The studio bets its recovery on Michael Jackson and The Housemaid, as the broader film industry faces a reckoning about what audiences will actually pay to see.The studio bets its recovery on Michael Jackson and The Housemaid, as the broader film industry faces a reckoning about what audiences will actually pay to see.
When Lionsgate reported its fiscal first-quarter results this week, the numbers told a story the studio has spent years waiting to tell. Motion picture revenue more than doubled to $587 million from the prior year. Segment profit hit a record $105 million for a June quarter. The company’s total revenue surged 48 percent, outpacing Wall Street forecasts. But the specifics matter more than the aggregate: those gains were driven almost entirely by two films that represent opposite poles of Hollywood’s current strategic obsession.
One is a musical biopic about Michael Jackson that has reached $1 billion at the global box office—<cite index=”40-1″>the first biopic ever to surpass the $1 billion mark</cite>. The other is a horror-thriller adaptation of a bestselling novel that quietly became a sleeper hit with sustained ancillary performance through streaming, physical media, and international windows. Neither film required Lionsgate to gamble on wholly original intellectual property. Both worked because audiences knew what they were getting.
This convergence reflects a fundamental recalibration in how studios like Lionsgate are choosing to compete in an entertainment landscape that has not yet stabilized in the four years since COVID-19 devastated theatrical exhibition. The box office remains smaller and more concentrated than it was pre-pandemic. Attendance has never fully recovered. A 2026 forecast by Gower Street Analytics projected global box office at roughly $34.7 billion—still meaningfully below the three-year pre-lockdown average. In North America, that story repeats: domestic ticket sales remain depressed despite the calendar loading up with major releases.
Into this environment, sequels and franchises have become less a preference and more a necessity. Industry data shows that studios have sharply contracted the number of theatrical releases they greenlight each year. In 2024, 94 wide-release films landed in more than 2,000 locations—a 20 percent decline from the 120 that released in 2019. Those remaining films must work harder to justify their production budgets. The arithmetic pushed studios toward the familiar, the recognizable, the pre-tested.
“All of the pieces of our business are coming together,” Jon Feltheimer, Lionsgate’s CEO, told investors this week. “More than half of our film, television, and live entertainment slates are comprised of branded, repeatable properties.” The language is corporate boilerplate, but the strategic intent is transparent. Lionsgate is not betting on original stories. It is betting on properties that can generate what executives call “forward visibility”—the ability to know in advance that audiences will show up.
That visibility now extends to a sequel that has not yet started principal photography. Adam Fogelson, chair of Lionsgate’s Motion Picture Group, told analysts on Thursday’s earnings call that the studio is targeting a production start toward the end of 2026 or in early 2027 for Michael 2. According to Fogelson, the studio anticipates a release sometime at the end of 2027 or in the first half of 2028. Fogelson hedged by noting that these timelines remain subject to the demands of the development and pre-production process.
What is remarkable is that the sequel has already been greenlit in the public consciousness—even though the studio has not formally announced it in any traditional sense. The original Michael ends with the text “His Story Continues,” a signal so obvious that it reads almost like a wink at the audience. But that wink works only if audiences care enough to return. And in 2026, they did.
The original film, directed by Antoine Fuqua and starring Michael Jackson’s nephew Jaafar Jackson, arrived in April to immediate box office momentum. It earned $371.8 million domestically—Lionsgate’s third-highest-grossing film of all time. Internationally, it became a phenomenon. Across borders and languages, audiences responded to the film’s focus on Jackson’s artistry rather than the controversies and legal problems that surrounded his life. That choice—to present a reverent, sanitized portrait—would normally draw critical dismissal from tastemakers. The reviews were mixed. But box office is not a referendum on critical appraisal.
What the response to Michael revealed is something studios have spent years learning through trial and error: audiences will pay for experiences built around emotional familiarity and cultural resonance. The film succeeded partly because of its nostalgia rather than despite it. Audiences came to revisit a figure they thought they knew, a career they had grown up with, a period of popular music they had already decided mattered. The film’s decision to end before 1987 and the subsequent decades of Jackson’s life was not a limitation but a strategy—one that allowed the film to remain in the register of uncomplicated celebration.
The Housemaid works differently but toward similar psychological ends. The film, based on Freida McFadden’s bestselling psychological thriller, arrived in January as a modest counterprogramming play against heavier Oscar-season competition. It became a word-of-mouth phenomenon. By the time its theatrical run concluded, the film had earned approximately $400 million globally. Its success was not built on personal nostalgia but on genre familiarity and the pleasure of a tightly plotted thriller that delivers on audience expectations without pretense. It proved that there is an appetite for entertainment that does not require a $200 million production budget or a pre-established fan base, only a story people want to see and recommend to others.
Paul Feig is already directing a sequel, scheduled for December 2027. The studio is also developing a live stage adaptation.
