SCHEDULE 13D: Liberty Global and Subsidiary Disclose Strategic Stake in Newly Spun-Off Lionsgate Studios Corp.

Liberty Global Ltd. and its subsidiary, Liberty Global Ventures Limited, have filed a Schedule 13D disclosing their beneficial ownership of 2.5% of Lionsgate Studios Corp. common shares following the recent corporate separation.

Summary

• Liberty Global Ltd. and its wholly-owned subsidiary, Liberty Global Ventures Limited (LGVL), reported beneficial ownership of 7,035,969 Common Shares of Lionsgate Studios Corp. (the "Issuer").
• This ownership represents 2.5% of the Issuer's 285,688,681 Common Shares outstanding as of May 6, 2025.
• The shares were acquired on May 6, 2025, as a result of the "Separation Transactions," which saw Lions Gate Entertainment Corp. split its motion picture and television studio operations (now Lionsgate Studios Corp.) from its STARZ business (now Starz Entertainment Corp.).
• Prior to the separation, LGVL held 4,049,972 Class A and 2,500,000 Class B shares of Old Lionsgate, which converted into the current Common Shares and Starz Common Shares.
• The Reporting Persons entered into an Investor Rights Agreement, a Voting Agreement, and a Registration Rights Agreement with the Issuer and other parties, including MHR Fund Management LLC and its affiliated funds ("MHR" and "Mammoth Funds").
• Under the Investor Rights Agreement, Liberty Global has the right to nominate one director to the Issuer's Board as long as they beneficially own at least 5,000,000 Common Shares, with Michael T. Fries named as the initial designee.
• The Voting Agreement stipulates that Liberty Global will vote Common Shares in excess of 18.5% of the Issuer's outstanding voting power proportionally with other shareholders on certain major corporate transactions.
• Both Liberty Global and MHR have agreed to vote their shares in favor of each other's director nominees.
• The Registration Rights Agreement grants LGVL two demand registration rights and certain "piggyback" registration rights for its Common Shares, which terminate if ownership falls below 5,713,774 shares (2% of outstanding at separation) and they lose board representation.
• The Reporting Persons may be deemed to beneficially own an additional 37,867,658 Common Shares (approximately 13.3%) held by MHR and Dr. Rachesky due to the Investor Rights and Voting Agreements, though they do not admit to forming a "group" under SEC rules.

Sentiment

Score: 6

Explanation: The document is largely neutral, reporting a factual change in ownership due to a corporate spin-off. The associated agreements indicate a strategic, long-term interest and influence, which is mildly positive for stability and governance, but there are no immediate financial performance indicators.

Positives

• Liberty Global and LGVL have secured strategic influence over Lionsgate Studios Corp. through board representation rights, with Michael T. Fries appointed as the initial designee.
• The Investor Rights Agreement provides Liberty Global and MHR with pre-emptive rights on future Common Shares issued for cash, protecting their proportional ownership.
• The Registration Rights Agreement offers liquidity options for LGVL's stake, allowing them to register and potentially sell their shares under favorable terms.
• The structured separation of Lionsgate Entertainment Corp. into two distinct entities (Studios and Starz) may allow for more focused management and investment in each business segment.

Negatives

• The Voting Agreement limits Liberty Global's voting discretion on major corporate transactions for shares exceeding 18.5% of the Issuer's voting power, requiring proportional voting with other shareholders.

Risks

• The filing highlights that the Reporting Persons may be deemed to beneficially own shares held by MHR and Dr. Rachesky due to the agreements, potentially subjecting them to additional regulatory scrutiny or group-related liabilities, despite their disclaimer.
• The termination of registration rights is contingent on both share ownership thresholds and board representation, meaning a loss of either could impact LGVL's ability to easily divest shares.

Future Outlook

The Reporting Persons intend to act as strategic shareholders, engaging in discussions with the Issuer's Board and management regarding the company's operations, business, and financial condition. They reserve the right to acquire or dispose of additional securities based on various factors, including the Issuer's prospects, market conditions, and regulatory changes. No present plans for extraordinary corporate transactions, changes in management or capitalization, or other material changes to the Issuer's business or corporate structure are disclosed.

