For Lions Gate, ‘The Expendables’ Are Shaping Up to Be Indispensable

Jason Statham returns as Lee Christmas in The Expendables 3. Credit: Millennium Films.

With so many blockbusters in theaters and on the way, you might not know that Millennium Films and Lions Gate Entertainment (NYSE: LGF  ) are back with another entry in The Expendables franchise.

I know, I know. The Expendables? Seriously? Yes, seriously.

While these films haven't meant as much to Lions Gate as The Hunger Games or even Divergent, they have done well. Expecting any less from The Expendables 3 when it reaches theaters on Aug. 15 would be a mistake. But don't take my word for it; have a look at the numbers:

The Expendables
The Expendables 2

Worldwide gross

$268.3 million

$311.9 million

Production budget

$82 million

$100 million

Est. profit before distribution (50% of worldwide gross minus production costs)

$52.15 million

$55.9 million

Lions Gate share (50%)

$26.1 million

$27.9 million

Est. marketing and distribution

$38 million

$40 million

DVD and Blu-ray sales

$74.4 million

$36.4 million


$62.5 million

$24.3 million

Sources:,, TMF estimates.

To be fair, these aren't perfect figures since financing arrangements can vary from movie to movie. Here, I estimated that Lions Gate would get a 50% cut of profits after producers Nu Image and Millennium Films covered their costs. Lions Gate would then pay marketing and distribution costs and collect the bulk of revenue from DVD, Blu-ray, and download sales. With each film, the company appears to have done well without taking on burdensome production costs.

What The Expendables means to Lions Gate
Not that production is necessarily a bad business. If anything, the first two installments of The Hunger Games franchise proved definitively that the right property could do wonders for Lions Gate stock. Distribution deals merely reduce the overall risk in Lions Gate's portfolio while offering some upside.

How much upside can we expect with The Expendables 3? That's tougher to say. Adding Harrison Ford, Mel Gibson, Kelsey Grammer, and Wesley Snipes, among others, to the ensemble cast probably pushed production costs over the $100 million mark. Clearing a higher hurdle won't be easy, especially with the much-touted Guardians of the Galaxy screening two weeks earlier.

Regardless, history says we can expect $300 million or more at the box office and at least $40 million in DVD and Blu-ray sales. Mix in download sales and licensing deals with the likes of Netflix, which is airing The Expendables 2 right now, and I think you've the makings of another solid profit producer, and a good reason to give Lions Gate stock a second look.

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The Expendables 3 opens on Aug. 15 in U.S. theaters. Sources: YouTube, Lions Gate.

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Tim Beyers

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at or send email to For more insights, follow Tim on Google+ and Twitter.

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