Lionsgate Studios Corp. (LGFA) Earnings Call Transcript & Summary

All right. Thanks, everyone, for joining us. I'm Bryan Kraft, and I want to introduce Jeff Hirsch, who's the President and CEO of Starz. We're also going to have Michael Burns joining us. He's just running a little bit late, and he's, of course, the Vice Chairman of Lionsgate. Going to go a little out sequence here since we were starting off with Michael.

Okay.

So we're going to jump ahead to start a little bit. Maybe start with content. What are you excited about with Starz' slate? What's coming this year to drive the business?

Yes. It's a really exciting year. We just premiered BMF this past weekend to record numbers. We did 5.1 million households -- eyeballs over the weekend. If you compare that to The Bachelor, it was all on Disney platforms. We did about 6 million. So we're probably 1/3 the size. So our content really overperforms. If you take a step back and think about what we do with Starz, we really focus on 2 core demos. We work on women and underrepresented audiences, which really allows us to use content to drive lifetime value to drive churn down. And so we line shows up. So if you think about bringing a customer on for a 10-week show and in the digital world, they come on, they disconnect, we line up another show right behind that. So the finale and the premier are locked together. So we've been able to extend lifetime value by about 40% over the last couple of years just by using content to actually extend lifetime value and keep the customer in the business.

Talk about the content strategy in terms of how you're building volume of shows, kinds of shows, films. I mean you touched on it a little bit there, but maybe to get into it a little bit deeper, how is that strategy evolving from here?

Yes. I think -- again, I think, you have to think about overall strategically what we're doing at Starz, right? So unlike the rest of the industry that looked at streaming as kind of a new business, we looked at streaming as the natural evolution of technology in this space. So first, there was cable, then there was satellite and then there was ADSL with telecom, and now there's IP, right? And so we didn't look at that business as anything other than different distribution to the consumer. So we're agnostic in terms of distribution. So what you see on Starz, whether it's on Amazon, whether it's on our own app, whether it's on Comcast or DIRECTV, it's the same product everywhere. And so we really like that play because ultimately, it just puts another revenue stream on a business that's people and content, right? And so we think about it that way, everything has to be the same across the footprint. And so we do 7 to 8 originals, big originals, 5 of our 8 originals do 8.5 million eyeballs a week. If you put those 5 shows into the Netflix viewership data that they've done a couple of months ago, 3 of those 5 shows would be the top 1% of all viewing on Netflix and we're 1/3 the size. So our content really overperforms. But because it's underrepresented audiences and women, I don't think we get the credit for the scale and what we're putting on. So we couple those big originals with the Pay 1 from Lionsgate. So we just had John Wick on. We've got Hunger Games coming shortly. And we have a Pay 2 with Universal. And so if you think about that portfolio of content, coupled at a $10 price point, which is somewhere between $7 to $12 below the broader-based services, it really puts us in a great position to be a complementary service and a bundling partner to all. And if you think about the old world, that's what we were, right, so all we've done is said, the linear world is getting replicated in the digital world. We just have to be there agnostically to all our consumers. And that's why 70% of our revenue by the end of fiscal '25 will be digital. We're about 63% today. So we really moved through the digital transition. We've done it profitably. We're sitting around a 17% trailing 12-month margin, 15% last quarter. We've got line of sight to get to 20%. So you've got a business that, over the last 4 years, it's been very stable in revenue, throwing off profit and then converting about 90% of that to unlevered free cash flow. So it looks different than everybody else in the space right now.

So with the legacy revenue, the linear revenue reaching such a high percentage, are you in a position now where you think Starz can grow revenue sustainably going forward?

So you saw in the last 2 quarters, revenue has started to accelerate. So we've been hovering around $1.4 billion for the last 5 years, give or take, literally $1 million. It's been very stable, where the rest of the industry is probably down 15%. We put our first rate increase in the business 6 months ago. If you think about rate increases, we always look at conversions, we put $1 on the business. How much of that dollar did we keep? We kept over $0.66 of that. It was a really successful rate increase. Tells me we probably had a little more pricing power. Unfortunately, our partners can only do $1 or $2, and I was a little nervous to do $2 to start. So I think we'll come back and do another rate increase in the next 2 to 4 quarters, 4 to 6 quarters, depending on where we see the business. But we've had revenue growth the last 2 quarters, confident that we'll have revenue growth again this quarter. And so revenue is growing on the top side, and we continue to show a great margin on the bottom side.

