Marvel Enters Burgeoning Made-for-DVD Market Segment

New York & Santa MonicaI, Calif. & Vancouver, British Columbia, United States, Wednesday, May 26, 2004 -- (Business Wire India) Marvel Enterprises, Inc. (NYSE:MVL), a global entertainment licensing company, and Lions Gate Entertainment (AMEX:LGF) (TSX:LGF), the premier independent filmed entertainment studio, announced Tuesday that they have entered into an agreement to develop, produce and distribute original animated DVD features based on certain characters within the Marvel Universe. Under the terms of the arrangement, Marvel and Lions Gate plan to commence production immediately on eight original animated projects in either 2-D or 3-D format with the first title expected to be released by Lions Gate in late 2005. The announcement was made by Lions Gate Chief Executive Officer Jon Feltheimer and Avi Arad, Chairman and CEO Marvel Studios.

"More than $2 billion in DVDs based on Marvel characters have been sold and Marvel's animated television projects have been very successful, so this is a natural evolution for the company," said Arad. "Lions Gate has been a great partner for us and this new venture will further solidify the Marvel name as one of the preeminent brands in entertainment."

Feltheimer added, "This deal reflects the next chapter in our ongoing relationship with Marvel. The Marvel Universe maintains an outstanding and loyal fan base that craves fresh material featuring Marvel's Super Heroes. We're confident that we can take Marvel's extensive library of popular characters with compelling storylines and create action-packed, appealing animated made-for-DVD movies."

Under terms of the agreement, Lions Gate will provide Marvel with licensing fees for character rights and fund all of the development, production, distribution and marketing for each title. Marvel will spearhead creative development and production. After each animated project's home video window expires, the companies may exploit the movies in other entertainment media domestically and internationally including television and Video On Demand (VOD). Both companies will share in the profits from the venture.

Marvel will choose from a roster of leading production partners, including Lions Gate's own animation production partner, CineGroupe. Each animated picture will have a minimum running time of 66 minutes and specific titles and characters chosen for animation will be announced at a later date.

The two companies noted that the agreement builds on the current theatrical relationship between Lions Gate and Marvel. As announced in February 2004, Lions Gate has been granted licenses to develop, produce and distribute theatrical film releases based upon two popular Marvel(TM) properties -- Iron Fist(TM) and Black Widow(TM) -- and Lions Gate and Marvel already plan to make a sequel to their April 2004 release "The Punisher."

Marvel Enterprises, Inc. is a leading global entertainment licensing company with the world's largest character library of more than 4,700 properties, which have entertained generations for over 60 years. Principally focused on licensing Marvel has talented creative teams in its Consumer Products (licensing), Marvel Studios, Marvel Comics and Toy Biz divisions. These divisions support the development of a broad range of entertainment (film/television/dvd), consumer products, toys, comics/trade paperbacks and promotions based on the Marvel characters. Visit www.marvel.com for more information.

Lions Gate Entertainment is the premier diversified independent 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 8,000 titles is one of the largest in the entertainment industry. The Lions Gate brand name is synonymous with original, daring, quality entertainment in markets around the globe. For further information on Lions Gate, visit www.lionsgatefilms.com.

Except for any historical information that they contain, the statements in this news release regarding Marvel's plans are forward-looking statements that are subject to certain risks and uncertainties, including a decrease in the level of media exposure or popularity of Marvel's characters, financial difficulties of Marvel's licensees, changing consumer preferences, movie- and television-production delays and cancellations, toy-production delays or shortfalls, continued concentration of toy retailers, toy inventory risk, the imposition of quotas or tariffs on products manufactured in China and a decrease in cash flow even as Marvel remains indebted to its noteholders. These and other risks and uncertainties are described in Marvel's filings with the Securities and Exchange Commission, including Marvel's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Marvel assumes no obligation to publicly update or revise any forward-looking statements.

CONTACT: Marvel Enterprises Matt Finick, 212-576-4035 email: mfinick@marvel.com or Lions Gate Entertainment Peter Wilkes, 310-255-3726 email: pwilkes@lgecorp.com or Bender/Helper Impact Adam Fenton, 212-689-6360 email: adam_fenton@bhimpact.com or Brian Reinert, 212-689-6360 email: brian_reinert@bhimpact.com or Jaffoni & Collins Richard Land, David Collins 212-835-8500 email: mvl@jcir.com