premium Video-on-Demand Roadside Attractions
The Last Rider June 23, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions
Black Ice July 14, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions
Dreamin' Wild August 4, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions
Retribution August 25, 2023 Theatrical and Premium Video-on-Demand Roadside Attractions
Camp Hideout September 15, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions
The Marsh King's Daughter November 3, 2023 Theatrical and Premium Video-on-Demand Roadside Attractions
Beyond Utopia November 3, 2023 Theatrical and Accelerated Home Entertainment Roadside Attractions
Scrambled February 2, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions
The Monk and the Gun February 9, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions
Bring Him to Me February 23, 2024 Multi-platform Theatrical and Home Entertainment Roadside Attractions
Accidental Texan March 8, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions
Asphalt City March 29, 2024 Theatrical and Accelerated Home Entertainment Roadside Attractions
We continue to evaluate release strategies of our films by releasing solely and/or earlier on streaming platforms, initially releasing on premium video-on-demand, premium electronic sell-through, or by licensing directly to streaming platforms. In doing so, we capitalize on increased optionality in distribution and maintain a platform agnostic approach to distribution to take full advantage of new windowing opportunities and alternative distribution strategies (while also continuing to work closely with our theatrical exhibition partners).
Nominations and Awards
Lionsgate and affiliated companies (including its wholly-owned subsidiaries, Artisan Pictures, Mandate Pictures and Summit Entertainment, and Roadside Attractions, of which Lionsgate owns a 43% equity interest) have distributed films that have earned numerous Academy Award®, Golden Globe Awards®, Producers Guild Awards®, Screen Actors Guild Awards®, Directors Guild Awards®, BAFTA Awards and Independent Spirit Awards nominations and wins.
Motion Picture - Home Entertainment
Our U.S. home entertainment distribution operation exploits our extensive film and television content library of more than 20,000 motion picture titles and television episodes and programs, consisting of titles from, among others, Lionsgate, our subsidiaries, affiliates and joint ventures (such as Anchor Bay Entertainment, Artisan Entertainment, eOne, Grindstone Entertainment Group, Roadside Attractions, STARZ, Summit Entertainment, Trimark and Vestron), as well as titles from third parties such as A24, A&E, AMC, Entertainment Studios, Gravitas, Saban Entertainment, StudioCanal, STX Entertainment, Tyler Perry Studios Visiona Romantica and Zoetrope. Home entertainment revenue consists of packaged media and digital revenue.
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Packaged Media
Packaged media distribution involves the marketing, promotion and/or sale of DVDs/Blu-ray/4K Ultra HD discs to wholesalers and retailers in the U.S. and Canada. Fulfillment of physical distribution services are substantially licensed to Sony Pictures Home Entertainment. We distribute or sell content directly to retailers such as Wal-Mart, Target, Amazon and others who buy large volumes of our discs to sell directly to consumers.
Digital Media
We consider alternative distribution strategies for our films and releases several titles solely and/ or in an accelerated post-theatrical window on various digital platforms (including multi-platform distribution). We directly distribute this and other content (including certain titles not distributed theatrically or on physical media) across a wide range of global distribution platforms and networks on an on-demand basis (whereby the viewer controls the timing of playback) through dozens of transactional (transactional video-on-demand and electronic-sell-through), subscription, ad-supported and free video-on-demand platforms. We also directly distribute content on a linear distribution basis (i.e., whereby the programmer controls the timing of playback) through various linear pay, basic cable, and free, over-the-air television platforms worldwide. Transactional video-on-demand services to which we license our content include, among others, Prime Video, Apple TV, Fandango at Home, YouTube, Google TV, Comcast Xfinity and Microsoft Movies & TV; SVOD services to which we license our content include, among others, Netflix, Hulu, Amazon’s Prime Video, Peacock, Paramount+ and Max; ad-supported video-on-demand services to which we license our content include, among others, The Roku Channel, Tubi TV, YouTube, Samsung and Pluto; and linear networks to which we distribute our content include, among others, pay television networks such as STARZ, EPIX, HBO and Showtime, and basic cable network groups such as NBCUniversal Cable Entertainment, Paramount Global Domestic Media Networks, Disney Media & Entertainment Distribution Networks, Warner Media Entertainment Networks and AMC Networks, as well as Bounce, Telemundo and UniMás. Additionally, we own and operate a suite of 13 multi-content and single series FAST channels carried by various platforms including, among others, Samsung, The Roku Channel and Pluto.
Motion Picture - Television
We license our theatrical productions and acquired films to the domestic linear pay, basic cable and free television markets. For additional information regarding such distribution, see Motion Picture-Home Entertainment - Digital Media above.
