Gary Barber’s new agreement follows last month’s announcement that Roger Birnbaum — who had been co-CEO and co-chairman — will return to movie making. “We are thrilled he has chosen to stay at MGM on an exclusive basis,” Barber says. The CEO told investors on a conference call that the company is poised to see a dramatic rise in revenues in the current quarter with the success of its James Bond movie Skyfall, and the release next month of The Hobbit: An Unexpected Journey in partnership with Warner Bros’ New Line. MGM generated net income of $23.4M in Q3, +55.4% vs the period last year, on revenues of $169.3M, virtually unchanged. In response to a question, Barber declined to update investors about the company’s thinking regarding an IPO. “We will update all stockholders at the appropriate time,” he says. MGM announced in July that it “submitted a draft registration statement on a confidential basis” to the SEC for “a possible initial public offering of its Class A common stock.” JP Morgan and Goldman Sachs are managing the IPO plans.
If you think that The Girl With The Dragon Tattoo was a hit, then talk to MGM Holdings CEO Gary Barber. His company co-financed the film, and although it has generated about $231M at worldwide box offices he tells investors who own MGM’s unlisted shares that “it is below our expectations and we booked a modest loss.” The company wouldn’t say how much it wrote down, but Barber notes that execs ”were hoping we’d do 10% more than we did.” MGM has an option to co-finance the other two films in the trilogy and is talking to Sony about following through “assuming we can achieve better economics.” He was much more upbeat about the early performance of 21 Jump Street, which MGM also co-financed. “We expect it to be profitable,” Barber says. He adds that ”MGM has entered 2012 as a revitalized company.” He declined to describe MGM’s strategy but says it is “evaluating all options.”
LOS ANGELES, CA, September 20, 2011- MGM has appointed Dene B. Stratton to the post of Chief Financial Officer, it was announced today by Co-Chairmen and Chief Executive Officers Gary Barber and Roger Birnbaum.
Stratton, a nearly 20-year veteran of the Walt Disney Company, most recently served as CFO for internet start-up, TRC Media (Ireland) Limited. His MGM appointment is effective immediately and he will report to Barber and Birnbaum.
In what will be the first new production for the reconstituted MGM, the studio has set Vin Diesel to star in and produce The Machine. The action-comedy is being produced by Diesel’s One Race Films along with Thomas Lennon and Robert Ben Garant. They wrote the script. MGM will next set a director and start production in the fall.
Diesel will play a human-like machine created in secrecy by the Pentagon to be the world’s first ultimate weapon. Some 20 years after the machine was decommissioned and buried, The Machine is discovered, reactivated and befriended by a kid. When the government learns that The Machine is back in operation, the ultimate weapon’s mission becomes to protect the family that is harboring him. Lennon and Garant’s scripts include the Night at the Museum franchise and The Pacifier, the latter of which starred Diesel and was made by Spyglass. Since Spyglass’s Roger Birnbaum, Gary Barber and Jonathan Glickman are calling the shots at MGM, it is a re-team across the board. I’m told the tone of the movie is somewhat similar to Iron Giant, the animated film with a protagonist that was voiced by Diesel. The hope is to create a franchise.
Sony Pictures and MGM have finally announced the worst kept secret in Hollywood. They’ve reached an agreement that will return Sony Pictures to its role as distributor of the James Bond movies. Sony, along with studios like Warner Bros, Paramount and Fox, all engaged in talks with the reconstituted MGM on a deal that came at a hefty price. Deadline reported previously that MGM walked away with the right to be co-financier on several plum Sony films, including the David Fincher-directed The Girl With The Dragon Tattoo, as well as others to be added to the mix, including the remake of Total Recall. The latter film might be particularly painful for Sony because sources tell us that MGM gets to distribute Total Recall in the highly valuable international TV market. This is considered a huge benefit to MGM in that it enhances the value of its international TV portfolio and robs Sony’s existing international TV partners of a title that is expected to be big overseas. Neither Sony nor MGM would comment on the horse-trading part of the deal.
Clearly, Sony wanted the Bond franchise back badly, and now Amy Pascal and Michael Lynton have brought 007 back into the fold. Deadline reported last summer that MGM was being reconstituted as a pure production play and shedding its distribution operation. That immediately put the studio’s most valuable title, 007, in play. Bidders began mobilizing before MGM made it out of bankruptcy. By January, several of the studios vying for Bond rights became increasingly frustrated by the attempts by MGM’s new chiefs Gary Barber and Roger Birnbaum to leverage 007 distribution rights to get co-financing rights to plum projects at whatever studio won the deal. This came even after MGM had offered the villain role to Oscar-winner Javier Bardem, a courtship that is still going on (Anthony Hopkins has also been rumored as a potential participant on the evil side of the Bond dossier). Sony Pictures eventually got the upper hand and moved close to a deal in early February, after Sony threw co-fi rights to Dragon Tattoo and other titles into the pot. The announcement doesn’t deal with other MGM titles, but there are expected to be more that get distributed by Sony Pictures, which separately partnered with the studio on the Kevin James-starrer The Zookeeper. That film moved over to Sony when MGM went into deep freeze because of its crushing debt burden, and Sony moved it to the heart of the summer, with a July 8 release date. While Sony was winning that deal, rival suitors like Paramount (which has a strong relationship with Barber and Birnbaum over Star Trek) bristled at MGM’s asking price, plus a relatively low 8% distribution fee on the 007 film that Sam Mendes will direct and which Sony will release November 9, 2012, with Daniel Craig reprising. Here is the official announcement:
Sony About To Recapture James Bond #23; UPDATE: MGM Leverages 007 For Deal On Sony’s ‘The Girl With The Dragon Tattoo’
2ND UPDATE: The new MGM brass, Gary Barber and Roger Birnbaum managed to leverage the James Bond #23 film for a piece of Sony’s in-the-works big movie based on the Stieg Larsson bestseller, The Girl With The Dragon Tattoo, which has already been shooting in Sweden under director David Fincher and starring Rooney Mara. Deadline has learned that Sony Pictures bosses Amy Pascal and Michael Lynton agreed to give MGM a co-financing deal for the big title and possibly other films already shooting, too, to help the reconstituted studio generate quick cash flow. This allows MGM to have revenue which it hasn’t had in a long time, so the books look better, and more funds for production could be forthcoming. (That’s exactly how Birnbaum and Barber built their Spyglass Entertainment in the first place: by investing in films it didn’t make, like the recently rebooted Star Trek.)
