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Restructuring and Other | 9 Months Ended
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Dec. 31, 2023
Restructuring and Related Activities [Abstract] |
Restructuring and Other | Restructuring and Other Restructuring and other includes restructuring and severance costs, certain transaction and other costs, and certain unusual items, when applicable. During the three and nine months ended December 31, 2023 and 2022, the Company also incurred certain other unusual charges or benefits, which are included in direct operating expense in the consolidated statements of operations and are described below. The following table sets forth restructuring and other and these other unusual charges or benefits and the statement of operations line items they are included in for the three and nine months ended December 31, 2023 and 2022:
| Three Months Ended |  | Nine Months Ended
| December 31, |  | December 31,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (Amounts in millions)
Restructuring and other: |  |  |  |  |  |  |
Content and other impairments(1) | $ | 77.8 |  |  | $ | 80.8 |  |  | $ | 317.4 |  |  | $ | 299.7 |
Severance(2) |  |  |  |  |  |  |
Cash | 23.9 |  |  | 2.4 |  |  | 32.9 |  |  | 14.8 |
Accelerated vesting on equity awards (see Note 12) | 6.8 |  |  | 1.5 |  |  | 8.4 |  |  | 2.1 |
Total severance costs | 30.7 |  |  | 3.9 |  |  | 41.3 |  |  | 16.9 |
COVID-19 related charges included in restructuring and other | — |  |  | — |  |  | — |  |  | 0.1 |
Transaction and other costs(3) | 8.4 |  |  | (9.4) |  |  | 12.3 |  |  | (0.2) |
Total Restructuring and Other | 116.9 |  |  | 75.3 |  |  | 371.0 |  |  | 316.5 |
Other unusual charges not included in restructuring and other or the Company's operating segments: |  |  |  |  |  |  |
Content charges included in direct operating expense(4) | — |  |  | — |  |  | — |  |  | 7.2 |
COVID-19 related charges (benefit) included in direct operating expense(5) | (0.1) |  |  | (1.8) |  |  | (0.5) |  |  | (8.8) |
Total restructuring and other and other unusual charges not included in restructuring and other | $ | 116.8 |  |  | $ | 73.5 |  |  | $ | 370.5 |  |  | $ | 314.9 |
_______________________ (1)Media Networks Restructuring: In fiscal 2023, the Company began a plan to restructure its LIONSGATE+ business, which initially included exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan), and identifying additional cost-saving initiatives. This plan included a strategic review of content performance across Starz's domestic and international platforms, resulting in certain programming being removed from those platforms and written down to fair value. In July 2023, in connection with a modification to shorten a long-term distribution contract, the Company decided to shut down the LIONSGATE+ service in Latin America. During the nine months ended December 31, 2023, the Company continued executing its restructuring plan, including its evaluation of the programming on Starz's domestic and international platforms. In connection with this review, the Company cancelled certain ordered programming, and identified certain other programming with limited strategic purpose which was removed from the Starz platforms and abandoned by the Media Networks segment. In addition, as a result of the continuing review of its international territories, in order to continue growing the profitability of STARZ and given the economic and industry challenges in the United Kingdom ("U.K."), the Company has made the strategic decision to shut down the LIONSGATE+ service in the U.K. market, resulting in additional content impairment charges. As a result of these restructuring initiatives, the Company recorded content impairment charges related to the Media Networks segment in the three and nine months ended December 31, 2023 of $77.8 million and $317.4 million, respectively (three and nine months ended December 31, 2022 - $80.8 million and $293.8 million, respectively). The Company has incurred impairment charges from the inception of the plan through December 31, 2023 amounting to $696.7 million. Under the current restructuring plan and ongoing strategic content review, the Company estimates it will incur additional charges ranging from approximately $30 million to $55 million related to certain contractual content commitments or programming content impairment charges, among other items, related to territories exited or to be exited and content to be removed from its services. The net future cash outlay is estimated to range from approximately $145 million to $170 million, which includes contractual commitments on content in territories being exited or to be exited, and payments on the remaining amounts payable for content removed or that may be removed from its services. The amounts above will depend on the results of its strategic content review and amounts recoverable from alternative distribution strategies, if any, on content in domestic and foreign markets. As the Company continues to evaluate the Media Networks business and its current restructuring plan in relation to the current micro and macroeconomic environment and the announced plan to separate the Company's Starz business (i.e., Media Networks segment) and Studio Business (i.e., Motion Picture and Television Production segments), including further strategic review of content performance and its strategy on a territory-by-territory basis, the Company may decide to expand its restructuring plan and exit additional territories or remove certain content off its platform in the future. Accordingly, the Company may incur additional content impairment and other restructuring charges beyond the estimates above. Other Impairments: Amounts in the nine months ended December 31, 2022 also include an impairment of an operating lease right-of-use asset related to the Studio business and corporate facilities amounting to $5.8 million associated with a portion of a facility lease that will no longer be utilized by the Company. The impairment reflects a decline in market conditions since the inception of the lease impacting potential sublease opportunities, and represents the difference between the estimated fair value, which was determined based on the expected discounted future cash flows of the lease asset, and the carrying value. (2)Severance costs were primarily related to restructuring activities and other cost-saving initiatives. In the three and nine months ended December 31, 2023, amounts were due to restructuring activities including integration of the acquisition of eOne, LIONSGATE+ international restructuring and our Motion Picture and Television Production segments. (3)Transaction and other costs in the three and nine months ended December 31, 2023 and 2022 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with certain legal matters. In the nine months ended December 31, 2023, transaction and other costs also includes a benefit of $3.8 million associated with an arrangement to migrate subscribers in some of the exited territories to a third-party in connection with the LIONSGATE+ international restructuring. In the three and nine months ended December 31, 2022, transaction and other costs includes a benefit of $11.0 million for a settlement of a legal matter related to the Media Networks segment. (4)In the nine months ended December 31, 2022, the amounts represent development costs written off as a result of changes in strategy across the Company's theatrical slate in connection with certain management changes and changes in the theatrical marketplace in the Motion Picture segment. These charges are excluded from segment results and included in amortization of investment in film and television programs in direct operating expense on the unaudited condensed consolidated statement of operations. (5)Amounts include incremental costs incurred, if any, due to circumstances associated with the COVID-19 global pandemic, net of insurance recoveries of $0.1 million and $0.7 million in the three and nine months ended December 31, 2023, respectively (three and nine months ended December 31, 2022 - insurance recoveries of $2.8 million and $10.7 million, respectively). In the three and nine months ended December 31, 2023 and 2022, insurance recoveries exceeded the incremental costs expensed in the period, resulting in a net benefit included in direct operating expense. The Company is in the process of seeking additional insurance recovery for some of these costs. The ultimate amount of insurance recovery cannot be estimated at this time. Changes in the restructuring and other severance liability were as follows for the nine months ended December 31, 2023 and 2022:
| Nine Months Ended
| December 31,
| 2023 |  | 2022 |  |
| (Amounts in millions)
Severance liability |  |  |  |  |
Beginning balance | $ | 8.7 |  |  | $ | 1.5 |  |  |
Accruals | 32.9 |  |  | 14.8 |  |  |
Severance payments | (12.1) |  |  | (5.0) |  |  |
Ending balance(1) | $ | 29.5 |  |  | $ | 11.3 |  |  |
_______________________ (1)As of December 31, 2023, the remaining severance liability of approximately $29.5 million is expected to be paid in the next 12 months.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//420/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
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