Hemisphere Media (HMTV) Acquires Leading U.S. Hispanic Subscription Video-on-Demand Service Pantaya

Hemisphere Media Group, Inc. (NASDAQ: HMTV) ("Hemisphere" or the "Company"), the only publicly traded pure-play U.S. media company targeting the high growth U.S. Hispanic and Latin American markets with leading broadcast and cable television and digital content platforms, today announced that it has acquired the remaining 75% stake of Pantaya, the leading U.S. Hispanic Subscription Video-on-Demand Service for approximately $124 million in cash from Lionsgate. Prior to the transaction, Hemisphere owned 25% of Pantaya, and as a result of the transaction, will own 100% of Pantaya.

Pantaya was launched in August, 2017 through a joint venture formed between Hemisphere and Lionsgate. Pantaya is the first premium streaming destination for U.S. Hispanics, featuring an unparalleled selection of blockbuster movies and exclusive series.

Pantaya has experienced outsized growth and is the clear leader in Spanish-language subscription video services. The service has grown rapidly and now has approximately 900,000 paying subscribers. The Company estimates that Pantaya's subscriber base will grow to 2.5-3.0 million by the end of 2025.

"In a very short period of time, Pantaya has become the destination for U.S. Hispanics seeking premium Spanish-language movies and series," said Hemisphere Chief Executive Officer Alan Sokol. "Pantaya offers access to blockbuster movies, original, exclusive series and other premium, world-class content unavailable anywhere else. Pantaya's success to date affirms the tremendous appetite of our audience for our unique content offering. Hemisphere plans to increase investment in content, expanding the output of series and movies, with the goal of accelerating subscriber growth and becoming a 'must have' entertainment option for the large and growing U.S. Hispanic audience."

Pantaya Chief Executive Officer Paul Presburger, added, "As a result of our focus on exclusive premium content, our knowledge of the Hispanic consumer, and the breadth of our offering, Pantaya is now the industry's leading video-on-demand streaming service for Spanish-speaking and bilingual consumers. Pantaya's accessible price point, user friendly interface and wide selection of the best Spanish-language content has led to significant growth. In the past year alone, Pantaya has increased its subscription base by 40 percent, and we believe we have significant runway for additional expansion ahead."

Pantaya, Lionsgate and STARZPLAY (the international premium subscription service of STARZ) will maintain a strategic content relationship that encompasses Spanish-language motion picture and television co-productions along with Pantaya's continued licensing of Spanish-language content from Lionsgate's 17,000-title film and television library.

"We're very proud to have helped build Pantaya into the leading premium Spanish-language platform in the U.S., and Hemisphere is the right owner to continue their growth and success," said Lionsgate COO Brian Goldsmith. "We look forward to an even more robust strategic content relationship among Lionsgate, STARZPLAY and Pantaya that benefits Pantaya's continued ascendancy."

Compelling Strategic Rationale & Growing Market Opportunity:The continued long-term growth of the U.S. Hispanic population creates a significant opportunity to reach a large addressable audience. Notably, in the past decade, 52% of all U.S. population growth has been from Hispanics. The U.S. Hispanic population is expected to grow from 60.5 million today to 75 million by 2030.

In addition, of the 39 million unacculturated/bicultural adults 18+ in the U.S., 34 million are already accessing at least one streaming service, 27 million seek out shows and movies about Hispanic characters and stories, and 17 million are willing to pay for access to movies and series.

83% of Hispanics already watch video content, movies or television online, providing Hemisphere a unique advantage to reach a large, growing and untapped addressable market.

Pantaya's content library includes critically acclaimed original titles from Pantaya's production arm, Pantelion, as well as titles from major producers and distributors, including Hemisphere, Lionsgate and Televisa. Pantaya offers a monthly paid subscription service starting at $5.99 per month and is accessible through its own website and app as well as distribution partners including Apple, Amazon, Google and Roku. To learn more about Pantaya, please visit www.pantaya.com

Attractive Long-term Financial Profile & Favorable Terms:The acquisition is being funded through cash on hand, as well as approximately $50 million add-on to the Company's Term Loan B on the same terms as the existing term loan. Separately, the Company has put in place a $30 million corporate revolving credit facility, which will be undrawn at the time of closing the acquisition. The new committed facility will be used for general corporate purposes.

Pantaya supports a strong margin profile of Hemisphere, as it brings a high flow-through on a per subscriber basis. Additionally, production costs are significantly lower versus English language streaming services.

Conference Call Information:Hemisphere will conduct a conference call to discuss the transaction at 11:00 AM ET on Thursday, April 1, 2021. A live broadcast of the conference call will be available online via the Company's Investor Relations website located at www.hemispheretv.com. Alternatively, interested parties can access the conference call by dialing (844) 502-0254, or from outside the United States at (236) 714-3063, at least five minutes prior to the start time. The conference ID for the call is 1091335.

A replay of the call will be available beginning at approximately 2:00 PM Eastern Time on Thursday, April 1, 2021 by dialing (800) 585-8367, or from outside the United States by dialing (416) 621-4642. The conference ID for the replay is 1091335.

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