Motion Picture - International
Our international sales operations are headquartered at our offices in London, England. The primary components of our international business are, on a territory-by-territory basis through third parties or directly through our international divisions:
• The licensing of rights in all media of our in-house feature film product and third-party acquisitions on an output basis;
• The licensing of rights in all media of our in-house product and third-party acquisitions on a sales basis for non-output territories;
• The licensing of third-party feature films on an agency basis; and
• Direct distribution of theatrical and/or ancillary rights licensing.
We license rights in all media on a territory-by-territory basis (other than the territories where we self-distribute) of (i) our in-house feature film product, and (ii) films produced by third parties such as Ace Entertainment, Buzzfeed, Fifth Season, Asbury Park Pictures and Endurance Media. Films licensed and/or released by us internationally in fiscal 2024, included such in-house productions as The Hunger Games: The Ballad of Songbirds & Snakes , Are You There God? It’s Me Margaret , About My Father , Joy Ride , Saw X , Highlander , Now You See Me 3 , Michael , Imaginary , Never Let Go (f/k/a Motherland) and Miller’s Girl , as well as films produced by third parties such as Flight Risk , Anniversary , Ordinary Angels , Unsung Hero , The Blackening , The Strangers Trilogy , One Ranger , Float , Puppy Love , Love in Taipei and Love at First Sight . Third-party films for which we were engaged as exclusive sales agent and/or released by us internationally in fiscal 2024 included Bone Yard and The Fabulous Four .
Through our territory-by-territory sales and an output arrangement in France (for all rights for all media, including home entertainment and television rights), we generally cover a substantial portion of the production budget or acquisition cost of new theatrical releases which we license and distribute internationally. We also distribute theatrical titles in Latin America through International Distribution Company, and theatrical rights in Canada through Cineplex Pictures.
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We also self-distribute motion pictures in the United Kingdom and Ireland through our subsidiary, Lions Gate International (UK) Limited (“Lionsgate UK”). For the fiscal year ended March 31, 2024, Lionsgate UK released the following theatrical titles:
Fiscal 2024
Lionsgate UK
Title Release Date
Are You There God? It’s Me, Margaret May 19, 2023
Joy Ride August 4, 2023
Cobweb September 1, 2023
Expend4bles September 22, 2023
Saw X September 29, 2023
The Miracle Club October 13, 2023
Anatomy of a Fall November 10, 2023
The Hunger Games: The Ballad of Songbirds & Snakes November 17, 2023
The Iron Claw February 9, 2024
Imaginary March 8, 2024
Additionally, our office in India manages operations and growth opportunities in the South Asian/Indian sub-continent. Through our local office in Mumbai, we manage the following activities:
• Appoint and work closely with theatrical distribution partners to maximize box office for our films;
• Partner with local production companies, as well as develop in-house, Indian local language television series and feature films for distribution across other media platforms;
• Offer STARZ in the region and across emerging Asian markets, through our direct-to-consumer product and in collaboration with telco and broadband partners, Amazon and Apple TV; and
• Explore investment opportunities throughout the South Asian and South East Asian media market.
Motion Picture - Other
Global Products and Experiences
Our Global Products and Experiences division drives incremental revenue and builds consumer engagement across our entire portfolio of properties via live shows and experiences, location-based entertainment destinations, games, physical and digital merchandise, and select strategic partnerships and investments .
Within the division, our Global Live Entertainment business focuses on licensing, developing, and producing live stage shows, concerts, and live immersive experiences and events based on our theatrical and television content. We have announced multiple live entertainment projects, including Wonder , Nashville and La La Land for Broadway, The Hunger Games for London, as well as a live dance show inspired by our Step-Up film franchise. Live to film concerts currently touring globally include La La Land , Dirty Dancing and Twilight .
Our Interactive Entertainment business focuses on growing a slate that includes games across PC/console, mobile, virtual reality and more, both through stand-alone games based solely on our content and the integration of our properties with marquee games such as Call of Duty , Dead By Daylight , Roblox, and Fortnite , as well as Web3 projects, including the SANDBOX.
Our Location Based Entertainment business licenses and produces our Lionsgate, theatrical, and television brands for theme parks, destinations, and stand-alone attractions and experiences. Attractions based on The Hunger Games , John Wick , Now You See Me , SAW and other of our intellectual property can be found at theme parks and destinations in the United States, United Kingdom, and the Middle East, including the John Wick Experience opening in Las Vegas later in 2024. We have also partnered with Six Flags to open SAW themed haunted houses across multiple Six Flags theme parks during the Halloween season.
Our Consumer Products business licenses and develops products around our leading film and television properties, including John Wick , The Hunger Games , Twilight , Dirty Dancing, Saw and Ghosts . Our merchandise is available in the
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Lionsgate Shop, our official e-commerce shop, and at many well- known retail outlets such as Hot Topic, Walmart and Target. We are developing new offerings across a broad range of categories with best-in-class licensees, including LEGO, American Classics, Ripple Junction, Goodie Two-Sleeves, Hot Toys, Funko and more.
