Hollywood is hungry for more franchises. Could Lionsgate be the next takeover target?

It’s been a big year for Lionsgate.

Already, its film studio scored a $1-billion global hit with the musical biopic “Michael,” and the upcoming “Hunger Games: Sunrise on the Reaping” is poised for a potentially big breakout run during the Thanksgiving holiday.

Now, the Santa Monica-based studio is the subject of acquisition rumors — yet again.

Bloomberg recently reported that Legendary Entertainment submitted a takeover offer for Lionsgate, reviving talks that started last year after the studio split from the Starz Entertainment Corp. TV network and streaming service.

Spokespeople for both Lionsgate and Legendary declined to comment on the report.

Lionsgate has long been considered a potential acquisition target. As one of the few so-called mini-major studios left in the business, the studio has a valuable library of lucrative franchises, including “Twilight,” “The Hunger Games” and “John Wick.”

And as I’ve reported before, Hollywood’s search for reliable and popular intellectual property doesn’t seem to be ending any time soon, especially not with the new behemoth that is Skydance and its scores of franchises, including “Harry Potter,” “The Lord of the Rings,” “SpongeBob SquarePants” and the DC Studios stable of superheroes.

To better compete with Skydance, other studios or smaller production companies like Legendary might be looking to bulk up on assets.

“It’s an industry that is consolidating,” Doron Levit, professor of finance and business economics at the University of Washington’s Foster School of Business, told me. “There is a benefit to being large in terms of your bargaining power and leverage as you deal with other business partners.”

Lionsgate was already reportedly facing pressure from activist investor Anson Funds, which sent a letter to the company’s board in July, encouraging the studio to put itself up for sale if it wasn’t sufficiently prepared for the onset of AI, according to news outlet Semafor. And its separation from Starz has been viewed by analysts as a way to decouple its fortunes from the flagging TV business, while also positioning itself as an attractive target for a potential buyer.

For the three-month period that ended June 30, Lionsgate reported revenue of $776.6 million, up 48% compared with the prior year. The company had a net loss of $28.8 million in the quarter.

For Burbank-based Legendary, buying Lionsgate — the largest independent film and television studio — would give the company distribution capabilities it doesn’t have.

The “Dune” and “A Minecraft Movie” producer now has a three-year global distribution deal with the Skydance-owned Paramount; the first film to be distributed from that agreement was “Street Fighter,” which debuted earlier this month. Legendary’s highly anticipated “Dune: Part Three” will be distributed by Warner Bros., also owned by Skydance.

Just two years ago, Legendary bought out the remaining 50% stake owned by China’s Wanda Group. The studio self-financed the transaction with cash on its balance sheet and did not use outside funding, Legendary said at the time. The production company is now owned by company management and funds held by private equity firm Apollo Global Management.

At the time, Legendary CEO Josh Grode told me that the Wanda buyout would allow the company to “really explore strategic growth opportunities that may have been hampered a little bit by the international component of our shareholders.”

Perhaps the takeover reports are an outgrowth of that sentiment.

Netflix culture clash

The recent layoffs and executive departures at Netflix have exposed some deeper issues within the streamer — the tension between its tech roots and Hollywood ambitions.

My colleagues Wendy Lee, Meg James and I wrote a detailed account about what’s going on inside the company, as it struggles to expand its business, mount an offense against the rising competition of YouTube and placate investors who grew skittish about the future after Netflix withdrew its bid for Warner Bros. Discovery.

As the company navigates these changes, one question has emerged — is the dual CEO structure working?

Stuff We Wrote

Film shoots

Number of the week

The No. 1 movie at the domestic box office this past weekend was “Clayface,” the body horror film from Warner Bros. Pictures’ DC Studios. The movie made $24 million in the U.S. and Canada for a worldwide total of about $43 million.

Right behind “Clayface” was A24’s “You Can See Everything,” the buzzy documentary about Elizabeth Holmes that has all the millennials talking. In its second weekend in theaters, the nearly three-hour film brought in $19.5 million for a domestic total so far of $45.1 million.

Laika’s animated film “Wildwood” rounded out the top three with a domestic haul of $11.8 million. With a PG-13 rating, the stop-motion film is testing whether a more mature animated feature can find an audience.

What I’m watching

I’m still making my way through Netflix’s “East of Eden,” which is growing increasingly dark (perhaps not a surprise to people who read the book, unlike me). But the big highlight of my week was watching my UCLA Bruins continue their unbeaten run Saturday with a win over Michigan State at the Rose Bowl. I don’t want to jinx anything, but I’m feeling cautiously optimistic about the rest of this season.