That's interesting. So you're going to do another rate increase. I guess is that -- how do you think about the cadence? I mean that's really helpful, first of all, sharing that. But how do you think about the cadence of pricing longer term? Is it an annual thing? Is it a semiannual thing?

I think it's kind of we look at the rest of the space, right? If you think about Starz, like I said earlier, we always want to be a complementary service to the broad-based streaming services, right? So just like we were a complementary service for DIRECTV and Comcast and Time Warner Cable when I was there, that's how we want to be in the new world. And I think what we've seen in the space right now is there's been a lot of disruption in the broader-based services. So you've got Warner trying to figure out do they use the Discovery back end? Do they use the Warner back end? And you have Hulu going to Disney. Once that all settles and those guys realize that they're not channels with their platforms, you're going to see a ton of bundling coming in, and we're set up to be that bundling partner. What that means from pricing is we always want to be significantly below those broader-based services. Now the good news for us is most of those services have done 2 or 3 rate increases in the last 3 years. So it's created a lot of room for us to move our rate up as they move their rate up. And so as long as we have a good gap where the consumer subconsciously believes that we are competitive with them, but we're complementary, we'll continue to raise prices.

Okay. What have you been seeing as far as churn in the business? And can you talk about how you manage it, especially because I think a lot of your business is through Amazon rather than actually direct. So I would love to hear some specifics on that.

Yes. So Amazon is our biggest distribution partner today. Our app is our second biggest distribution partner. And it's actually very close to the scale of Amazon. And it was never designed to be that way, but it's worked out that way, which has been great. It was designed really to get us first-party data, which is -- helps us with churn, helps with the programming, and it was then designed to be kind of a balance in the universe that if a digital partner decided to get in a distribution pipe, we've got a place to move people. But it's really become our second biggest distribution platform. And so we look at the business, I think, significantly different within our peers. We actually look at content spend as churn reduction and lifetime value enhancer. So we focus on the back of the business. I mean part of the reason why the rate increase was so successful is that we mapped out a customer journey in terms of when the customer -- so if an outlander customer got a rate increase and they went to the settings part of the app, we knew that they were looking to disconnect. So we threw them a time clock that says, the next episode's in 4 days, right? 50% of the customers actually took no discount to stay at that rate because the episode is there. So we do a lot of that. We really look at the back end business versus the front end. So it allows us to stay away from being very competitive and spending a lot of money in terms of acquisition, which actually drives a lot of churn. And so we really focus on using content to drive lifetime value and churn, because we know if you're on the service for 6 months or more, churn is sub-5%, right? And that's kind of the goal for us. And so we use content. We line content up. So if you think about the Power Universe, the reason why we did all those franchises in Power was so that we could have 4 shows back to back to back. And so a customer that would come on for a season of Power now watches Raising Kanan, BMF and P-Valley. If they stay for those 40 weeks, and 80% do, that brings churn really low, and we have not spent a dime on the front end to do that. And so we've been able to accomplish very low churn and very stable revenue because of it.

Ladies and gentlemen, Michael Burns.

I'm way too old for a red eye. Hey, Bryan. All right. Nice to see you. Sorry, I'm late.

So anyway, let me finish that. Our single focus is on churn management, back end management and customer lifetime value. When we get to a stable point where we're below kind of 2% to 3% -- we're down to 2% to 3% post 6 months, that's when we can really take a lot of cost out of the business because we don't have to go to the front end to keep bringing subscribers on. So I can bring the noise of the business down and take front-end acquisition cost out and really actually then continue to focus on that lifetime journey of the customer.

Okay. All right. So I'm going to ask you one more on Starz, and then maybe we'll come back to the Lionsgate and the broader part of the discussion. And I guess that's about the margin profile for Starz and your ability to contain costs in order to drive margin expansion.