Music
We manage music for our theatrical and television slates, including overseeing songs, scores and soundtracks for all of our theatrical productions, co-productions and acquisitions, as well as music staffing, scores and soundtracks for all of our television productions. Music revenues are derived from the sales and licensing of music from our films, television, and other productions, and the theatrical exhibition of our films and the broadcast and webcast of our productions.
Ancillary Revenues
Ancillary revenues are derived from the licensing of films and television content at non-theatrical venues including educational and institutional facilities, U.S. military bases, oil rigs, hospitals, hotels, prisons, and on all forms of common carrier transportation, including airlines and ships.
STUDIO BUSINESS: TELEVISION PRODUCTION
Our television business consists of the development, production, syndication and distribution of television programming. We principally generate revenue from the licensing and distribution of such programming to broadcast television networks, pay and basic cable networks, digital platforms and syndicators of first-run programming, which license programs on a station-by-station basis and pay in cash or via barter (i.e., trade of programming for airtime). Each of these platforms may acquire a mix of original and library programming.
After initial exhibition, we distribute programming to subsequent buyers, both domestically and internationally, including basic cable network, premium subscription services or digital platforms (known as “off-network syndicated programming”). Off-network syndicated programming can be sold in successive cycles of sales which may occur on an exclusive or non-exclusive basis. In addition, television programming is sold on home entertainment (packaged media and via digital delivery) and across all other applicable ancillary revenue streams including music publishing, touring and integration.
Similar to our film production practices, we leverage tax credits, subsidies, and other incentive programs to optimize our returns and maintain financially prudent production models for television content.
Television Production - Television
Lionsgate Television
We currently produce, syndicate and distribute 100 television shows on more than 50 networks. For the fiscal year ended March 31, 2024, scripted and unscripted programming produced, co-produced or distributed by us and our affiliated entities (not including executive produced series by 3 Arts Entertainment, of which we own a majority interest), as well as programming syndicated by our wholly-owned subsidiary, Debmar-Mercury, included the following:
Fiscal 2024
Scripted – Lionsgate
Title
Network
Acapulco
Apple
Black Mafia Family
Starz
The Continental
Peacock / Amazon
Extended Family
NBC
Ghosts
CBS
Julia
Max
Manhunt: Lincoln
Apple
Mere Mortals
Apple
Power Book II: Ghost
Starz
Power Book III: Raising Kanan
Starz
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Serpent Queen
Starz
The Venery of Samantha Bird
Starz
Fiscal 2024
Scripted – eOne
Title
Network
A Gentleman in Moscow
Paramount+
Moonshine
CBC
The Rookie
ABC
The Rookie: Feds
ABC
The Spencer Sisters
CTV
Yellowjackets
Showtime
Fiscal 2024
Unscripted – Lionsgate Alternative Television*
Title
Network
About Face
TLC
Adam Richman Eats Britain
Food Network
All Creatures Great and Small Meets The Yorkshire Vet
Channel 5
Animal Care Club
Channel 5
At Home with the Greens
Channel 5
Bail Jumpers
Investigation Discovery
Behind the Music
Paramount+
Bob Menendez Documentary
Fox Nation
Brat Loves Judy
WEtv
Brat Loves Judy: The Baby Special
WEtv
Britain's Islands: Isle of Wight
Channel 5
Buried in the Backyard
Oxygen
Celebrity Ex On The Beach
MTV
Cruising with Susan Calman
Channel 5
Derbez Family Vacation
Vix
Disappeared
Investigation Discovery
Disappeared - Bradley Sisters Podcast
Investigation Discovery
Disappeared Special - Bradley Sisters
Investigation Discovery
Fletcher's Family Farm
ITV
Fletcher's Family Farm at Christmas
ITV
Good Cop, Bad Cop
Investigation Discovery
Harvest on the Farm
Channel 5
Hoffman Family Gold
Discovery
How to Not Get Rid of a Body
Investigation Discovery
Icons that Changed America
History
Krishnas: Gurus. Karma. Murder.
Peacock
Ladies First
Netflix
Lincoln Log Masters
Roku
Lost U-Boats of WWII
History
Married to the Game
Amazon
My Big Fat Fab Life
TLC
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Naked and Afraid
Discovery
Naked and Afraid XL
Discovery
Naked and Afraid: Castaways
Discovery
Naked and Afraid: Last One Standing
Discovery
Power Slap: Road to the Title
Rumble
Royal Rules of Ohio
Freeform
Secrets of the Christmas Factory
Channel 5
Seduced to Slay
Investigation Discovery
Selling Sunset
Netflix
Selling the OC
Netflix
Shetland: The Viking Isles
Channel 5
Steve Austin
A&E
Street Outlaws Australia
Discovery
Street Outlaws Mega Cash Days
Discovery
Street Outlaws New Orleans
Discovery
Susan Calman: Tales of the City
Channel 5
The Barnes Bunch
WETV
The Canary Islands with Jane McDonald
Channel 5
The Impact: Atlanta
BET
The Impact: NYC
VH1
The Love Experiment
MTV
The Murder Tapes
Investigation Discovery
The Ultimate Fighter
ESPN+
The Yorkshire Vet
Channel 5
Toya & Reginae
WE tv
Where is Wendy Williams?
