Lionsgate Expands Into Television Syndication Business, Acquires Debmar-Mercury

Debmar-Mercury to Continue Operation as Wholly-Owned Subsidiary Leading Distributor Owns Distribution Rights to Comedy Central's SOUTH PARK Franchise, Tyler Perry's Original Comedy Series HOUSE OF PAYNE and Other Key Program Assets

SANTA MONICA, Calif. and VANCOUVER, British Columbia, July 12 -- Lionsgate (NYSE: LGF), the leading independent filmed entertainment studio, announced today that it has acquired top television distributor Debmar-Mercury LLC. Helmed by principals Mort Marcus and Ira Bernstein, the company will continue to operate under the Debmar-Mercury banner as a wholly-owned subsidiary.

Debmar-Mercury is one of the top independent distributors of television programming and feature film packages in the industry. The company owns distribution rights to Comedy Central's blockbuster animated sitcom SOUTH PARK, the Lionsgate one-hour drama thriller THE DEAD ZONE, the Sci-Fi Channel's FARSCAPE series, produced by Hallmark Entertainment and the Jim Henson Company, and numerous other shows as well as two major feature film packages from Revolution Studios and a feature film package from Lionsgate.

Debmar-Mercury also recently completed a successful test of Tyler Perry's (DIARY OF A MAD BLACK WOMAN, MADEA'S FAMILY REUNION and the upcoming DADDY'S LITTLE GIRL) first-run, original comedy series HOUSE OF PAYNE with select major market stations representing a cross section of key station groups. Lionsgate's acquisition of Debmar-Mercury extends the company's relationship with Tyler Perry across not only feature film and video product but original television programming as well. The acquisition follows on the heels of Lionsgate's successful move into international feature film and library self-distribution through the October 2005 acquisition of UK-based distributor Redbus (subsequently renamed Lionsgate U.K.). It also creates a major new distribution portal for Lionsgate by giving the Company the capacity to syndicate its own television programming and feature film packages as well as creating a new television distribution revenue stream from third-party franchise properties.

"We again have the opportunity to combine our resources with a culturally similar, entrepreneurial company that is a leader in its market segment and whose principals we know well," said Lionsgate Chief Executive Officer Jon Feltheimer. "Debmar-Mercury has become one of the leading independent distributors in the industry. With our fiscal 2007 slate of nine prime time television series, the acquisition of Debmar-Mercury's television distribution capabilities across new and traditional media outlets is a natural growth opportunity for our content business."

Feltheimer noted that the acquisition continues to further Lionsgate's game plan of broadening its distribution footprint and aggregating rights to important content and properties.

"We are delighted to expand our current relationship with Lionsgate, since combining their television content and feature film properties with our distribution expertise is a perfect strategic fit," said Marcus. "Lionsgate's willingness to finance us and allow us to continue to operate in an entrepreneurial manner was an important and attractive component of this agreement for us."

"This transaction provides us with a great platform to continue to grow our distribution business with the same entrepreneurial spirit that made us a success," said Bernstein.

Debmar-Mercury is already preparing the syndication launch of Lionsgate's thriller THE DEAD ZONE, which has just debuted in its fifth season on USA Network. Bernstein and Marcus each have more than 20 years' experience in television distribution. Bernstein formed his own company, Mercury Entertainment, and previously headed domestic distribution operations for Rysher Entertainment (THE HIGHLANDER) as well as serving as an international distribution executive for Lionsgate. Marcus, who founded Debmar Studios, was previously head of Buena Vista Television, the domestic television distribution arm of The Walt Disney Company.

Debmar-Mercury is a worldwide production and distribution media company specializing in network, cable, syndication, VOD/Pay-Per-View and Pay TV. The company was formed by the recent merger of Debmar Studios and Mercury Entertainment. In addition to its large catalogue of distribution rights, Debmar-Mercury also provides strategic assessments of market opportunities in the motion picture, home video, cable programming, VOD/Pay-Per-View and other television sectors.

Lionsgate is the leading independent filmed entertainment studio. Fresh off the Best Picture Academy Award (R) -winning CRASH, its second consecutive year grossing more than $300 million at the domestic box office and the recent unveiling of an upcoming slate of nine prime time television series, Lionsgate is a premier producer and distributor of motion pictures, television programming, home entertainment, family entertainment and video-on-demand content. Its prestigious and prolific library of more than 5,000 titles is a valuable source of recurring revenue and a foundation for the growth of the Company's core businesses. The Lionsgate brand is synonymous with original, daring, quality entertainment in markets around the globe.

SOURCE Lionsgate
http://www.lionsgate.com