Management Comments

• "The undersigned hereby agree that the Statement on Schedule 13D, dated May 8, 2025, with respect to the Common Shares, no par value, of Lionsgate Studios Corp. is, and any amendments thereto executed by each of us shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k)(1) under the Securities and Exchange Act of 1934, as amended, and that this Joint Filing Agreement shall be included as an Exhibit to the Schedule 13D." (Joint Filing Agreement)
• "As strategic shareholders, the Reporting Persons may from time to time, through their designee (if any) to the Issuer's board of directors (the 'Issuer's Board') or otherwise, and subject to the terms of the Investor Rights Agreement and the Voting Agreement, engage in discussions with, and contribute their commercial expertise to, the Issuer's Board and the Issuer's management with respect to the management, operations, business, and financial condition of the Issuer and such other matters as the Reporting Persons may deem relevant to their investment in the Common Shares."

Industry Context

This filing is a direct consequence of a significant corporate restructuring within the media and entertainment industry, specifically the spin-off of Lionsgate's studio business from its premium subscription platform. This trend of separating content creation/distribution assets is observed across the industry, often aimed at unlocking shareholder value by allowing investors to choose exposure to distinct business models (e.g., pure-play studio vs. streaming service). Liberty Global's continued strategic involvement, including board representation and voting agreements, indicates a long-term interest in the studio business, aligning with broader industry trends of strategic partnerships and content ownership.

Comparison to Industry Standards

• The corporate separation of Lionsgate's studio and Starz businesses mirrors similar strategic moves by other media conglomerates, such as Warner Bros. Discovery's spin-off of its studio assets from AT&T, or Paramount Global's ongoing considerations regarding its various segments. These actions are often driven by a desire to create more focused entities that can be valued independently by the market.
• Liberty Global's beneficial ownership of 2.5% is a minority stake, but the associated Investor Rights and Voting Agreements, particularly the right to a board seat and pre-emptive rights, are standard mechanisms for strategic investors to maintain influence and protect their investment in such spin-off scenarios.
• The proportional voting requirement for shares exceeding 18.5% of voting power is a common governance mechanism in strategic partnerships, designed to prevent a single large shareholder from unilaterally controlling major corporate decisions while still allowing them significant influence up to a certain threshold.

Management Changes

Corporate Governance

Related Party Transactions

• The Investor Rights Agreement, Voting Agreement, and Registration Rights Agreement are entered into between the Issuer (Lionsgate Studios Corp.), Liberty Global, LGVL, MHR, and the Mammoth Funds. These agreements define the ongoing relationship and rights between significant shareholders and the Issuer following the corporate separation.

Stakeholder Impact

• Shareholders: The filing clarifies the ownership structure post-spin-off and the governance agreements in place, providing transparency on how major shareholders will interact with the company. The pre-emptive rights protect existing shareholders' proportional ownership in future capital raises. The voting agreements provide stability in board composition.
• Management: The presence of a Liberty Global designee on the board, along with MHR's designees, means management will have strategic input and oversight from significant shareholders.
• Employees: No direct impact mentioned, but a stable ownership and governance structure can contribute to long-term company stability.

Next Steps

• Liberty Global and LGVL may engage in discussions with Lionsgate Studios Corp.'s board and management regarding the company's operations, business, and financial condition.
• The Reporting Persons may acquire additional securities or dispose of their current holdings in the future, subject to market conditions and strategic considerations.
• Michael T. Fries is expected to serve as Liberty Global's designee on the Issuer's Board.

Key Dates

Keywords

Lionsgate Studios Corp., Liberty Global, Schedule 13D, Beneficial Ownership, Corporate Separation, Spin-off, Investor Rights Agreement, Voting Agreement, Registration Rights Agreement, Common Shares, SEC Filing, Media and Entertainment, Studio Business, Strategic Investment