XML 53 R22.htm IDEA: XBRL DOCUMENT

Capital Stock

12 Months Ended

Mar. 31, 2026

Equity and Share-based Compensation [Abstract]

(a) Common Shares

As described in Note 1, in connection with the completion of the Starz Separation and related transactions, pre-transaction Old Lionsgate Class A shareholders received one and twelve one-hundredths (1.12) Lionsgate Common shareholders for each Class A share held and pre-transaction Old Lionsgate Class B Shares received one Lionsgate Common Share for each Class B Share held. Pre-transaction Legacy Lionsgate Studios shareholders, other than Old Lionsgate, received, in exchange for each Legacy Lionsgate Studios Common Share they held, LG Studios Flip Shares.

As of March 31, 2026, the Company has an unlimited number of authorized shares to issue.

As of March 31, 2025, the Company had 500 million authorized Class A voting shares, of which 83.7 million had been issued and 500 million authorized Class B non-voting shares, of which 156.8 million had been issued.

(b) Preferred Shares

The Company has 200 million authorized shares of preferred stock with no par value. No shares have been issued as of March 31, 2026.

On May 6, 2025, the Company’s Board of Directors declared a dividend of one common share purchase right (a “Right”) for each outstanding Lionsgate Common Share, and adopted a shareholder rights plan, as set forth in the Shareholder Rights Agreement dated as of May 7, 2025 (the “Rights Agreement”), by and between the Company and Computershare Investor Services, Inc., as rights agent. The Rights may be exercised only when a holder has acquired 15% or more of the Company’s outstanding common shares. Each Right entitles the holder to purchase one common share at an exercise price of $32.00. The Board of Directors may redeem the Rights at any time, before the Rights are exercisable or expired, for $0.001 per Right. As of March 31, 2026, no rights have been exercised or redeemed. All Rights expired on May 7, 2026.

(d) Share-based Compensation

Incentive Plans. Prior to the Starz Separation, the Company maintained the Lions Gate Entertainment Corp. 2023 Performance Incentive Plan (the “2023 Plan”) which provided for the granting of stock options, share appreciation rights, restricted stock, restricted share units, stock bonuses and other forms of equity awards, as well as certain cash bonus awards. Persons eligible to receive awards under the 2023 Plan included directors of the Company, officers or employees of the Company or any of its subsidiaries, and certain consultants and advisors to the Company or any of its subsidiaries.

On May 6, 2025, as part of the Starz Separation, the Company assumed the 2023 Plan, and the plan was amended and restated as the Lionsgate Studios Corp. 2025 Performance Incentive Plan (the “Lionsgate 2025 Plan”), and became effective, with respect to 58 million Lionsgate Common Shares. On May 6, 2025, the Company became the sponsor of the Lionsgate 2025 Plan. All awards outstanding immediately prior to the completion of the Starz Separation under the equity plans of Old Lionsgate and held by employees or directors who became employees or directors of Lionsgate after the Starz Separation, or by former employees (regardless of the division in which such former employee served), were converted into awards of the Company under the Lionsgate 2025 Plan, except that awards of individuals who will be serving as non-employee directors of both the Company and Starz were only partially converted into awards under the Lionsgate 2025 Plan.

The table below presents common shares reserved for future issuance:


			March 31, 2026
			(Amounts in millions)
Stock options and share appreciation rights (“SARs”) outstanding			16.9
Restricted share units (“RSUs”) - unvested			15.9
Common shares available for future issuance			16.5
Shares reserved for future issuance			49.3

Share-based Compensation Expense. The measurement of all share-based awards uses a fair value method and the recognition of the related share-based compensation expense in the consolidated financial statements is recorded over the requisite service period. As share-based compensation expense recognized in the Company’s consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures that are not expected to vest.