But it is the Michael 2 announcement that reveals the true calculus. Fogelson mentioned something on the earnings call that deserves particular attention: Lionsgate already has 25 to 30 percent of the sequel filmed. This footage comes from production on the original picture—material that was shot but ultimately not used in the theatrical release. The most significant portion consists of large-scale musical sequences. The original Michael required expensive reshoots after the Jackson Estate requested the removal of an accuser from the script. Those reshoots cost approximately $50 million and were covered by the Estate. But in the course of that production work, Fuqua and Lionsgate captured additional material that was simply shelved.
This detail matters because it suggests that the economics of Michael 2 are substantially different from a typical sequel greenlight. A large portion of the film’s production value is already in the can. The studio can move forward with reduced capital risk compared to starting from zero, and that risk reduction may have been precisely what was needed to convince decision-makers to move forward with a second installment.
Fogelson also offered hints about the narrative structure. “We can go forwards and backwards in telling this story,” he said. “There are so many other events that happened, even in the timeframe of the original movie, that weren’t touched upon.” The first film ends in 1988, at the apex of Jackson’s commercial dominance. A sequel has decades of potential material to draw from—the Bad album era, the global stadium tours, the period when Jackson became less a musical figure and more a cultural apparatus unto himself.
Lionsgate is structuring Michael not as a single film but as a franchise—a property with multiple chapters, multiple revenue windows, and multiple opportunities to reach audiences with different portions of a life story. That approach represents a significant evolution from how studios have traditionally approached literary adaptations or historical subjects. It suggests the studio believes there is genuine audience appetite not just for a Michael Jackson film, but for an ongoing Michael Jackson film universe.
The risk calculation is clear. A $1 billion film creates extraordinary expectations. A sequel must not merely meet those expectations; it must exceed them or risk disappointing shareholders and the broader industry. Sequels to cultural phenomena often underperform their predecessors. But sequels to sequels of the same cultural phenomena tend to decline in box office return with each installment. That pattern, borne out repeatedly across franchise history, suggests Michael 2 faces headwinds that Michael did not.
Yet Lionsgate is working from data. The original Michael showed that audiences—particularly international audiences—are willing to revisit biographical material about cultural icons if the approach is reverential and focused on artistic legacy. The Housemaid showed that high-quality adaptation of popular literature retains theatrical appeal even in a landscape dominated by established franchises. Both findings point toward the same conclusion: themed entertainment, nostalgia-driven vehicles, and prestige-positioned stories about real people have a place in post-pandemic theatrical economics.
The broader film industry has been lurching toward this realization for years. Franchises dominate the slate not because studios love franchises but because franchises are what remain when you subtract all the original ideas that failed, all the mid-budget dramas that no longer find theatrical audiences, and all the genre experiments that now stream directly. What is left are properties with built-in recognition, properties with fandom ecosystems already in place, and properties that can justify their promotional spend by pointing to pre-existing audience interest.
For a company like Lionsgate, the question is not whether to make sequels but which sequels to make and whether they can be made profitably. Michael 2 is a bet that the answer is yes—that audiences will return to the Jackson narrative, that there is enough raw material remaining in his life to sustain another film, and that the studio’s television business can stabilize enough to allow the theatrical division to remain the primary profit engine.
On the earnings call, Feltheimer noted something that suggests the CEO is thinking several years ahead. “The positive backdrop is very constructive. The domestic box office is rebounding, and we’re seeing a return to pre-pandemic attendance in certain categories.” He added that Lionsgate’s library revenue—the income generated from older films, television content, and ancillary businesses—has remained consistently strong, topping $1 billion in trailing 12-month revenue for three consecutive quarters.
Library revenue is the hidden engine of a production studio’s economics. It does not depend on a constant stream of blockbusters. It depends on deep ownership of intellectual property and the ability to monetize that IP across multiple platforms and territories. Lionsgate’s library includes The Hunger Games, Saw, Divergent, and dozens of other franchises that generate steady income from streaming licensing, physical media sales, and international distribution.
That stability may allow Lionsgate to take intelligent risks on the theatrical side. Michael became not just a commercial success but a cultural event—the kind of film that generates conversation, merchandise, thematic engagement. If Michael 2 achieves 70 to 75 percent of the original’s global box office performance, it would still be a significant financial success for the studio. Fogelson’s comments suggest the studio is designing the sequel to maximize that possibility: start production at controlled cost using pre-existing footage, build the narrative in a direction that the original film’s ending already telegraphed, and release into a theatrical market that has learned to crave familiar-but-prestige entertainment.
Lionsgate is executing a deliberate strategy. It is not attempting to rebuild the theatrical market as it existed before the pandemic. It is adapting to the market as it actually exists: smaller, more concentrated, and increasingly dependent on properties that audiences recognize and trust. The studio is building a slate around films with demonstrated appeal, investing heavily in franchises that can generate multiple installments, and understanding that in 2026’s theatrical landscape, familiarity is not a barrier to attendance. It is an invitation.
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