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Lionsgate's Q2 Loss

As Lionsgate continues its battle with Carl Icahn and its push to merge with MGM, it reported that it swung to a second quarter loss. The studio announced its earnings after the bell Tuesday — a net loss of 22 cents per share, down from a net profit of 26 cents per share in the year-earlier quarter, and 25 percent higher revenue of $456.3 million.

CNBC.com

Why did the studio swing to a loss if it had big films like "The Expendables" and "The Last Exorcism" in the quarter?

Because of the additional costs of releasing two more films — double this quarter than a year ago. Each film release brings tens of millions of dollars of marketing and distribution — and much of the revenue doesn't come until down the line, not just from theatrical receipts, but also from pay TV and DVD revenue.

CEO Jon Feltheimer said in a statement that the company is still on track for its full-year quarters, and "we continued to generate strong momentum across our diverse slate of businesses, especially in television." Lionsgate's earnings call is Wednesday morning, when Feltheimer is sure to be asked plenty of questions about the status of Carl Icahn's $7.50 per-share tender offer for Lionsgate, which expires on Friday November 12.

Investors will likely also lob questions at Feltheimer and Vice Chairman Michael Burns about Lionsgate's proposed merger with MGM.

Though MGM debt holders rejected Lionsgate's offer and voted to send MGM into a pre-packaged bankruptcy, creating a new company run by Spyglass Entertainment's chiefs.

So what now? Lionsgate is proposing combining the two studios once MGM emerges from bankruptcy, which is expected to happen on December 2. The two companies are reportedly meeting to discuss this plan this week.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.