Lifetime
Wicked Tuna
National Geographic
Zombie House Flippers
Discovery
Fiscal 2024
Syndication – Debmar-Mercury
Title
Family Feud
People Puzzler
Sherri Shepherd
* Lionsgate Alternative Television includes programming produced by Pilgrim Media Group (of which we own a majority interest), as well as by our wholly-owned subsidiaries, eOne’s U.S. and U.K. non-scripted group, Blackfin, Renegade and Daisybeck Studios (acquired in December 2023).
Starz Original Programming
For information regarding production of Starz original programming, see Media Networks - Starz Networks - Starz Original Programming.
Television Production- International
We license, sale and distribute original Lionsgate television series (including Lionsgate UK television programming), Starz original programming, third party television programming and format acquisitions to international markets via packaged media
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and various digital platforms. For the fiscal year ended March 31, 2024, Lionsgate UK television programming that was acquired, began production, was produced or was broadcast, included the following:
Fiscal 2024
Television - Lionsgate UK
Title Network Partner(s)
Northern Lights TG4 Deadpan Pictures
Son of Critch 3 CBC & CW Project 10
Borderline ZDF & Roku Further South Productions and ShinAwil
The Burnings Girls Paramount+ and Roku Buccaneer Media
The Final Score Netflix Dynamo
Dark City: The Cleaner Sky NZ Endevour Ventures
Prosper Stan Lingo Pictures
Population 11 Stan Jungle Entertainment
Pistol FX/Hulu and Disney+ Wiip
Endangered M-Net MOTD Entertainment
Television Production - Home Entertainment
For information regarding television production home entertainment revenue, see Motion Picture - Home Entertainment above.
Television Production - Other
Other revenues are derived from, among others, the licensing of our television programs to other ancillary distributors, the sales and licensing of music from the television broadcasts of our productions, and from our interest in 3 Arts Entertainment, a talent management company. 3 Arts Entertainment receives commission revenue from talent representation and are producers on a number of television shows and films where they receive an executive producer fee and back-end participations.
MEDIA NETWORKS
Media Networks - Starz Networks - United States
Starz Networks is a leading provider of premium subscription video programming to consumers in the U.S. We sell our services on a direct-to-consumer basis and through various distributors, including OTT providers (such as Amazon, Apple, Google and Hulu) and MVPDs (such as Comcast, Charter, DIRECTV and DISH Network).
Our flagship premium service STARZ had 21.8 million subscribers as of March 31, 2024 (total North America not including subscribers who receive programming free as part of a promotional offer). STARZ offers premium original series and recently released library movies without advertisements. Our other services, STARZ ENCORE and MOVIEPLEX, offer theatrical and independent library movies as well as original and classic television series also without advertisements. Our services include a stand-alone, direct-to-consumer app, 17 linear networks, and on-demand and online viewing platforms. Our app and online viewing platforms offer thousands of monthly movies and series episodes from studio partners, including first-run content, along with a growing line-up of successful original programming. Our services are offered directly to consumers via the STARZ app and via our website at www.starz.com as well as through our retail partners (such as Apple and Google) for a recurring fee, or by our distributors to their subscribers either at a recurring price as part of a programming tier, package or bundle with other products or services, or on an a la carte basis.
The table below depicts the STARZ app and our 17 existing linear services, their respective on-demand services, and highlights some of their key attributes.
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Demographics and Strategy
Designed to complement any television offering for general audiences across both wholesale and retail OTT, as well as traditional MVPD distribution platforms, STARZ is a best-in-class subscription service delivering premium original series and hit movies with appeal to women and diverse audiences worldwide.
We are focused on developing and distributing authentic and engaging original programming that resonates with audiences that have been traditionally underrepresented in the premium television space.
Across our digital platforms, the STARZ app provides an alternative for subscribers looking for a competitively priced option. Subscribers have access to a vast library of quality content and a top-rated user experience, along with the ability to download and watch STARZ original series, blockbuster theatricals and favorite classic TV series and movies.
We believe this strategy, combined with a proven management team, will ensure Starz Networks’ services remain a “must have” for subscribers and a meaningful profit center for our distributors.
Affiliation Agreements
Our services are distributed pursuant to affiliation agreements with our distributors. We earn revenue under these agreements either (i) based on amounts or rates tied to the total number of subscribers who receive our services or (ii) based on amounts or rates which are not tied solely to the total number of subscribers who receive our services. Our affiliation agreements expire at various dates through 2027.
