Lionsgate Expands Into Television Syndication Business, Acquires Debmar-Mercury

Debmar-Mercury to Continue Operation as Wholly-Owned Subsidiary

Leading Distributor Owns Distribution Rights to Comedy Central's SOUTH PARK

Franchise, Tyler Perry's Original Comedy Series HOUSE OF PAYNE and Other

Key Program Assets

SANTA MONICA, Calif. and VANCOUVER, British Columbia, July 12

Jul 12, 2006, 01:00 ET from Lionsgate

/PRNewswire-FirstCall/ -- Lionsgate (NYSE:   LGF), the leading independent
 filmed entertainment studio, announced today that it has acquired top
 television distributor Debmar-Mercury LLC. Helmed by principals Mort Marcus
 and Ira Bernstein, the company will continue to operate under the
 Debmar-Mercury banner as a wholly-owned subsidiary.
     Debmar-Mercury is one of the top independent distributors of television
 programming and feature film packages in the industry. The company owns
 distribution rights to Comedy Central's blockbuster animated sitcom SOUTH
 PARK, the Lionsgate one-hour drama thriller THE DEAD ZONE, the Sci-Fi
 Channel's FARSCAPE series, produced by Hallmark Entertainment and the Jim
 Henson Company, and numerous other shows as well as two major feature film
 packages from Revolution Studios and a feature film package from Lionsgate.
     Debmar-Mercury also recently completed a successful test of Tyler
 upcoming DADDY'S LITTLE GIRL) first-run, original comedy series HOUSE OF
 PAYNE with select major market stations representing a cross section of key
 station groups. Lionsgate's acquisition of Debmar-Mercury extends the
 company's relationship with Tyler Perry across not only feature film and
 video product but original television programming as well.
     The acquisition follows on the heels of Lionsgate's successful move
 into international feature film and library self-distribution through the
 October 2005 acquisition of UK-based distributor Redbus (subsequently
 renamed Lionsgate U.K.). It also creates a major new distribution portal
 for Lionsgate by giving the Company the capacity to syndicate its own
 television programming and feature film packages as well as creating a new
 television distribution revenue stream from third-party franchise
     "We again have the opportunity to combine our resources with a
 culturally similar, entrepreneurial company that is a leader in its market
 segment and whose principals we know well," said Lionsgate Chief Executive
 Officer Jon Feltheimer. "Debmar-Mercury has become one of the leading
 independent distributors in the industry. With our fiscal 2007 slate of
 nine prime time television series, the acquisition of Debmar-Mercury's
 television distribution capabilities across new and traditional media
 outlets is a natural growth opportunity for our content business."
     Feltheimer noted that the acquisition continues to further Lionsgate's
 game plan of broadening its distribution footprint and aggregating rights
 to important content and properties.
     "We are delighted to expand our current relationship with Lionsgate,
 since combining their television content and feature film properties with
 our distribution expertise is a perfect strategic fit," said Marcus.
 "Lionsgate's willingness to finance us and allow us to continue to operate
 in an entrepreneurial manner was an important and attractive component of
 this agreement for us."
     "This transaction provides us with a great platform to continue to grow
 our distribution business with the same entrepreneurial spirit that made us
 a success," said Bernstein.
     Debmar-Mercury is already preparing the syndication launch of
 Lionsgate's thriller THE DEAD ZONE, which has just debuted in its fifth
 season on USA Network. Bernstein and Marcus each have more than 20 years'
 experience in television distribution. Bernstein formed his own company,
 Mercury Entertainment, and previously headed domestic distribution
 operations for Rysher Entertainment (THE HIGHLANDER) as well as serving as
 an international distribution executive for Lionsgate. Marcus, who founded
 Debmar Studios, was previously head of Buena Vista Television, the domestic
 television distribution arm of The Walt Disney Company.
     Debmar-Mercury is a worldwide production and distribution media company
 specializing in network, cable, syndication, VOD/Pay-Per-View and Pay TV.
 The company was formed by the recent merger of Debmar Studios and Mercury
 Entertainment. In addition to its large catalogue of distribution rights,
 Debmar-Mercury also provides strategic assessments of market opportunities
 in the motion picture, home video, cable programming, VOD/Pay-Per-View and
 other television sectors.
     Lionsgate is the leading independent filmed entertainment studio. Fresh
 off the Best Picture Academy Award (R) -winning CRASH, its second
 consecutive year grossing more than $300 million at the domestic box office
 and the recent unveiling of an upcoming slate of nine prime time television
 series, Lionsgate is a premier producer and distributor of motion pictures,
 television programming, home entertainment, family entertainment and
 video-on-demand content. Its prestigious and prolific library of more than
 5,000 titles is a valuable source of recurring revenue and a foundation for
 the growth of the Company's core businesses. The Lionsgate brand is
 synonymous with original, daring, quality entertainment in markets around
 the globe.
     For further information, contact:
     Lionsgate:                              Debmar-Mercury:
     Peter D. Wilkes                         Jennifer McIntosh / Taffy Spencer
     310-255-3726                            mPRm Public Relations                   323-933-3399

SOURCE Lionsgate