Now that the Harry Potter series is done, it’s only natural that Wall Street would start to wonder: What’s the next movie franchise that will drive teens and adults to the box office in droves? And two analysts today think they have an answer. Lionsgate’s The Hunger Games, a four-movie series based on Suzanne Collins’ trilogy about two teens in a post-apocalyptic society struggling to survive a life-or-death contest. PiperJaffrey’s James Marsh raised his target price for Lionsgate shares to $12 from $10 based largely on his expectation that the films will “provide a material and identifiable catalyst” for the company. Cowen and Co’s Doug Creutz used similar language to project that Lionsgate shares will “outperform the market by at least 20% over the next 12 months.” That would be a welcome change for Lionsgate. Many investors soured on the company while billionaire Carl Icahn battled to take control and DVD sales began to collapse for the industry. Lionsgate’s shares have appreciated just 5% over the last 12 months while the overall market was up 20%. But the analysts say investors will turn the page as they begin to feast on news about Hunger Games. Marketing will begin late this year for the March 2012 release. Marsh says he expects it to become “the highest grossing film of all time at Lionsgate” with $150M in domestic box office sales.
Lionsgate executives told Wall Street analysts this morning to expect big things from The Hunger Games, a series of four action films that the studio will release from the trilogy written by Suzanne Collins. COO Joe Drake said it was “the highest-selling film we’ve ever had” at the Cannes Film Festival and that overseas exhibitors consider it “the movie that can change their company.” Although Lionsgate wouldn’t disclose its budget for the films, Drake says Hunger Games could become an “outsized success” for Lionsgate. The studio says it bought the rights before the books became runaway bestsellers, and it has “retained the majority of the upside” in its talent and distribution deals.
On other matters following the company’s earnings report yesterday, Lionsgate says that it isn’t concerned about the public’s waning interest in 3D. “We never thought of 3D as a one-size-fits all solution to the movie business,” CEO Jon Feltheimer says. He added that Lionsgate’s recent deal to syndicate reruns of Mad Men to Netflix reflects his view that Internet streaming services can be “partners, not adversaries.” He hopes to “replicate these kinds of deals around the world.”
EXCLUSIVE: Gary Ross is in early talks to direct The Hunger Games, the first installment of the novel trilogy by Suzanne Collins. The film is a joint production between Lionsgate and Color Force’s Nina Jacobson. Filming will start next year with a script by Billy Ray, who rewrote a draft by the author. The huge sales of the trilogy make the film adaptations a potential game-changer for Lionsgate, the way that Twilight was for Summit Entertainment. It has been a coveted job among directors (Three More Directors Circle ‘The Hunger Games’), and Lionsgate picture chief Joe Drake and Jacobson spent the past two weeks meeting candidates that included Sam Mendes, David Slade (also a contender for the X-Men Origins: Wolverine 2 job), Andrew Adamson, Rupert Sanders, and Nanny McPhee Returns helmer Susanna White. There was also talk about Francis Lawrence. It’s unclear who stayed in or out as Lionsgate focused on Ross, who directed Pleasantville and Seabiscuit. He isn’t set yet, but he is the choice. Let the negotiating games begin. Mendes, for instance, bowed out of contention last Friday, and I’m told it was because the MGM picture is clearing up and it looks like production on 007 could begin by late summer or early fall, 2011 with Mendes at the helm and Daniel Craig back in the Aston Martin.