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We work with our distributors to increase the number of subscribers to our services. To accomplish this, we may help fund the distributors’ efforts to market our services or may permit distributors to offer limited promotional periods with discounted or no payment of subscriber fees. We believe these efforts enhance our relationship with distributors, improve the awareness of our services and maximize subscribers and revenue over the term of these affiliation agreements.
Distributors report the number of subscribers to our services and pay for services, generally, on a monthly basis. The agreements are generally structured to be multi-year agreements with staggered expiration dates and certain of the agreements provide for annual contractual rate increases.
STARZ App
The STARZ app is the single destination for both direct OTT subscribers and distributor authenticated subscribers to stream or download our original series and movie content. The STARZ app:
• Is available for purchase as a standalone OTT service for a recurring monthly fee;
• Is available on a wide array of platforms and devices including Amazon Fire, iOS, Android and Roku, among others;
• Includes on-demand streaming and downloadable access for internet-free viewing;
• Offers instant access to thousands of selections each month (including STARZ original series and commercial free movies); and
• Is available as an additional benefit to paying MVPD subscribers of the Starz Networks’ linear premium services.
Starz Original Programming
STARZ is a leader in high-quality, bold premium programming developed for women and underrepresented audiences. Its slate is driven by critically-acclaimed and award-winning scripted original series with highly-engaged audiences.
STARZ Original Series like “Outlander” and “Power” have become tentpole franchises with multiple spinoff and derivative series to meet audience demand. STARZ also has brought audiences groundbreaking new series including “P-Valley,” “BMF,” and “The Serpent Queen,” among many others.
Starz Networks contracts with Lionsgate’s Television Production segment and other independent studios and production companies to produce original programming that appears on our Starz services.
In fiscal 2024, STARZ premiered a strong lineup of original programming for women and underrepresented audiences including the highly-anticipated return of the time travel, fantasy series “Outlander” (Season 7), a new season of the gripping crime drama “BMF” (Season 3) and installments of the juggernaut “Power” cinematic universe, “Power Book III: Raising Kanan” (Season 3) and “Power Book IV: Force” (Season 2), among several other series and season premieres. These original programming premieres, coupled with an increased volume of theatrical output titles drove subscription and engagement with key cohorts.
Output and Content License Agreements
The majority of acquired content on our services consists of movies that have been released theatrically. Starz has an exclusive multiyear output licensing agreement with Lionsgate for Lionsgate label titles theatrically released in the U.S. starting January 1, 2022, and for Summit label titles theatrically released in the U.S. starting January 1, 2023. Starz also has an exclusive multiyear post pay-one output licensing agreement with Universal for live-action films theatrically released in the U.S. starting January 1, 2022. The Universal agreement provides Starz with rights to exhibit these films immediately following their pay-one windows.
Under these agreements, Starz has valuable exclusive rights to air these new movies on linear television services, on-demand or online during specific windows. Generally, except on a transactional on-demand or pay-per-view basis, no other linear service, online streaming or other video service may air or stream these recent releases during Starz’s windows.
Starz also licenses first-run independent feature films acquired through U.S. and international film festivals and other sources as well as library content comprised of older, previously released theatrical movies from many of Hollywood’s major studios. In addition to theatrical movies, Starz licenses television series and other content from studios, production companies or other rights holders. The rights agreements for library content are of varying duration and generally permit Starz’s services to exhibit these movies, series and other programming during certain window periods.
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A summary of significant output and library programming agreements (including a library agreement with Lionsgate) are as follows:
Significant output programming agreements Significant library programming agreements
Studio Studio
Lionsgate Lionsgate
Universal Universal
Sony Sony
Twentieth Century Fox
Warner Bros.
Our output agreements generally require us to pay for movies at rates calculated on a pricing grid that is based on each film’s domestic box office performance (subject to maximum amounts payable per movie and a cap on the number of movies that can be put to Starz each year). The amounts Starz pays for library content vary based on each specific agreement, but generally reflect an amount per movie, series or other programming commensurate with the quality (e.g., utility and perceived popularity) of the content being licensed.
Transmission
We currently uplink our programming for our linear services to non-pre-emptible, protected transponders on two satellites positioned in geo-synchronous orbit. These satellites feed our signals to various swaths of the Americas. We lease these transponders under multi-year agreements. We currently transmit to these satellites from our primary uplink facilities, which are provided by a third-party vendor. We have made arrangements at a vendor’s facility to uplink our linear channels to these satellites in the event we are unable to do so from our primary uplink facilities.
Regulatory Matters
In the U.S., the Federal Communications Commission (the “FCC”) regulates several aspects of our and our distribution ecosystem’s operations and programming. This includes FCC oversight in connection with communications satellites and related uplink/downlink equipment and transmissions, content-specific requirements such as closed captioning, loudness of commercials, and program access requirements in connection with certain distributors and programmer services with shared attributable interests.
