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Carl Icahn is now offering 50 cents on the dollar for MGM debt in an attempt to bolster his position before
creditors vote Friday on a reorganization plan that puts Spyglass partners Roger Birnbaum and Gary Barber in the driver’s seat of the debt-hobbled studio. Icahn had previously been offering 45 cents on the dollar for debt, and the new offer comes with the stipulation that debt holders vote against the Spyglass offer. Lionsgate brass recently came out with an impassioned speech on why a Lionsgate-Icahn deal was better for creditors than the Spyglass plan which is half a year in the making. Considering how bitter the battle has been between Icahn and Lionsgate brass as he’s tried to take over the minimajor, doesn’t it sound like that couple you know, the one that is fighting constantly and decides that if they just went ahead and had a baby, everything would be perfect? MGM, which watched Mary Parent exit as its pic chief after she was stymied in her efforts to create a production slate for the Lion, needs a steady hand and many feel that the Spyglass guys would provide it. The prepackaged bankruptcy with Birnbaum and Barber has never been viewed as a permanent solution. It has always been viewed by insiders as “kicking the can down the road.” Bolder plays with an outside suitor like Lionsgate is necessary later on, but it doesn’t necessarily have to happen by Friday.
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The deal doesn’t have to happen by Friday. But neither does the Spyglasd deal. If MGM creditors wanted three weeks to consider the deal, that means they see the value in it. So vote against this deal & ley LG make another presentation. Give Spyglass a 2M deposit & tell them to wait. If they still want to go with Spyglass after they consider the deal, then they can work out how to get it back or towards a future percentage.
Icahn & LG have the wherewithal to do this deal. They are set up already. Channeling films & tv shows will bring in ad revenue & stock their film library & increase their value & it can happen immediately. Icahn will not replace the LG team bc who would take over for them in such an environment.
LG is hungry. They have the talent & the passion & they want to
grow. I’m sure they’ve learned from companies like Orion & Carolco & the Weinsteins as to what can happen when you overreach. This deal feels like a puzzle to me and the pieces fit.
The MGM creditors aren’t movie people & they’re comfortable with Spyglass bc they think no drama and short term return. But this isn’t a short term game & they’re not set up yet.
Give LG a chance. They’re ready.
Roger and Gary, Back Off!
Well said, Jim. The Spyglass deal is like throwing the baby out with the bathwater. By taking on the MGM name, it’s tentpoles and nothing else — really, do you really think that Barber and Birnbaum have any idea of what it takes to monetize the MGM library (because the debtholders sure don’t)? — Spyglass is going to completely squander the chances they’ve been given. They’re going to have to pay through the nose to distribute MGM product and it’s anyone’s guess if MGM’s video deal with Fox will stay in play. They have a freakin’ movie STUDIO for crying out loud and are going to neuter into just another crappy production company. The Lionsgate deal might be fraught with peril, but it’s a bold move where both companies complement one another. The Spyglass deal feels completely half-assed– but hey, that’s been the debtholders’ M.O. for the past year-and-a-half.
Does a Lionsgate deal affect the HOBBIT moving forward?
anyone?
ANYONE???
What has Spyglass made that was successful?
Not what they have retroactively financed (JJ’s STAR TREK — they came in when Paramount needed p+a money) and not what they were given to finance by a studio (THE SIXTH SENSE: given to them by pal Joe Roth) But what have they internally developed and made that was truly successful?
curious
At least they’ve made movies. Yeah they’ve had a fair number of clunkers (Evan Almighty), but they did have some successes, even if they didn’t have much to do with them.
Carl Icahn isn’t a business genius; he’s Gordon Gekko without the charisma. He flies under the premise of being a shareholder activist, but forces through tons of shortsighted moves on management, forcing the stock price up in the short term and then cuts and runs before the shit hits the fan, leaving the managers, shareholders and employees holding the bag with him escaping with their millions (see TWA, Texaco and any other company he’s touched).
It’s really a shame the financial crisis didn’t wipe these guys out too. Be nice if we started “making” things again as opposed to just buying, selling and destroying the hard work of others.
All or most of their films were co-productions, but so what? They’re not an in-house production company.
And quite a few successful (financially and critically) films have been co-produced by Spyglass: Bruce Almighty, Sixth Sense, Star Trek, The Insider, Wanted, Invictus, etc.
The important thing is what is important for MGM. MGM needs smart businessmen like Barber and Birnbaum to run it.
MGM doesn’t need to be caught in the middle of Ichan’s hostile takeover of Lionsgate.
Actually, there’s quite a few films Spyglass developed/produced that were modestly budgeted and worked well internationally (Rush Hours, 27 Dresses, 4 christmases, eight below, the pacifieramong others)Yes, some don’t work, but their cost effective approach clearly has kept them in business longer than most of their competitors, who spend themselves into oblivion. I hope they get a shot.
This has nothing to do with Spyglass vs LG. Icahn wants to combine both companies, slash overhead, produce nothing and flip it to the highest bidder (probably Warners). The letters “MGM” go the way of “TWA”.
successful or not, we do not need more consolidation in the industry. Although they won’t be a production house to begin with, they will certainly become one. Losing the Lion to LG is just another studio off the market to producers in the future.
MGM has been dismantled by a succession of owners who kept one eye on their exit strategy rather than both eyes on building and maintaining a company for the long haul. The Spyglass deal continues that tradition, this time for institutional debtholders. Will Icahn really be any different? Or will MGM be in the same place a few years from now — back again on the block? We know one thing: a Lionsgate acquisition means one less buyer forever; at least with the Spyglass plan, there’s hope that within a few years a deep-pocketed company from a different sector or country will find strategic reasons to have a full-fledged content creation and distribution system with a valued brand. If not, MGM disappears then. But isn’t it better for the town to see if it might play out the other way rather than watch the studio disappear into Lionsgate and the schemes of a corporate raider?
You are living inside of the Hollywood bubble, my friend. Other than Disney, there are no “valued brands” for content companies. Do you think 99% of movie consumers care whether a movie was made (or distributed) by Lionsgate, Universal, Sony, or GK Films?
The implication of my point is that no outside angel is going to swoop in to buy MGM for its “valued brand.” Library, maybe sometime deep in the future when there is a way to remonetize. Right now, there aren’t that many ways to wring cash out of an old library without dumping in new cash.
Carl Icahn will do for MGM like his “brother” Kirk did to the studio before. Which is to say, he will bend MGM over the table and have his way with her. The parts are more valuable than the whole. So, if you want more of Hollywood to cease to exist and its parts to be shipped out then, yes, I would say go with Carl. He represents the new economy.