Restructuring and Other

12 Months Ended

Mar. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring and other includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable. During the years ended March 31, 2020 and 2019, the Company also incurred certain other unusual charges related to programming write-downs, and during the year ended March 31, 2020, the COVID-19 global pandemic, which are included in direct operating and distribution and marketing expense in the consolidated statements of operations. The following table sets forth restructuring and other and these unusual programming and COVID-19 related charges and the statement of operations line items they are included in for the years ended March 31, 2020, 2019 and 2018:



	Year Ended
	March 31,
	2020		2019		2018
	(Amounts in millions)
Restructuring and other:
Severance⁽¹⁾
Cash	$	12.3	$	31.5	$	21.5
Accelerated vesting on equity awards (see Note 14)	0.6		16.0		2.9
Total severance costs	12.9		47.5		24.4
COVID-19 related costs included in restructuring and other⁽²⁾	0.3		—		—
Transaction and related costs⁽³⁾	11.1		30.5		22.2
Development expense⁽⁴⁾	—		—		13.2
Total Restructuring and Other	24.3		78.0		59.8

Programming and content charges and COVID-19 related charges not included in restructuring and other:
Programming and content charges included in direct operating expense⁽⁵⁾	76.5		35.1		—
COVID-19 related costs included in:
Direct operating expense⁽⁶⁾	46.0		—		—
Distribution and marketing expense⁽⁶⁾	4.2		—		—
Total restructuring and other, programming and content charges, and COVID-19 related costs	$	151.0	$	113.1	$	59.8

_______________________


(1)	Severance costs in the fiscal years ended March 31, 2020, 2019 and 2018 were primarily related to restructuring activities in connection with recent acquisitions, and other cost-saving initiatives.


(2)	During the year ended March 31, 2020, the Company has incurred certain costs including costs primarily related to transitioning the Company to a remote-work environment and other incremental costs associated with the COVID-19 global pandemic.

(3)

Transaction and related costs in the fiscal years ended March 31, 2020, 2019 and 2018 reflect transaction, integration and legal costs associated with certain strategic transactions, restructuring activities and legal matters. In fiscal 2019, these costs were primarily related to the legal fees associated with the Starz class action lawsuits and other matters and, to a lesser extent, costs related to the acquisition of 3 Arts Entertainment and other strategic transactions. In fiscal 2018, these costs were primarily related to the sale of EPIX (see Note 5), the legal fees associated with the Starz class action lawsuits and other matters, and the integration of Starz.


(4)	Development expense in the fiscal year ended March 31, 2018 represents write-downs resulting from the restructuring of the Motion Picture business in connection with the acquisition of Good Universe and new management's decisions around the creative direction on certain development projects which were abandoned in the fiscal year ended March 31, 2018.


(5)	In the fiscal years ended March 31, 2020 and 2019, in connection with recent management changes, the Company implemented changes to its programming strategy and broadcasting strategy including programming acquired or produced under prior management. As a result, the Company recorded certain programming and content charges of $76.5 million and $35.1 million in fiscal 2020 and 2019, respectively.

(6)

In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, including the worldwide closure of most theaters, international travel restrictions and the pausing of motion picture and television productions, during the fourth quarter of fiscal 2020 the Company incurred certain incremental costs which were expensed in the period. The costs included in direct operating expense primarily represent certain motion picture and television impairments and development charges associated with changes in performance expectations or the feasibility of completing the project, and costs associated with the pausing of productions, including certain cast and crew costs and incremental costs associated with bad debt reserves. In addition, the costs included in distribution and

marketing expense primarily consist of early marketing spends for film releases and events that have been canceled or delayed and will provide no economic benefit. The majority of the COVID-19 related costs relate to the Motion Picture segment. The Company is in the process of seeking insurance recovery for some of these costs, which cannot be estimated at this time, and therefore have not been recorded in the consolidated financial statements.

Changes in the restructuring and other severance liability were as follows for the years ended March 31, 2020, 2019 and 2018:



	Year Ended
	March 31,
	2020			2019			2018
	(Amounts in millions)
Severance liability
Beginning balance	$	21.2		$	14.7		$	22.2
Accruals	12.3			31.5			21.5
Severance payments	(22.4		)	(25.0		)	(27.9		)
Other⁽¹⁾	—			—			(1.1		)
Ending balance⁽²⁾	$	11.1		$	21.2		$	14.7

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(1)	In the year ended March 31, 2018, other represents noncash reductions related to the settlement of certain liabilities relating to employee compensation with equity instruments.

(2)

As of March 31, 2020, the remaining severance liability of approximately $11.1 million is expected to be paid by March 31, 2021.