Regulation
The regulation of programming services, cable television systems, direct broadcast satellite providers, broadcast television licensees and online services is subject to the political process and has been in constant flux historically. To the extent that our programming services are distributed through online platforms, we must comply with various federal and state laws and regulations applicable to online communications and commerce. Further material changes in the law and regulatory requirements that affect our business must be anticipated and there can be no assurance that we will not be materially adversely affected by future legislation, new regulation or deregulation.
Media Networks - International
Starz is available outside the U.S. through STARZ in Canada; LIONSGATE PLAY in India; and through our STARZPLAY Arabia joint venture in the Middle East and North Africa.
Beginning in fiscal 2023, during the second quarter ended September 30, 2022, due to adverse macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the Company’s profitability, we made the strategic decision to wind down our international LIONSGATE+ branded service. We expect the wind down to be completed during the first quarter of fiscal 2025.
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Business Combination
On May 13, 2024, SEAC II Corp., a Cayman Islands exempted company (“New SEAC”), consummated a business combination among New SEAC, Screaming Eagle Acquisition Corp., a Cayman Islands exempted company and then parent of New SEAC (“SEAC”), and LG Orion Holdings ULC, a British Columbia unlimited liability company (“StudioCo”) and a wholly-owned subsidiary of the Company, pursuant to a Business Combination Agreement, dated as of December 22, 2023, by and among New SEAC, SEAC, the Company, LG Sirius Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of the Company (“Studio HoldCo”), StudioCo, SEAC MergerCo, a Cayman Islands exempted company and a wholly-owned subsidiary of New SEAC (“MergerCo”), and 1455941 B.C. Unlimited Liability Company, a British Columbia unlimited liability company and a wholly-owned subsidiary of SEAC (“New BC Sub”). In connection with the closing of the business combination, SEAC II Corp. changed its name to “Lionsgate Studios Corp.” (referred to as “Lionsgate Studios”). Lionsgate Studios has continued the existing business operations of StudioCo, which consists of the Studio Business of Lionsgate. Lionsgate Studios became a separate publicly traded company and its common shares commenced trading on Nasdaq under the symbol “LION” on May 14, 2024. The "Studio Business" consists of the businesses of Lionsgate's Motion Picture and Television Production segments, together with substantially all of Lionsgate's corporate general and administrative functions and costs.
In connection with the business combination, the Company and StudioCo entered into a separation agreement pursuant to which (i) the assets and liabilities of the Company’s Studio Business (including certain subsidiaries of the Company engaged in the Studio Business) were separated from the assets and liabilities of the Company’s Starz Business (meaning substantially all of the assets and liabilities constituting the Media Networks segment, and including certain subsidiaries of the Company engaged in the Company’s Starz Business) and transferred to StudioCo such that StudioCo holds, directly or indirectly, all of the assets and liabilities of the Studio Business, and (ii) all of the Company’s equity interests in StudioCo were transferred to Studio HoldCo.
As a result, approximately 87.2% of the total shares of Lionsgate Studios continue to be held by the Company, while former SEAC public shareholders and founders and common equity financing investors own approximately 12.8% of Lionsgate Studios. In addition to establishing Lionsgate Studios as a standalone publicly-traded entity, the transaction resulted in approximately $350.0 million of gross proceeds to the Company, including $274.3 million in PIPE financing. Of the total gross proceeds, approximately $330.0 million was received at or shortly after the closing of the Business Combination, with the remaining $20.0 million expected to be received shortly.
The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Screaming Eagle will be treated as the acquired company and the Studio Business will be treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of New SEAC will represent a continuation of the financial statements of the Studio Business, with the Business Combination treated as the equivalent of the Studio Business issuing stock for the historical net assets of Screaming Eagle, accompanied by a recapitalization. The net assets of Screaming Eagle will be stated at fair value, which approximates historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of the Studio Business. The Studio Business will continue to be a consolidated subsidiary of the Company.
JOINT VENTURES, PARTNERSHIPS AND OWNERSHIP INTERESTS
Our joint ventures, partnerships and ownership interests support our strategy of being a multiplatform global industry leader in entertainment. We actively assess our portfolio of properties, libraries, and assets to ensure they continue to enhance our competitive position in the industry, offer potential for significant long-term returns, optimize the use of our capital, and are aligned with our goals. When appropriate, we discuss potential strategic transactions with third parties for purchase of our properties, libraries or other assets or businesses that factor into these evaluations. As a result, we may, from time to time, determine to sell individual properties, libraries or other assets or businesses or enter into additional joint ventures, strategic transactions and similar arrangements for individual properties, libraries or other assets or businesses. For specific details regarding our equity method investees and redeemable noncontrolling interests, please refer to Note 5 and Note 11 in our Audited Consolidated Financial Statements.
