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Well, the sale of MGM just got a lot more interesting. I already know that Warner Bros, Lionsgate, Spyglass Entertainment, and others have put in first-round bids for the movie studio during this prolonged sales process. But now there are two fresh offers that would keep MGM independent and functioning.
I’ve confirmed news reports saying News Corp this week sent a letter to MGM with a non-binding offer of cash and debt assistance to the studio teetering on the brink of bankruptcy because of the $3.7 billion it owes. This came after News Corp finally agreed on January 15th to sign a tweaked Non-Disclosure Agreement allowing it to view MGM’s financials. It’s well known that 20th Century Fox would love to get its hands on James Bond movies whose DVDs it already distributes as part of its home entertainment deal with MGM.
Meanwhile, a separate offer from the media investment firm Qualia Capital LLC consists of “$500 million to fund operations as part of a plan that also seeks to convert some debt to equity, according to a another person with knowledge of the situation,” Bloomberg is reporting. “In return, Qualia would receive an equity stake in MGM, said the person, who wasn’t authorized to speak publicly.”
Meanwhile the clock keeps ticking down MGM’s future: it’s deadline to pay interest on its debt was recently extended yet again to March 31 to give the movie studio time to restructure or find a buyer. This is turning into a real cliffhanger.
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On one hand I’d love to see MGM actually become a fully functioning studio in it’s own right producing films and generally giving people somewhere else to go to get their projects made.
But at this point everyone of the entities submitting a bid for MGM are nothing more vultures who are circling the corpse of this once great studio ready to pounce and devour what little remains of it’s assets.
Everyone of them is working an angle. I don’t believe for a second that FOX have MGM’s best interests at heart. It wouldn’t surprise me if they are helping MGM so they can swallow both it and Lionsgate in the next five years.
The proud Hollywood great MGM is gone. Everyone else is fighting like cat and dog for it’s bones. It’s time to accept it.
Fingers crossed!!! In a time when studios that are making billions are laying off employees and cutting back — Hollywood needs as many of studios as they can get! Here’s hoping MGM gets to remain operational and ROAR again! That would finally be some good news for 2010.
Go MGM!
Instead of always looking to break up the Lion, maybe there’s hope to keep the Lion vibrant. However, if it’s business as usual; bloated production budgets and absurd overhead spending on development that will never see the light of day, it won’t last long. Someone needs to completely reinvent the businesses and point of view for what a Studio looks like in the 21st Century. MGM is the perfect incubator for what that could look like, with its robust television revenue from a 1400+ title library and the return of its cornerstone franchise. But it will take both fiscal and creative discipline to do that and one has to wonder if there’s a management team out there that hasn’t been polluted by the fishbowl mentality of Hollywood. Not sure there is.
Until MGM starts releasing the # of movies it used to, I don’t really see why anyone would want to keep the studio afloat. The only option I see is to sell off the library and copyrights, because MGM barely released anything this past decade (at least, compared to its own history).
Will someone please let MGM die already? The death rattle has been going on since Paretti was in charge.
That said, I do hate to lose the jobs in the industry.
I would hate losing the jobs, and think the current team has much promise. In addition, the face lift on the logo was great and it would be a shame to silence Leo.
Well well. I would definitely like a deal that could keep MGM a functioning independent company, instead of just stripping it down to its bare assets for quick cash.
Sounds like 2 very good deals.
Deals that will keep MGM private and functioning would be the best!
The Qualia offer sounded very interesting.
And to “No one if Consequence”: You obviously don’t know Hollywood history to be saying something like that. Take a breath of fresh air and come back when you have something constructive to say.
No One of Consequence….your being very glib about people’s jobs aren’t you? I know many people who work there, work hard every day to over come problems not of their making, to help bring MGM back to where it once was. The current team in place had nothing to do with creating the debt, have yet to even released their first fully produced movie.
MGM is not only a part of Hollywood history, in many very significant respects IT IS Hollywood history. It’s demise is a lose for everyone who enjoys movies.
I think I am being anything but glib about the lost jobs. I think it is the most compelling reason for the studio to stay active, but MGM in its current situation just isn’t viable. The best hope to maintain any semblance of the work would be for the MGM library to become a part of a studio that has a functional plan and a realistic shot to make money. There should be no reason that several of the jobs couldn’t be “saved” by the increased titles/work at under another studio. The MGM moniker could certainly still exist in a similar way to New Line’s current incarnation within Warner Bros.
If you don’t think that MGM being reduced to the distribution arm for films like “College” and “Van Wilder 2″ is a sign of a legendary studio’s already present demise, perhaps I am not the one who need a Hollywood History lesson.
What do you know about MGM’s current situation? Probably very little. The library is history, a revenue generator when being fed by new product. With DVD sales slumping and WB owning a good portion, people are putting WAY too much on the library. It is perhaps the one thing that keeps MGM down, attempting to live on it’s past glory. Furthermore, MGM’s library is distributed through many channels, one of which is Fox Home Entertainment. You do consider Fox a studio with a “functional plan and a realistic shot to make money”, don’t you?
I agree, an increase of movie production is needed. Between March and January, MGM is releasing 4 new movies, all currently in post production. These movies were launched since Mary Parent started at MGM. It takes time to ramp up a production arm, no one can just come out of the gate releasing 10+ films a year.
Yes, under the plan of the FORMER management, MGM was first a distribution entity, “College”, “Van Wylder”, even “Fame” and “Valykrie” were NOT MGM produced films. That ended model ended with the new team in place. Again takes time to launch productions.
I don’t know if you need an education about Hollywood history, but your lack of knowledge and understanding about what is going on at MGM is clearly lacking!
I don’t see MGM remaining independent even with these offers. With Comcast taking over NBC Universal, I doubt they want the regulators to bring up their 20% ownership in MGM. I think the investment firms that own the remaining 60% just want to wash their hands of MGM. And I think Sony would rather have the MGM film library and James Bond franchise under their Sony Pictures than that of under a failing studio.
This deal just sorta reaks over the fact that since News Corp was outbid yet again for MGM, it is trying to keep it’s interests in the company (film distribution, hopes of getting the Bond franchise, etc).
Jesse,
Why would Sony want to re-purchase, with more debt, that which they once owned and sold? Yeah sure, they want the Bond Franchise, which they had distribution rights to already. As for the library, don’t think it is as valuable as everyone thinks, especially with WB owning everything MGM post 1985 and the slump in DVD sales.
As for Comcast’s ownership, don’t think it is an issue. The FTC is already looking into the merger of Comcast and NBC/Universal, apparently going to OK, with Comcast ALREADY owning a portion of MGM. So it is probably already factored in. Now they may be told to divest from MGM, but that type of thing happens often in these big corp mergers.
I want to see the new senior team have an opportunity to make some movies. Have you seen the restricted trailer for “Hot Tub Time Machine”, it’s hysterical.
There is more than enough room (and need) for MGM to continue on as a productive entity. If they survive they need to cut the dead weight (yep, even as lean as they are – they do have some) and focus on moderately budgeted films. At least that way they have a shot.