Yes. So I think there's really 3 components to getting to that 20% steady-state margin by coming out of fiscal '27 is kind of the goal. We're sitting -- again in the last 12 -- trailing 12 months, 17%. So it fluctuates between 15% and 17%. One is rate increase, so we can drive the top of the business. We've talked about that. Two, I think, is bundling because bundling actually, while we lose some ARPU, it creates an extension in lifetime value without a lot of cost. And so then we can pull cost out of the business there. But I think most importantly, it's content costs, right? And so if you think about our slate of 7 to 10 shows, it's a lot like the salary cap management in the NFL, right, which is if you're -- follow sports, if you were -- if you have a special team's player who's coming off his rookie deal and about to become a veteran and the veteran minimum pops the cost, you can go back in the draft and pick a rookie and bring them on in a rookie deal and manage cost. Managing a content portfolio of originals is kind of the same thing. So when seasons go from 1 to 2 to 3 to 4, 3 to 4 is where the cost really pops because most of the actors get bigger raises and you have to really manage that. So you have to have in your portfolio of development, shows that can actually replace shows as they get to the later season. So as you turn the slate over and go from season 4 to 5 economics to season 1 of economics, you can pull a ton of cost out of the business. And so what you have to do is map out each of those shows and where the cost portfolio, the curve looks like and know where you have to pop a new show and to bring that cost down. And so we've got a pretty good map of what that looks like. Because, again, we focus on those 2 core demos, we've been able to manufacture hits for those demos. And so when you bring a BMF on, BMF will be probably 1 of our 2 biggest shows, okay? It looks a lot like Power, it costs half as much, right? And so you look at BMF and say, okay, if I take 1 of those characters out and spin 1 of those out, I can bring that on to replace a Power show at half the cost. Now I'm putting a lot of money right to the bottom line. And I'm really not losing anything in terms of acquisition cost and subscriber viewership because we know what those demos want, and we know how to line those up. And so that's really the core of getting to that 20% is turning that slate over with fresher content to drive the business.

Okay. Great. Why don't we maybe back up a little bit? Michael, thank you for joining us. And to give you a proper introduction, Michael Burns, Vice Chairman of Lionsgate. And thanks for making the trip. So Michael, for those not familiar with the Lionsgate story, maybe you could walk us through just the mechanics and the timeline for the plan to merge Lionsgate Studios with Screaming Eagle Acquisition and then to fully separate the Studio from Lionsgate.

Yes, we're on track. We expect by the end of this month to be very much in the throes of the, call it, 13% to 15% of the Studio that will go into this SPAC. I -- SPAC turned into a sort of a dirty word for a little while. We don't look at this really as a SPAC. We look at this as a sub-IPO disguised as a SPAC because our friends at Screaming Eagle, they got rid of all the friction, meaning that there aren't the typical warrants that are hanging around there, they're all going to be gone. And the interesting thing about the promote that Harry and Eli and Jeff get -- they only get it when the stock is up 50%. We had a couple of really great anchor tenants in the pipe that was done. It was -- went out for $150 million. We raised $175 million. Names that you would recognize, almost as prestigious as that fellow in the back, Mario Gabelli, but the -- we've made -- we brought in really blue-chip investors, increased the size of that to $175 million. And now on the de-SPAC-ing, which will be at the latter part of this month, we expect to close on $350 million to $400 million. That will represent 13% to 15% of the Studio and the plan is to spend the rest, the remaining, call it, 85% by the end of this calendar year.

Okay. And really, I guess, a question for both of you. Over the course of this year, investors are -- obviously would be forced to value Studio separate from Starz. Michael, maybe you can give us the pitch for buying Lionsgate stock. And Jeff, maybe you could do the same with Starz.