The Company recognized the following share-based compensation expense during the years ended March 31, 2026, 2025 and 2024:


	Year Ended March 31,
	2026		2025		2024
	(Amounts in millions)
Share-Based Compensation Expense:
Stock options	$	1.0	$	0.8	$	2.2
Restricted share units and other share-based compensation	71.0		50.6		58.5
Share appreciation rights	0.5		0.7		1.5
	72.5		52.1		62.2
Impact of accelerated vesting on equity awards (1)	5.5		4.9		8.0
Total share-based compensation expense	$	78.0	$	57.0	$	70.2

Tax impact(2)	(12.9)		(9.8)		(13.7)
Reduction in net income	$	65.1	$	47.2	$	56.5

_______________________

(1)Represents the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.

(2)Represents the income tax benefit recognized in the statements of operations for share-based compensation arrangements prior to the effects of changes in the valuation allowance.

Share-based compensation expense, by expense category, consisted of the following:


	Year Ended March 31,
	2026		2025		2024
	(Amounts in millions)
Share-Based Compensation Expense:
General and administration	$	72.5	$	52.1	$	62.2
Restructuring and other	5.5		4.9		8.0
Total share-based compensation expense	$	78.0	$	57.0	$	70.2

Stock Options and SARs

Stock options and SARs are generally granted at exercise prices equal to or exceeding the market price of the Company’s Common Shares at the date of grant. Substantially all stock options vest ratably over one to five years from the grant date based on continuous service and expire seven to ten years from the date of grant. The Company satisfies stock option exercises with newly issued shares.

The following table presents the stock option and SARs activity that occurred during the year ended March 31, 2026:


	Stock Options and SARs
	Old Lionsgate Class A Voting Shares				Old Lionsgate Class B Non-Voting Shares				Lionsgate
	Number of Shares		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(Amounts in millions, except for weighted average exercise price and years)
Outstanding at March 31, 2025	2.3		$	23.10	14.8		$	13.86	—		$	—
Granted	—		$	—	—		$	—	—		$	—
Options exercised	—		$	—	—	(1)	$	7.13	—		$	—
Forfeited or expired	—	(1)	$	7.70	—	(1)	$	11.29	—		$	—
Outstanding at May 6, 2025	2.3		$	23.09	14.8		$	13.86	—		$	—
Conversion	(2.3)		$	—	(14.8)		$	—	17.1		$	15.09
Granted	—		$	—	—		$	—	0.2		$	8.38
Options exercised	—		$	—	—		$	—	—	(1)	$	7.98
Forfeited or expired	—		$	—	—		$	—	(0.4)		$	29.34
Outstanding at March 31, 2026	—		$	—	—		$	—	16.9		$	14.67	2.96	$	7.60
Vested or expected to vest at March 31, 2026	—		$	—	—		$	—	16.9		$	14.67	2.96	$	7.60
Exercisable at March 31, 2026	—		$	—	—		$	—	16.8		$	14.69	2.94	$	7.60

_______________________

(1)Represents less than 0.1 million shares.

The total intrinsic value of options exercised during the year ended March 31, 2026 was $0.1 million (2025 - $0.2 million, 2024 - $0.2 million).

During the year ended March 31, 2026, less than 0.1 million shares (2025 - less than 0.1 million shares, 2024 - less than 0.1 million shares) were cancelled to fund withholding tax obligations upon exercise of options.

The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton (“BSM”) valuation model. The following table presents the weighted average grant-date fair value of options granted in the years ended March 31, 2026, 2025 and 2024, and the weighted average applicable assumptions used in the BSM model for stock options and SARs granted during the years then ended:


	Year Ended March 31,
	2026	2025	2024
Weighted average fair value of grants	$2.86	$3.87	$4.63
Weighted average assumptions:
Risk-free interest rate(1)	3.7%	4.2%	4.3 - 4.5%
Expected term(2)	7 years	7 years	3.3 - 7 years
Expected volatility for options(3)	47%	47%	46 - 47%
Expected dividend yield(4)	0%	0%	0%

_______________________

(1)The risk-free rate assumed in valuing the options is based on the U.S. Treasury Yield curve based on the expected term of the option at the time of the grant.

(2)The expected term of options granted represent the period of time that options granted are expected to be outstanding.

(3)Expected volatilities are based on implied volatilities from traded options on the Company’s shares, historical volatility of the Company’s shares and other factors.

(4)The expected dividend yield is estimated by dividing the expected annual dividend by the market price of the Company’s shares at the date of grant.

Restricted Share Units

RSUs generally vest ratably over one to three years based on continuous service. The Company satisfies vesting of RSUs with newly issued shares.

The following table presents the RSU activity during the year ended March 31, 2026:


	Restricted Share Units
	Old Lionsgate Class A Voting Shares				Old Lionsgate Class B Non-Voting Shares				Lionsgate
	Number of Shares		Weighted-Average Grant Date Fair Value		Number of Shares		Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
	(Amounts in millions, except for weighted-average exercise price and years)
Outstanding at March 31, 2025	0.1		$	8.39	11.1		$	8.17	—	$	—
Granted	—		$	—	0.1		$	7.29	—	$	—
RSUs vested	—	(1)	$	8.41	—	(1)	$	7.55	—	$	—
Forfeited or expired	—		$	—	—	(1)	$	7.97	—	$	—
Outstanding at May 6, 2025	0.1		$	8.39	11.2		$	8.16	—	$	—
Conversion	(0.1)		$	—	(11.2)		$	—	11.0	$	8.16
Granted	—		$	—	—		$	—	13.7	$	6.46
RSUs vested	—		$	—	—		$	—	(6.9)	$	8.06
Forfeited or expired	—		$	—	—		$	—	(1.9)	$	7.33
Outstanding at March 31, 2026	—		$	—	—		$	—	15.9	$	6.83

_______________________

(1)Represents less than 0.1 million shares.

The fair values of RSUs are determined based on the market value of the shares on the date of grant. The total fair value of RSUs on the date of vesting during the year ended March 31, 2026 was $31.9 million (2025 - $37.9 million, 2024 - $39.6 million).

The following table summarizes the total remaining unrecognized compensation cost at March 31, 2026 related to non-vested stock options and restricted share units and the weighted average remaining years over which the cost will be recognized:


	Total Unrecognized Compensation Cost		Weighted Average Remaining Years
	(Amounts in millions)
Stock Options	$	0.2	0.6
Restricted Share Units	44.6		1.1
Total unrecognized share-based compensation	$	44.8

Under the Company’s incentive plans, the Company withholds shares to satisfy minimum statutory federal, state and local tax withholding obligations arising from the vesting of RSUs. During the year ended March 31, 2026, 2.5 million shares (2025 - 3.3 million shares, 2024 - 3.0 million shares) were withheld upon the vesting of RSUs.

The Company becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of stock options and RSUs when vesting or exercise occurs, the restrictions are released and the shares are issued. RSUs are forfeited if the employees are terminated prior to vesting.

The Company recognized excess tax deficiencies of $4.9 million associated with its equity awards in its tax provision for the year ended March 31, 2026 (2025 - deficiencies of $2.4 million, 2024 - deficiencies of $7.4 million).

SEAC Sponsor Options

In connection with the Business Combination, the Sponsor Options to receive Legacy Lionsgate Studios common shares were issued to certain noncontrolling interest holders, with an exercise price of $0.0001 per share. The Sponsor Options would become exercisable (i) on or after the date on which the trading price of Legacy Lionsgate Studios common shares (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) equals or exceeds $16.05 per share or (ii) if a Change of Control (as defined in the sponsor option agreement) occurs, subject to certain conditions.

In connection with the Starz Separation, Legacy Lionsgate Studios amended the sponsor option agreement to include the Company as a party to the agreement and convert the Sponsor Options into options to purchase the Company’s common shares.

Other Share-Based Compensation

Pursuant to the terms of certain employment agreements, during the year ended March 31, 2026, the Company granted the equivalent of $2.3 million (2025 - $2.3 million, 2024 - $2.3 million) in shares to certain employees through the term of their employment contracts, which were recorded as compensation expense in the applicable period. Pursuant to this arrangement, for the year ended March 31, 2026, the Company issued 0.3 million shares (2025 - 0.2 million shares, 2024 - 0.3 million shares), net of shares withheld to satisfy minimum tax withholding obligations.