Lions Gate Cuts Staff, Jettisons African-American Movie Label

(Bloomberg) -- Lions Gate Entertainment Corp., the studio that made “The Hunger Games” films, is eliminating jobs and getting rid of the Codeblack business that produced and distributed films for African-American audiences.

The company is looking to streamline marketing and distribution, film group Chairman Joe Drake said Friday in an internal email. About 25 people were let go, most of them from the movie division in Southern California, according to a person with knowledge of the matter who wasn’t authorized to speak publicly and asked not to be identified.

Codeblack will become a separate company, led by founder Jeff Clanagan, who launched the label in 2012, the company said. It distributed the surprise hit about rapper Tupac Shakur, “All Eyez on Me.” Lions Gate is also the home of Tyler Perry, one of the most successful black filmmakers. Lions Gate employs about 1,600 people.

Lions Gate, based in Santa Monica, California, is reducing costs to stay competitive in a movie business that’s increasingly dominated by conglomerates like Walt Disney Co., AT&T Inc. and Comcast Corp. That’s squeezed on smaller distributors like Lions Gate -- at a time when the entire industry is under pressure to create more opportunities for women and minorities.

Consolidating functions will help the company with marketing and distribution decisions, Drake said.

Lions Gate has struggled at the box office, ranking seventh in domestic sales last year, according to Box Office Mojo. Its biggest North American release, “A Simple Favor,” took in just $53.5 million in North American theaters.

©2019 Bloomberg L.P.