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Intellectual Property
We currently use and own or license a number of trademarks, service marks, copyrights, domain names and similar intellectual property in connection with our businesses and own registrations and applications to register them both domestically and internationally. We believe that ownership of, and/or the right to use, such trademarks, service marks, copyrights, domain names and similar intellectual property is an important factor in our businesses and that our success depends, in part, on such ownership.
The prevalence of motion picture and television piracy is widespread across various regions globally, notably in South America, Asia, and specific Eastern European countries. This is exacerbated by technological advancements and the digital transformation of content, facilitating the unauthorized creation, distribution, and sharing of high-quality copies through physical media and digital platforms. The proliferation of these unauthorized copies has had and will likely continue to have an adverse effect on our business, because these products may reduce the revenue we receive from our products. Our ability to safeguard and enforce our intellectual property rights is subject to inherent risks, and we occasionally face disputes concerning rights and obligations related to intellectual property. We cannot guarantee success in all intellectual property disputes that may arise.
Competitive Conditions
Our businesses operate in highly competitive markets. We compete with companies within the entertainment and media business and from alternative forms of leisure entertainment, such as travel, sporting events, outdoor recreation and various cultural activities. We compete with the major studios, numerous independent film and television production companies, television networks, pay television services and digital media platforms for the acquisition of literary, film and television properties, the services of performing artists, directors, producers and other creative and technical personnel and production financing, all of which are essential to the success of our businesses. In addition, our motion pictures compete for audience acceptance and exhibition outlets with motion pictures produced and distributed by other companies. Similarly, our television product faces significant competition from independent distributors as well as major studios. Moreover, our networks compete with other programming networks for viewing and subscribership among each distributor’s customer base, as well as for carriage by such distributors. As a result, the success of any of our motion picture, television or media networks business is dependent not only on the quality and acceptance of a particular film or program, but also on the quality and acceptance of other competing content released into the marketplace at or near the same time as well as on the ability to license and produce content for the networks that is adequate in quantity and quality and will generate satisfactory subscriber levels.
Human Capital Management
Employees
As of May 24, 2024, we had approximately 1,717 full-time employees in our worldwide operations. We also utilize many consultants in the ordinary course of our business and hire additional employees on a project-by-project basis in connection with the production of our motion pictures and television programming.
Diversity, Equity and Inclusion
We are committed to embracing diversity, fostering an inclusive culture, and advancing the representation of women and historically marginalized groups within our workforce. Our Chief Diversity Officer collaborates closely with our leadership team across all sectors of our organization to drive meaningful change in recruitment, hiring practices, promotions, policies, and overall corporate culture. Together, we strive to address issues of inequality and workforce disparity on a company-wide scale.
We maintain the following recruitment and hiring initiatives:
• Internship Programs designed to increase inclusion across the entertainment industry. All internship positions are posted publicly for equal access/opportunity and are filled on a rolling basis.
• Targeted Recruitment efforts involving partnerships with diverse organizations, engagement with college campus diversity groups representing underrepresented demographics, and collaboration with historically black colleges to attract new employees and interns.
• Hiring Practices ensuring that we attract top-tier talent through fair and accessible methods. Key elements of this approach include bias free job descriptions, inclusive hiring training, external diversity partners, diverse candidate slates, and diverse, cross-functional interview panels. The core principle of our hiring process is to seek out the
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strongest candidate for every role, while also emphasizing diversity, equal access to roles, objective and unbiased hiring and a rigorous, competitive, and consistent hiring process.
• Supplier Diversity and Inclusion Program actively fostering relationships with diverse businesses and continually striving to increase spend with diverse suppliers, while prioritizing more competitive pricing, quality, service, innovation and creativity in procurement of services. Qualifying suppliers must be at least 51% owned, operated and controlled by member(s) from one of the following enterprises or other businesses recognized by the Small Business Administration: minority-owned business enterprise (Hispanic, African-American, Asian, Native America); women-owned business enterprise; Veteran-owned business enterprise; Lesbian, Gay, Bisexual and Transgender business enterprise; and disability-owned business enterprise. We believe that this initiative increases the breadth of our vendor pool, while creating greater economic opportunity for diverse suppliers. Where applicable, our Code of Business Conduct and Ethics, governs conduct with, and applies to, our suppliers, vendors, contractors and agents.
Employee Resource Groups
We provide our employees with an array of Employee Resource Groups (“ERGs”) which offer them the chance to establish a greater presence at Lionsgate and an opportunity to enhance cross-cultural awareness, develop leadership skills and network across the Company’s various business units and levels. The ERGs are voluntary, employee-led groups that foster a diverse, engaging, and inclusive workplace.
• Lionsgate Early Career Group aims to inspire curiosity and networking to foster growth for professionals in early stages of their careers.
• Lionsgate Multicultural Employee Resource Group advocates for a more inclusive workplace and entertainment landscape through programs that educate, activate and celebrate multicultural diversity and its global impact; consists of resource groups for the Asian American Pacific Islander community, the Black community and the Latine community.