Well, while we're together, there's a little bit of a disconnect. I know the stock was up yesterday, and it's been bouncing around. I know there's some [ plot ] players that show up some days and then disappear others. But the -- really, where the bottom line is now, if you buy a Lionsgate stock, the stock that trades on the New York Stock Exchange, you're getting Starz for free, if you believe that we're going to close this transaction where the Studio is going to be valued at $4.6 billion, enterprise value, and we're very confident that, that is happening. So that's where the disconnect is right now. I think that will shrink as we get closer and closer. If you want to sort of look at the likelihood of the transaction closing, I think you just look at the warrants. The warrants either were $0 or $0.50 and that's -- means their trading in that $0.46 to $0.47 range. So my belief is that there are a lot of reasons that Jeff and Starz and Lionsgate are going to continue to work together, not the least of which is the Pay 1 deal that we have together, library deals that we do. But we're going to get a better valuation at the Studio from a multiple standpoint by being in a separate traded company. Back in the day, this is -- Jon and I've been doing this for 23, 24 years, when we were a pure play, we traded in the multiple range without deal chatter at the low to mid-teens. And then everybody always thinks we're some sort of takeover candidate. And so my sense is that whether that's true or not, we'll see, but we're in a position today where we have a very unique asset. We have a tremendous library, one of the smart things that we did is we bought every library we possibly could and now the revenue library last 12 months approaching, I don't know, $875 million, $900 million. And don't forget that library business is very high-margin business, meaning over 50%. So you've got the fundamental story and then we can talk about the growth story in a minute, but that's the short elevator pitch on why I think you should buy the stock right now.

Yes. I mean I've talked a little bit about it. I think with all the carnage going on in the space today, Starz is a little misunderstood because everybody says, if Warner and Paramount and all these big guys can't make it work in the streaming business, how can little Starz make it work? And I think if you look at our business, we're through the digital transition. I talked about it, 70% of our revenue will be digital. Amazon and our own app or our own distribution platforms, we're controlling our own distribution. We're going to get to a 20% margin. We're sitting at a 15% to 17% margin today. The only other company in the space that has a positive margin is Netflix, and they -- I guess you could count the DVD business transition as going from the old world to the new, but we're probably the only linear network that has successfully transitioned off of linear into the digital world while maintaining profitability. And the cable fights for us are behind us. When I started at Starz with Jeff on the Board in 2015, 90% of all of our customers were sitting in a cable bundle. And today, 80% of all of our customers are a la carte or rev share, which means 2 things. One is the customers actively went to find and buy Starz. So they know the content is working, they like the content portfolio. What it also means is that we generate revenue for our distribution partners. So we don't have the cable fights where we're a cost center. They want to save money, we want to make more money because we're making money together. And so our distribution apparatus is very stable. So again, you think about it, $1.4 billion, growing 2% to 4%, 3% to 5% long term on revenue, 15% to 20% margin. We also convert about 90% of our profit to unlevered free cash flow on a consistent basis. So growing revenue, great margin, customers that want the product, the content is working, and we're generating a ton of free cash. I think it's a very investable business.

If you think about why we're doing this, we did 2 transactions. We closed eOne at the end of December, and then we bought another 25% of 3 Arts, which we think is a terrific company. When we first bought the first 25%, they were doing about $30 million EBITDA. They're in the management talent business. They've got writers, directors, show runners, et cetera. They create terrific annuity streams with their participation, they represent the talent. So every time, for example, an actor that was in a Marvel movie, who I will not name, gets a check, these guys take a 10% commission. So we spent a fair amount of money on -- between the 2 of those transactions, the $375 million, the wire transfer one out on the eOne. And then on top of that, a couple of hundred million dollars for another 25% of 3 Arts. And this transaction is raising between [ $354 million to $100 million ]. We've picked up great cash flow. We bought -- I think we bought both at a terrific price. Michael Rotenberg who runs 3 Arts, would say that well, paying a little closer to retail this time around, I think we'd pay wholesale the first time. But it's been a terrific investment for us. And so we are effectively delevering by raising this. It was a little bit of a back and forth inside the board because we're selling a piece of our crown jewel, which is the Studio, but we're doing it because we think we'll trade at a better multiple, and it would be a pure play and a lot more people are interested in it. And if the pipe is any indication of that, then certainly -- the thesis certainly seems to be playing out.