UPDATE: We’re told Paramount dropped out of the Bond bidding when MGM insisted on bringing the distribution fee under 8% and when MGM got “grabby” in wanting a piece of a Paramount established franchise that studio didn’t want to give up.
EXCLUSIVE 5 PM: Deadline hears that Sony Pictures is close to landing distribution rights to MGM’s James Bond franchise again, and specifically for the next untitled Bond #23, even though several studios are still very much in the hunt. Sony Pictures chiefs Amy Pascal and Michael Lynton distributed both Daniel Craig 007 pics, Casino Royale and Quantum Of Solace, and now have moved into first position to recapture 007. That’s because Sony is agreeing to allow MGM’s new leadership to leverage the next Bond pic, and indeed the Bond franchise, to create more cash flow for the reconstituted studio post-bankruptcy. The new brass, Spyglass Entertainment co-owners Gary Barber and Roger Birnbaum who are now the Co-Chairmen andCEOs of Metro-Goldwyn-Mayer, are finishing negotiations to co-finance a number of films with Sony. Deadline has learned that Pascal and Lynton have already found a title on the Sony slate for MGM to co-finance. That’s exactly how Birnbaum and Barber built Spyglass in the first place: by investing in films it didn’t make, such as The Sixth Sense and the recently rebooted Star Trek.
There’s no doubt this is a shrewd move by MGM, but Deadline also learned it wasn’t sitting well with the majors. Top execs at Sony and Fox and Paramount and Warner Bros were increasingly frustrated with the way that the Spyglass duo were playing one studio off another — “and enjoying it,” in the words of one exec involved. Sony at the time even described its strategy to win Bond #23 as ”pleading”. Now it looks like that worked along with agreeing to much of MGM’s negotiating terms.
Even though MGM holds sway on where Bond #23 lands, a 007 return to the Sony fold would please EON partners Barbara Broccoli and Michael Wilson. Amy Pascal in particular has developed a strong personal and professional relationship with Broccoli when they were making the transition from Pierce Brosnan to Daniel Craig. Broccoli and Wilson found Craig among a list of possible 007s, and the choice wasn’t popular at first. But Pascal supported Craig. Also Sony has a reputation for spending big to market Bond: for Casino Royale, Sony spent a humongous sum worldwide to introduce the new Bond. MGM was supposed to distribute the 23rd Bond film itself, until the studio was pushed into bankruptcy.
2ND UPDATE: MGM has just issued this statement about the results of the creditor voting:
“Metro-Goldwyn-Mayer Inc. (‘MGM’) today announced that the secured lenders voting in the Company’s solicitation process have overwhelmingly approved its proposed plan of reorganization (‘Plan’). MGM will now move expeditiously to implement that Plan, which will dramatically reduce its debt load and put the Company in a strong position to execute its business strategy. MGM is appreciative of the lenders’ support.”
UPDATE: The creditors have now officially approved the restructuring plan that puts the Spyglass chiefs atop MGM and gets the studio moving again. A statement will be released momentarily. Now, the fun begins. If MGM isn’t a distributor, the next installment of James Bond will be a jump ball. Expect Sony (which distributed Casino Royale to battle it out with Warner Bros and Fox, but watch Paramount emerge in the thick of it because of the close relationship that the studio has developed with Spyglass since that company became co-financier of Star Trek and the followup that is in the works.
The long-running drama of MGM should play out by tomorrow when creditors decide whether or not to embrace a restructuring package that puts Spyglass partners Roger Birnbaum and Gary Barber in control or instead give the MGM assets to Carl Icahn and Lionsgate. Elsewhere, Miramax Films, the other endless custody …
Carl Icahn has made another offer to MGM lenders in hopes of thwarting the prepackaged bankruptcy plan and Spyglass deal. He’s now offered to buy $1.6 billion in debt at a premium price of 53 cents on the dollar; last week, …
In a letter sent to MGM on Monday, Lionsgate said its proposed merger with the studio would amount to $100 million in annual savings while boosting cash flow by $120 million over five years. Documents were also filed with the …