In one of its first moves as it is emerging from bankruptcy, MGM is making a play in the digital world, teaming with digital station operator Weigel Broadcasting for the launch of Me-TV, a television network offering classic television sitcoms, …
WEDNESDAY UPDATE, 12:30 PM: Here’s another potential Lionsgate board member whom Carl Icahn is wrangling — filmmaker Jay Firestone, a one-time vice chairman of Alliance Communications in Canada. According to insiders, it makes sense for Icahn to want an executive from Up North since Lionsgate is based there and in Santa Monica. Also, the two men have movie history together: Fireworks Entertainment, which Firestone started when he left Alliance in 1995, was partnered in IDP Distribution along with Samuel Goldwyn Films and Icahn’s film company Stratosphere Entertainment. Sources tell me Fireworks burned through $100 million in financing from parent company CanWest Global Communications, which in 2003 didn’t renew founding president and CEO Firestone’s 5-year contract. Fireworks initially specialized in genre TV production, then expanded into feature film production and distribution when it was acquired by CanWest, opening offices in LA and London. But it had little success: 1999′s Onegin, 2000′s Rules Of Engagement, 2001′s Rat Race, and 2002′s Who Is Cletis Tout. Fireworks was shuttered by CanWest in April 2004. Firestone now runs Prodigy Pictures.
TUESDAY UPDATE, 1 PM: Carl Icahn right now is assembling his slate of board members hoping to unseat Lionsgate’s current board of directors at the film/TV studio’s scheduled December 14th shareholders meeting in Los Angeles. And I hear that Chris McGurk, the former MGM President and COO and Vice Chairman and Overture CEO, may join Icahn’s proposed slate because of his MGM experience now that Icahn and Lionsgate want that company, too. One of my Lionsgate insiders claims McGurk is lobbying for the board seat. But others tell me Icahn called McGurk out of the blue on Monday morning and offered it to him. Icahn won’t be packing the board with Hollywood types, however: instead, sources tell me he’s going after “people from other industries who are above approach from the SEC” since the crux of his problems with Lionsgate are the board’s alleged SEC violations. As for McGurk, he’ll have to see whether joining the Lionsgate board presents any conflicts of interest now that he’s figuring out his next movie. “He’s playing hard to get, if anything,” an insider tells me.
Usually, a proxy fight like the one Icahn has pledged to wage against Lionsgate is a very expensive proposition that takes months of preparation and involves contacting every shareholder. But this is being done with virtually no time and little expense. Just today, Icahn, who owns 33% of Lionsgate, extended his $7.50-per-share tender offer to December 2nd.
That’s the same day that MGM is supposed to receive confirmation of its pre-packaged bankruptcy plan. Icahn owns 15%-18% of MGM’s debt. There continue to be reports of an Indian company, and a Chinese company sniffing around, as well as Lionsgate, who may make another play for MGM. I’m told by a source that Lionsgate’s merger proposal is “gaining a lot of steam with many of the hedge funds in the credit. Not sure where the Big Four stand (Highland, Anchorage, Davidson Kempner, and Solis) but for many of the hedge funds, a merger with LGF gives them a liquidity option.” Meaning the MGM creditors will own a public stock that they can sell whenever they want to — a big plus. But ”$500 mil plus 55/45 won’t get it done. They will probably have to raise the offer to 60/40 and demonstrate that the merged entity is viable.”
As for McGurk, he most recently was CEO of Anchor Bay Entertainment. McGurk was with MGM from 1999 to 2005 and was responsible for all operating and planning activities for the Motion Picture Group, as well as all international operations, worldwide home entertainment, exhibition (UCI and Loew’s Cineplex), October Films and Polygram Filmed Entertainment. According to his official bio, McGurk “played the leading role in MGM’s reinvigoration, spearheading efforts that resulted MGM’s industry leadership in Home Entertainment library sales, marketing and distribution. Mr. McGurk maximized the asset value of Hollywood’s largest modern film library, transformed the Hollywood’s largest modern film library’s United Artist’s label into a specialty film unit and negotiated strategic alliances with Twentieth Century Fox and NBC.”
So let’s look at the last 6 months regarding Icahn and Lionsgate and MGM:
After the failed auction sale, MGM creditors explored every avenue. Lionsgate was talking to them about a merger since June, trying to get real financials as well as a governance plan. (Later press reports saying MGM creditors had rejected Lionsgate’s proposal were not accurate.) Icahn, in the midst of his Lionsgate battle, opposed the idea and publicly likened Lionsgate’s desire to merge with MGM to overstretched homebuyers. “It’s analogous to a couple not being able to pay their mortgage on a little house and starting to negotiate on a big, overpriced mansion that’s rumored to be haunted.” By June 21st, the MGM Steering Committee’s support of the Spyglass plan was leaked. The hedge fund guys with big MGM debt also like the fact that Spyglass’ Gary Barber and Roger Birnbaum have figured out how to operate successfully with its money from Cerebrus. (Others think it was a disaster) No matter: that money is due to run out which is why Spyglass wants to run MGM.
Metro-Goldwyn-Mayer Inc. (“MGM”) announced that the U.S. Bankruptcy Court for the Southern District of New York approved all of MGM’s motions that were heard today, including finding that modifications to its “pre-packaged” plan of reorganization are immaterial and accordingly authorizing the plan to be amended. Once amended, the plan
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.
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, …
BREAKING NEWS… UPDATE: She has signed a non-disclosure agreement and therefore can’t talk publicly to the media. But, making no secret that she was negotiating her exit from MGM after taking the job in April 2008, Mary Parent this afternoon is now officially out at the studio where she was Chairman of the Motion Picture Group and Co-CEO. It’s a sad ending to Parent’s struggle to revive the debt-ridden cash-strapped studio and get it producing and distributing movies again against huge odds. That she was able to accomplish anything at all, even a few releases and co-productions, is testament to her professionalism and personality. Hollywood needs to salute her.
Parent and her staff, meanwhile, has had to go into the Century City offices every day for months and basically do nothing. “A really good group of people came in here to sit on the bench in their prime. What wasted capabilities and wasted potential,” she has told pals. In private conversations with Hollywood, she called it “a perfect storm against us” of events that sank her management team. She’ll probably catch her breath before thinking about another job. (The offers are just coming in now.) In the end, she like everybody else puts all the responsibility for the studio’s demise on Harry Sloan and his inability to tell the truth. ”In a weird way, it’s like coming off a bad relationship,” she told a friend Friday. “I married the wrong guy and woke up pregnant.” (see below for more)
I saw yesterday’s breathless reports that Peter Jackson is close to a deal to direct The Hobbit – and I am bewildered how anyone slaps an “exclusive” tag on a story Deadline broke back on June 25th. That’s when Jackson …