• Lionsgate Parents Group aims to bring together parents, expecting parents, caregivers, and allies to ensure our community fosters an environment that supports all families.
• Lionsgate Pride supports, develops and inspires future LGBTQIA+ leaders within the Company and the industry.
• Lionsgate Vets creates a community of veterans and their supporters working together to enhance veteran presence and engage the industry from the unique perspective of a military background.
• Lionsgate Women’s Empowerment Group creates a community that improves the prominence of female leaders and empowers women at all levels within the Company and the industry. The group amplifies opportunities for women and strengthens their ability to succeed in their roles and workforce by providing relevant resources, tools, and programming while developing leadership skills through mentorship, networking, and professional development.
Community Involvement
We are committed to acting responsibly and making a positive difference in the local and global community through Lionshares , our volunteer program that seeks to provide opportunities for employees to partner with a diverse range of charitable organizations. We maintain a Corporate Sponsorship Committee that prioritizes corporate philanthropic initiatives throughout Lionsgate, focusing particularly on organizations and activities related to diversity and poverty in order to increase our impact and to develop meaningful relationships with a core group of organizations and events.
Other Employee Benefits and Programs
We offer a comprehensive benefits package which includes health, dental and vision insurance, family forming benefits, mental health support, resources for caregiving (children and adult family), online fitness and meditation classes, and new parent coaching. We offer programs to develop and enrich the employee experience with offerings such as tuition reimbursement, leadership development programs, mentorship, and additional programs to help support specific populations (e.g., minorities, women and LGBTQ). We conduct annual employee training on anti-harassment, information technology security, the Foreign Corrupt Practices Act, as well as manager, diversity, equity and inclusion trainings. We also provide training and development to all employees, focusing on career development, professional development and industry knowledge.
Corporate, Environmental and Social Responsibility
We protect our social, financial, informational, environmental, and reputational assets and make it a priority to operate our business in a responsible and sustainable manner. Engaging in such responsibility not only helps us manage risks and maximize
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opportunities, but also helps us understand and manage our social, environmental, and economic impact that enables us to contribute to society’s wider goal of sustainable development. This includes, but is not limited to, conducting business in a socially responsible and ethical manner, supporting human rights, and committing to environmental sustainability.
In all our offices, we prioritize efforts to prevent pollution, and to conserve, recover, and recycle materials, water and energy wherever possible. Our productions distribute documents electronically to minimize paper consumption and waste and limit the use of single-use plastics. Our productions follow best practices featured in the Producers Guild of America and Sustainable Production Alliance’s Green Production Guide, which are designed to reduce the film, television, and streaming industry’s carbon footprint and environmental impact. Our U.S. productions encourage the employment of green vendors that provide sustainable goods and services for film, television and streaming productions. We also prioritize vendors whose dedication to operating business in a responsible and sustainable manner directly aligns with those of Lionsgate.
Management Succession Planning
The Nominating and Corporate Governance Committee of the Board of Directors, with the assistance of an independent outside consultant, has established short-term and long-term management succession plans, which it reviews and updates periodically. The plans identify critical positions and potential replacements for the Company’s senior executives (including the Chief Executive Officer and the Vice Chair), should one of these critical positions become vacant. The plans are designed to anticipate both expected successions, such as those arising from anticipated retirements, as well as unexpected transitions (i.e., “black swan events”), such as those occurring when executives leave for positions at other companies, or due to death, disability or other unforeseen events.
Corporate History
We are a corporation organized under the laws of the Province of British Columbia, resulting from the merger of Lions Gate Entertainment Corp. and Beringer Gold Corp. on November 13, 1997. Beringer Gold Corp. was incorporated under the Business Corporation Act (British Columbia) on May 26, 1986 as IMI Computer Corp. Lions Gate Entertainment Corp. was incorporated under the Canada Business Corporations Act using the name 3369382 Canada Limited on April 28, 1997, amended its articles on July 3, 1997 to change its name to Lions Gate Entertainment Corp., and on September 24, 1997, continued under the Business Corporations Act (British Columbia).
Available Information
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act, are available, free of charge, on our website at investors.lionsgate.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). The Company's Disclosure Policy, Corporate Governance Guidelines, Standards for Director Independence, Code of Business Conduct and Ethics for Directors, Officers and Employees, Policy on Shareholder Communications, Related Person Transaction Policy, Charter of the Audit & Risk Committee, Charter of the Compensation Committee and Charter of the Nominating and Corporate Governance Committee and any amendments thereto are also available on the Company's website, as well as in print to any shareholder who requests them. The information posted on our website is not incorporated into this Annual Report on Form 10-K. We will disclose on our website waivers of, or amendments to, our Code of Business Conduct and Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or persons performing similar functions.
The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov .