I think I'll start.
Thank you very much, Mr. Schellenberger.
Monsieur le président, mesdames and messieurs, bonjour. Good morning.
My name is Jon Feltheimer. I'm the co-chairman and chief executive officer of Lionsgate Entertainment, Canada's leading independent filmed entertainment company.
I also want to introduce Phyllis Yaffe and Norman Bacal, who are members of our board of directors. Phyllis and Norm will be well-known to many of you by virtue of their longstanding roles in the Canadian film industry.
Let me begin by thanking members of the committee for extending this invitation for us to appear today and to discuss our concerns with the unsolicited takeover bid by the Icahn Group to purchase up to all of the shares of Lionsgate. As members will well know, the implications of the offer, were it to be allowed to proceed, go far beyond our company and will have significant ramifications for the Canadian film industry as a whole. As a result, Lionsgate believes that the offer, if successful, will not be of net benefit to Canada.
Members will have received some background information on Lionsgate, but I would like to take a moment to highlight what our company is about and our contribution, since our creation a little over a decade ago, to the film and television industry in Canada.
Let me start by stating the obvious. Lionsgate is Canadian. That's why we are here before you today. Lionsgate is a Canadian company incorporated in British Columbia. Two-thirds of our board of directors is made up of Canadians. Equally important, in our investments and our presence we are active and proud contributors to the film industry in Canada.
Senior management does work out of our California offices in order to be close to the epicentre of the film and television industry, but my colleagues and I, in New York, London, Toronto, Sydney, and Hong Kong offices, report to and answer to our board of directors.
Since its creation in 1997, Lionsgate has grown into a nearly $2 billion diversified global entertainment corporation. We have grown Lionsgate from a little independent studio, distributing primarily art house films, into a leader in motion picture production and distribution, television production and syndication, home entertainment, digital distribution, and new channel platforms.
One of the primary catalysts of this growth has been our ability to produce films and television projects with the participation of Canadian talent and crews, the benefit of federal and provincial funding, and the support of four of Canada's great cities--Vancouver, Montreal, Toronto, and Edmonton.
Our record of our contribution to the Canadian industry is clear, and indeed our growth has been inextricably linked to Canada...from the Lionsgate brand, a name reflecting its Vancouver roots, to the 48 films and television series we have produced here over the past 10 years, to our fast-growing Maple distribution company in Toronto, to our partnership with the Société générale de financement in Quebec, and our long-standing association with the Toronto International Film Festival, with which our shareholder meeting coincides each year and where we acquired our Academy Award-winning film Crash just a few years ago. We are also proud sponsors every year of the Banff TV Festival.
We are here today not only to remind you that Canada has been an important component of our success, but to make the point that we have also contributed to the success of the film and television industry in Canada. We have invested more than $800 million in movie and TV projects that were produced here in Canada, and we have created over 20,000 jobs, according to the standard CFTPA multiplier.
While we are here today due to the uncertainty created by the takeover attempt of Lionsgate currently under way, there is nothing uncertain about the message that we have brought the government officials and parliamentarians in recent weeks, or to you today. That message is that we value Lionsgate's Canadian heritage, we are proud of the role we have played in Canada's economy, we are proud to contribute to the cultural legacy of Canada and Quebec, and we are committed to the continued growth of our film and television businesses. This sustained growth, coupled with our recent expansion into channels, enables us to position ourselves to provide continued growth of our involvement in the Canadian film and television industry in the future.
In preparing for today's meeting, I took careful note of the debate that preceded the unanimous adoption by the committee of the motion that led to these hearings. Wisely, the committee was explicit that this hearing was not about blocking any kind of foreign investment in any circumstance. Canadians can and indeed should be proud of the fact that Canadian companies attract significant foreign investment. Rather, the issue before you and before the government is whether this specific proposal constitutes a net benefit to Canadian artists and Canadian industry. We believe that it simply cannot, based on what, if anything, Mr. Icahn has said in this regard.
Ladies and gentlemen, the Government of Canada is faced with a simple choice, a choice between Lionsgate as it stands today and Lionsgate as it would operate under the control of the Icahn Group. On the one hand, we are a Canadian company with a 10-year track record of very meaningful investment in Canada. We have spent close to a billion dollars in production in Canada, generated hundreds of hours of television and feature film product, and created tens of thousands of jobs in Canada.
On the other hand, our suitor has no track record of investment in the Canadian entertainment industry, no history of producing movies and television shows in Canada, and no legacy of creating jobs in the Canadian media industry; in fact, no relevant experience in the entertainment industry at all, here or anywhere else. In fact, in a recent interview with CNBC, Mr. Icahn himself suggested that Lionsgate should get out of the business of production altogether. That would mean no more $800 million spent on film and television productions filmed in Canada and no more creation of 20,000 jobs in Canada.
As Mr. Icahn has chosen not to share his plans with this committee or Canadians, or even accept the invitation to appear before this committee, we cannot see how he intends to exceed this benchmark, if at all, to satisfy the requirements of the law.
Furthermore, Mr. Icahn proposes to sell Lionsgate's Canadian film distribution arm as a feature of this offer. He is not doing this in the interest of enhancing the Canadian industry, or indeed Maple, as his representative suggested to you on Tuesday. He is simply doing it to avoid the provisions of the federal government's long-standing film policy, which prohibits foreign acquirers from buying Canadian film distribution companies. This fire sale of Maple will have a negative impact on the Canadian film industry as the divestiture will either mean that Maple will be sold to a competitor—therefore removing a potential outlet for Canadian productions—or, if sold to a company that is not engaged in film distribution, it will be a weaker player in the industry without Lionsgate's support and involvement.
We hope you will agree that the choice is clear. Allowing Lionsgate to fall under foreign control under these circumstances cannot be of net benefit to Canada and will have a significant impact on the industry as a whole.
Merci beaucoup. Thank you.
My colleagues and I are now delighted to take your questions.