Yes. A couple of things in there I'd like to follow up on, I guess. So you mentioned the eOne acquisition from Hasbro was a low multiple that you paid. How were you able to buy eOne at such a low multiple? And what made that acquisition attractive to Lionsgate?

Well, it was a low multiple. It's funny, multiples are weird things. It was a low multiple from our perspective because we have all the synergies. So it was certainly probably close to twice what we think it would ultimately be. So we think at the 5.5%, 6% -- 6x multiple post synergies. So in the world today, the big guys with all these streaming losses and all these things that they're trying to figure out by cost cutting, they're not really in the game for a deal of that size. The only other players that show up for a deal of that size are the private equity players, and they do not have the synergies. So -- and then sometimes they will stretch. I mean I think that it was a really interesting multiple that was paid for all 3, for example, which is a subset of the business that we do. I think it was about 12.5x, 12.8 multiple. And so that's why we get great comfort on where our multiple will trade post the separation.

Okay. And you also mentioned some of the episodic speculation over the years about Lionsgate being in play. How much of the separation has to do with putting both of these businesses in a better position to be able to pursue strategic options that maybe wouldn't be available as a combined company?

Strategic options, very euphemistically put.

Sell side, we have to define words like that.

Exactly. Look, I think there are a great number of companies and players and institutions that are interested probably in some sort of roll-up strategy with Starz. I think there are a tremendous amount of players that are interested in Lionsgate, the pure-play operation, i.e., the management business, the content business, the library, the feature film business, the way we do it, which is completely different than others in the television business. I think there are less interested parties on both companies combined. So I think it's going to be an interesting year or 2. Could be sooner, could be later when everybody says, let's figure out what that strategic alliance looks like. Yes, I'm using strategic alliances as a euphemism as you -- your term.

Yes, we can -- we have lots of words we can use for it, too. Let's see. We would love your thoughts, really both of you, if you want to opine on just how you think industry consolidation in media broadly may play out or not play out over the next couple of years.

I would say that it depends on who has a currency and who has cash and who doesn't have a very messy balance sheet. So do I think some of these mergers that have been talked about and the big players? I mean, come on, the Justice Department didn't approve Simon & Schuster. So I think that's a bunch of c***. But do I think there are assets that can be moving around between companies? Yes, I do. Do I think that Jeff is in a very unique position as he doesn't have -- he's not advertising-dependent and he's got a very steady subscription base and he's making money in the streaming world? Look, the stake that we made, and we did it for growth, we chased growth, is we went for Starz internationally, and it didn't work out well. But we pulled back and said, look, we can't afford to wait for those markets. But that cost us a lot of money. And that's frankly why the -- part of the reason that the stock got whacked. So -- but we said, okay, let's focus on domestic. He's doing a great job with his team. He's got great loyal customers. He's got free cash flow. He has -- one of the reasons that we're -- as I said before, we're separating the business, we want to make sure that both sides of the business aren't too levered, and they're all in the 3 to 3.5 turns from a leverage standpoint. So I think there will be consolidation. If I were going to guess, I think consolidation will involve, on the studio side, the business overall, the people that are or entities that are looking for library, that they're tired of renting and they would like to buy. I think also there are many people that like the theatrical business, but they don't want to be in a theatrical business where you can spend $200 million in a movie and then spend another $80 million promoting P&A, prints and advertising, on the movie and then releasing it domestically and then it bombs and now you have to release it in 90 other territories where you're putting up the P&A. That is not our business. If you look at the -- look, it's all publicly filed. On our wide releases, we make money 75% of the time. And even with the losses, the returns are over 30%. On these platform releases, which are movies that we spend, call it, $0.05 to buy $1 million or $2 million. And then we spent $8 million releasing it off the back -- for example, we had a movie called Sisu we put up off the back of -- we put the trailer on John Wick. We make money on those movies 93% of the time and very, very good returns. The nice thing about everybody is sort of pulling back and making less movies, which I don't think is going to stop in the near future, I think everybody is going to sort of really focus on fewer movies, that gives us the ability to -- that multiplatform business that I was talking about, that 30, 40, 50 times a year, for us to have no issue getting theater space. I mean we have -- if you look at right now, we had movie a couple of weeks ago, sort of in the spiritual space, which is Ordinary Angels, that's on target to make money for us. We came out with Jason Blum and came out with Imaginary last weekend, and that's right on track. It did about $10 million opening weekend and it would be very profitable for us because the movie didn't cost much. And then this weekend, we have -- what's the Mark Wahlberg movie?

