FEATURE — Spring 2006


Seizing the Lion’s Share

Leading the pride at Lionsgate is powerful strategist and entrepreneur Jon Feltheimer, the CEO whose agile indie studio is captivating audiences, critics, and shareholders.

By Judy H. Watts

Moviegoers everywhere are discovering that when the word Lionsgate appears on screen, the film that unfolds will equal releases from the motion-picture mega-studios that tower and sprawl in the Los Angeles basin. Contributing to the ongoing national conversation have been such Lionsgate hits as Fahrenheit 9/11, the Academy Award–winning Monster’s Ball, and the Oscar contender Crash, a scathing portrayal of race relations in post-9/11 L.A.

But not much else about the independent studio whose stock has soared over the last six years can be compared with the “majors.” (Lionsgate is the largest production and distribution company that is not owned by any Hollywood studio.) Conspicuously absent from this indie enterprise are grandiose architecture, ostentatiously furnished quarter-acre offices, corporate jets and helicopters, and other artifacts of power. Even more notably, in its Santa Monica headquarters next door to L.A., not a mogul is to be found.

Instead, there is Jon Feltheimer. Quietly self-assured, calmly intense, this CEO looks like an actor devoid of pretense. He meets colleagues and visitors in a suite of two small and comfortable rooms; in one is a chess set fashioned from old automobile parts. (Feltheimer has a fierce chess rivalry with partner Michaels Burns, who is vice chairman of Lionsgate.) The other room is airy and modern, with family photographs and original Hirschfelds on the wall, a big-screen television tuned to CNBC when not being used to view movie trailers with his staff, and a white, marble-topped table—round, “to encourage collegiality.”

Empowering employees

Fittingly, communication is central to Feltheimer’s operating philosophy. The head of every major division has an office on his floor: Motion Pictures; Home Entertainment (DVDs, videotapes, or UMDs ranging from Open Water to Saturday Night Live to Will and Grace); Family Home Entertainment (Barbie; Clifford the Big Red Dog; Care Bears); Television, one of the company’s fastest-growing businesses (The Dead Zone; Missing; Weeds; Wildfire); CinemaNow, broadband video-on-demand; and a new Documentary division (Werner Herzog’s Grizzly Man; VH1’s upcoming The U.S. vs. John Lennon; and Showtime’s The Third Terrorist).

Among Lionsgate’s hit films is Crash, which takes a provocative, unflinching look at the complexities of racial tolerance in contemporary America.

“We talk every day and have a meeting of division heads once a week,” Feltheimer, who is also Lionsgate’s co-chairman, says. “This [constant exchange] gives us the ability to react very quickly—to stay ahead of the curve and be very entrepreneurial. In a highly competitive business, this is one of our great strengths. By the time other studios say, ‘Oh, my god, look: Lionsgate is doing this or that, so we’ve got to do that,’ we’ve already made another shift!”

Against the backdrop of an industry infamous for bloated egos, vicious in-fighting, and rampant turnover, Feltheimer has created at Lionsgate a culture of respect and stability. “Every single employee has stock options,” he says, “and they care about the company. And because people who work for me are empowered to make decisions for which they are accountable, they have a reason to stay at Lionsgate instead of going to a larger studio where perhaps they could get paid more but wouldn’t have a sense of fulfillment.”

Says Peter Wilkes, head of investor relations and corporate communications, who has known Feltheimer for 15 years: “Jon attracts a very, very high degree of loyalty. Of the 15 top executives at Lionsgate, 13 have been here for four or more years. That’s unheard of in this business.”

The power Feltheimer gives to his people pays off in other ways, too. For example, Peter Block, president of Lionsgate’s motion picture acquisition business, purchased the first Saw horror film and developed its franchise. Saw II grossed more than $85 million in ticket sales at the domestic box office. The numbers were huge for the company—and the CEO—the New York Times dubbed “the movie Midas” in March 2005.

Will & Grace Season 4 is one of Lionsgate’s Home Entertainment division releases, as well as Live from New York: SNL — The First Five Years.

Serving underserved audiences

Feltheimer came to Lionsgate from Sony Pictures Entertainment in 2000 with a defining set of accomplishments. He graduated a semester early from Washington University in 1972 with honors in economics. (Born in Brooklyn and raised in Roslyn, Long Island, he says he “was allowed to be entrepreneurial” at the University, where he crafted his own course of study.) He headed to Los Angeles, where he worked days as an investment broker and nights as guitarist and singer with his rock band, Lightheart. He also plays piano, clarinet, saxophone, and bassoon.

Next he co-founded a company that managed singers and songwriters; seven years later, he joined New World Entertainment and launched a television division that became the company’s most valuable property. Sony acquired some of those assets in 1991 and appointed Feltheimer president of TriStar Television, which was little more than a logo until he put it on the dial. Once at Lionsgate, he purchased both Trimark and Artisan Entertainment, giving the indie a tremendous library of more than 5,000 film, television, DVD, and video titles. With control of worldwide distribution to every type of outlet, including Sony PlayStations, that collection is the reliable money spigot of Lionsgate.

Feltheimer’s business plan for Lionsgate filled just three-fourths of a page when he wrote it in December 1999; exactly the same plan is in place today. Practicing discipline and cost-control, the company “serves underserved audiences in a way that provides a sustainable competitive advantage”—whether that means focusing on daring and provocative material, or “genre films” that appeal to a particular audience. The result: Revenues at Lionsgate are five times what they were in 2000, and the shareholder base is the rival of all the majors.

In April 2006, Lionsgate, 2929 Entertainment, and Starbucks Entertainment will release Akeelah and the Bee, a story of a precocious 11-year-old, Akeelah Anderson (right, Keke Palmer), from South Los Angeles. With a gift for words, Akeelah is tutored by Dr. Joshua Larabee (left, Laurence Fishburn), winning a spot in the Scripps National Spelling Bee, and, in turn, uniting a neighborhood with her courage.

Fortunately “very stress-tolerant,” Feltheimer is also “very entrepreneurial” and willing to take informed and creative chances. “If people say I shouldn’t do something, I don’t listen simply because it’s never been tried.

“I use my right brain as well as my left brain here,” Feltheimer adds. He likes to be part of choosing films, for example, and reads scripts on weekends.

So what kind of working hours does the company keep? “We’re 12 hours a day, seven days a week,” Feltheimer says of his top executives. He himself regularly puts in up to 15 hours, five days a week. “That’s what I would call our schedule.”

He treasures his weekends, which he spends with his wife, Laurie, and children, Jillian, 13; Maya, 6; and Jack, 4. Time permitting, he plays 12-handicap golf.

And since L.A. is a town where high-profile political affiliations tend to be tallied publicly, a recent visitor asked about a news account of his loyalties. Is he a Democrat? (A nanosecond’s pause.) “I am.”

Finally, of the potential to persuade—and perhaps even to foment change—through films, Feltheimer says: “I love movies that inspire. I love movies that create awareness and educate. But that’s not our job.” (“I also stand up for our right to make movies like Saw, which scare the heck out of people,” he adds.)

“My job is to build a sustainable, viable company that creates shareholder value, because that’s what a CEO’s responsibility is.”

So what’s next? Feltheimer says (with no hesitation at all): “More!”

Judy H. Watts is a free-lance writer based in Santa Barbara, California, and a former editor of this magazine.

All images, except portrait of Jon Feltheimer, are courtesy of Lionsgate Publicity.