Arthur the King.

Arthur the King. We acquired -- we didn't develop that, that came with the eOne transaction, and that will be in, I don't know, 2,500, 3,000 screens. We have no problem getting the screens and we have no problem piggybacking off the opportunity for us to cross-promote our movies.

Yes. Okay. That, I guess, actually, segues into my next question pretty well. You've provided fiscal 2025 EBITDA guidance for Lionsgate Studios of $370 million...

Before eOne.

Before eOne. So given the hit-driven nature of the Studio business and how difficult it's been lately for larger studios to predict their results, what gives you the confidence in being able to hit that kind of number even if -- even with your less volatile model? And maybe you could walk through the building blocks of that $370 million bet for us.

We've been around long enough to know, the last thing you want to do is put out guidance and file an S-1 and miss your numbers. So we're very confident in that number. But the growth is coming from -- the library is getting more valuable. New platforms are coming up. If you had said to me a couple -- even a year ago that video on demand or electronic sell-through or FAST channels were going to be significant contributors to us, I would have thought you were crazy. I mean FAST channels, come on. And now they're now launching internationally. Between FAST channels and some of these AVOD channels, that's going to be $125 million, very high-margin business for us. So we have a great deal of visibility. You look at our library, it is year in and year out, we exceed those numbers that we put out there. And it's -- and we have a great sales force that does that, one led by Jim Packer from Worldwide Distribution. But he's also got a rising tide. He would -- I call him the sandbagger because he always exceeds his numbers, but you have a rising tide because you have all these different platforms that are coming up. And in the theatrical business, just looking at Hunger Games' numbers the other night, we redid that franchise, Suzanne Collins, thank god wrote another book, and the theatrical business was great, did really well domestically, great internationally. But at the same time, it was in the movie theaters towards the end of the holidays, let's call it end of December, it was out on a premium VOD. PVOD didn't even exist. Why do we like premium VOD? Because it's $20. We keep the vast majority of the money, and it's a value proposition even at that price point for -- take a look at what -- half the country can't write a $500 check. So there are probably 5, 10 people, their families are getting together and they're watching the movie and they're not having to get parking or a babysitter or buy popcorn. And so what happens is, is that, that's another source. And that premium VOD did incredibly well at the same time the movie was in the theaters. So I like the -- I like where we are. I like the idea that we continue to grab market share. I don't know whether the theatrical business will ever be where it was prepandemic. But do I think it's going to get to 80%, 85%, 90%? Yes, I do. And if you said to me, why is that or why do you think that? I think that everybody is focusing on making better movies.

Yes. That's a great answer. Very helpful. Maybe we could shift to just the TV segment on the Studio segment of Lionsgate. It hit a rough patch this past quarter from an EBITDA perspective. Can you just walk us through why this is just a blip and profitability is going to bounce back the way you've kind of articulated?

Well, first, I'll say the strike. And that was a double whammy when you had writers and then you had actors as well. So that cost us -- I think it was $30 million. And I think even in our fiscal '25 numbers, from the end of fiscal '24, we probably, in our projections, have got another $15 million to $20 million to go because of -- it's just a lag period. But the best person to talk about sort of that lag and sort of what it's caught up is -- I mean we produce the shows for Starz. It's important to note also that all the Starz shows that, when we bought Starz, all those -- that IP that they own, I know you hate it when I say this, but all that IP, the Power franchise, et cetera, is staying inside the Studio. Everything that Jeff makes going forward on separation, he'll probably own or partially own and then there'll be some arm wrestling.

There's an intercompany deal, so I will always have access to those content for extended long period of time.

Yes. And I -- but the strike itself, it was painful. But we've got -- I got in trouble the other day because I said that we talked about a couple of significant pieces of IP that were going out in the television world that I think will probably have 6, 10 bidders for, which I still -- I believe is true. And -- but they said...

You can say it now because you've already said it.

I said -- I've already said it, yes. I'm going to have lunch with Stephenie Meyer, everybody knows who Stephenie Meyer is. Tomorrow, I'm flying back criss-cross. And she's the author of Twilight, which has just been an unbelievable franchise for us, unbelievable. And so we're going to go out with a television series. It will be an animated show, and I think it will be very interesting. The other one is a big action franchise, you got to figure out what it is, that we've rebooted again with, for example, sort of this offshoot of that, a spin of that of the sort. Ballerina is coming out of the John Wick universe. So -- but you might want to talk just a minute about sort of how you got whacked and how it hurt your -- it hurt you because -- hurting you since we're producing your shows hurt us.

The John Wick spinoff?

No, no, no. I'm not talking about the shows, the...

Strike.

Yes. I mean, so obviously, the strike -- obviously, if we shoot a year in advance, but finishing some of the shows and posters was kind of hard to do. And so we've got to move our slate around a little bit. And as you talked about, when you have delays on deliveries from the Studio, and you have to move your slate around our -- again, our strategy is so incumbent on lining up shows and taking deliveries. The world used to be like when the creators decided to give you the show and finish the show, you would put it on, right? Now for us, everything is so scheduled around churn reduction, lifetime value that when you have delays and you have to move things around, it actually really impacts the business. And so we saw that from the other side because of the production side. But we're kind of back to on schedule now. We did offer [ to synergistically ] go buy a couple of pieces of content from some co-pro partners in Europe to have on the shelf much like we did in COVID to make sure we didn't have content gaps. So I think we're kind of through that now. And I think we should -- both sides should be back to steady state in the coming quarter.

We have a bunch of shows that are shooting right now. We just started shooting this Seth Rogen show for Apple, and he plays as a studio executive. It's the most ridiculously funny show you've ever seen. And it pokes a lot of fun to everybody else in the business, but that's okay. I think it's...

Spartacus starts in New Zealand next week. Hunting Wives starts tonight in North Carolina. So there's a lot of production going on both sides right now.

And we're shooting -- and we're in the middle of 1 of our biggest hits we do with CBS and our co-production with BBC is Ghost, and that show is shooting right now. So I think we're back on track on the television side.

Yes.

What other content are you excited about between now and the end of fiscal '25, whether it's film or TV?

Well, I'll give you my -- this will probably be a headline deadline and Scott will get really mad at me because he just bought some stock in the open market, and he's pretty fiscally conservative in many ways. And so that was actually interesting to see him do it. And I swear, he bought it because he went to the set. We're shooting the Michael Jackson movie on the Sony lot. And he just came back and just said, that thing is going to be incredible. So am I excited about that, yes. I think that Michael, the biopic with all of the music and it's going to be -- and the kid, he's like -- I think he's a nephew or a grand nephew, he looked exactly like Michael, he dances like him, he sings like him and the supporting cast, Miles Teller playing John Braca who's a lawyer that negotiated The Beatles catalog, et cetera. It's -- and Fuqua, who's directing it, Antoine Fuqua, is just a terrific director, going all the way back to Training Day. So I'm really excited about that. I'm really excited about a couple of these horror films. These -- we think we've got a new franchise coming out, Strangers. We'll see how that goes. I think there's a couple -- I don't really care about the Academy Awards, to be honest with you. It's nice to be recognized, but I think we have some movies actually coming up that could be prestigious, at the same time, commercially successful. So that's always nice. I think Ballerina, yes, to be honest, is great and it -- Chad is taking over a lot of the reshoots that we're having, bigger action scenes, watching the -- he created that John Wick universe. And he's doing Highlander for us right now. So that feels very promising. I like our theatrical slate, I like our movie slate right now, and I think the library is just going to keep chugging along.

Yes. All right. Great. Well, we're out of time. So why don't we wrap up there? Thanks, Jeff. Thanks, Michael.

Okay. Thank you.

Thank you. And again, I apologize for being late.