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MGM Sets Ex-Pixar CFO Ann Mather To Head New Board of Directors

Mike Fleming

Fresh from pre-packaged bankruptcy and restructuring, MGM has named former Pixar CFO Ann Mather to head the studio’s new board of directors, a group that also includes new studio heads Roger Birnbaum and Gary Barber. Hopefully, the next step will be to start making movies again, after gifting Sony Pictures Entertainment’s summer slate with The Zookeeper, Warner Bros with The Hobbit, Fox with The Three Stooges, and some lucky studio with James Bond and future productions because in all likelihood, the MGM lion will try to roar again initially as a production company which contracts out distribution and marketing. Here’s the announcement:

LOS ANGELES, CA, December 23, 2010 – MGM Holdings Inc. (MGM), the independent, privately-held motion picture, television, home video, and theatrical production and distribution company today announced former Pixar Chief Financial Officer Ann Mather will join the Board of Directors of the newly restructured company. Mather will serve as the Lead Director of the nine-member Board that includes Gary Barber and Roger Birnbaum, Chief Executive Officers of MGM and Co-Chairman of Metro-Goldwyn-Mayer Inc and its operating subsidiaries.
Mather’s appointment coincides with the company’s December 20th announcement that their restructuring plan has become effective, including exit financing of $500 million, arranged by JP Morgan. As the Lead Director, Mather will oversee governance of the studio and its operating units, working in tandem with directors Barber and Birnbaum; former CBS Chief Financial Officer Fred Reynolds; former MySpace President Jason

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MGM Restructure Complete: Spyglass’ Duo Roger Birnbaum And Gary Barber Take Reins With $500 Million To Spend

LOS ANGELES, CA, December 20, 2010 – Metro-Goldwyn-Mayer Inc. today announced that the company’s restructuring has become effective, with exit financing of $500 million in place. The company’s “pre-packaged” plan of reorganization (the “Plan”) was confirmed on December 2, 2010, by the U.S. Bankruptcy Court for the Southern District of New York. 

“MGM is emerging from one of the most challenging periods of its storied history. We are honored and inspired at the opportunity of leading one of Hollywood’s most iconic studios into its next generation of unforgettable filmmaking, global television production and distribution, and aggressively pursuing, developing and exploiting new digital entertainment platforms,” said Gary Barber and Roger Birnbaum, Co-Chairmen and Chief Executive Officers of MGM. “Beginning today, MGM is a stronger, more competitive company, with a solid financial foundation and a bright future. We look forward to working with MGM’s dedicated employees to build upon this company’s legacy.” 

MGM has a significantly improved financial position with secured lenders exchanging approximately $5 billion, including accrued interest and fees, for most of the equity in the company. As part of its exit financing, MGM raised $500 million to fund operations, including production of a new slate of films and television series. JPMorgan arranged MGM exit financing.

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Bah, Humbug! MGM Lays Off 50 Employees

Most of the bigwigs left weeks ago, but today MGM began laying off 50 staffers, mostly from the post-production, marketing, and theatrical distribution departments. Once Spyglass Entertainment’s Gary Barber and Roger Birnbaum start running the studio when it emerges from its prepackaged bankruptcy and closes a $500M credit facility to make movies again, MGM said in court papers that its employee roster will number about 320 in 2011.

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Next James Bond Skedded For Nov. 2012?

There’s still no official word. But I’m hearing from 007 insiders that production should start on the next James Bond movie — “Bond 23″ — towards the end of next year for release November 2012. Makes sense since MGM’s future is now sorting itself out what with the pre-packaged bankruptcy getting approval, and Spyglass taking over studio filmmaking, and star Daniel Craig finishing his film commitments. The actor began work on the Hollywood remake of the Swedish original The Girl With The Dragon Tattoo as soon as he completed shooting Cowboys and Aliens in a nifty bit of schedule coordination between two studios and James Bond rights holders Barbara Broccoli and Michael Wilson. Adding to the mix is that yet another James Bond videogame which had been held up because of the uncertainty recently got the go-ahead. Meanwhile, the latest 007 vidgame is for sale this Christmas.

It’s still not clear who will distribute the next bond. Deadline’s Mike Fleming reported last month that, 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 Paramount could emerge in the thick of it because of its close relationship with Spyglass over the film reboot of Star Trek and sequel.

The British newspapers also indicate Bond 23 may now be casting. Today’s Daily Mail reports that 007 producer Barbara Broccoli has been to see actor Russell Beale twice in his current West End play Deathtrap. Also, the Shakespearean actor is starring as King Lear for Bond 23 director Sam Mendes in a National Theatre production in 2012. And he’s exec producing Shakespeare’s History Plays for a new BBC TV season that Mendes is also overseeing. Beale told UK newspaper The Independent earlier this year that he’d already dropped a hint to Mendes that “Every actor wants to be in Bond. I’d love to be a baddie.” Read More »

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Fox Sets March 14 Start For ‘The Three Stooges’

Mike Fleming

EXCLUSIVE: The approval of the MGM pre-packaged bankruptcy has opened the door for the long-gestating comedy The Three Stooges to get made at 20th Century Fox. The studio has taken the project over from MGM and has scheduled a March 14 start date for the comedy. Bobby and Peter Farrelly will direct a script they wrote with Mike Cerrone. Conundrum partner Bradley Thomas will produce with Charles B. Wessler. The film will be exec produced by Earl Benjamin, the gatekeeper of the Stooges estate, and the stepson of Joe DeRita. DeRita was the sixth member of the troupe. He played the role originated by Jerome “Curly” Howard, who suffered a stroke and was succeeded by his brother Samuel (Shemp). After Shemp died suddenly, he was replaced by Joe Besser, who gave way to the vaudeville vet De Rita.

The project has no cast at this point. Jim Carrey and Sean Penn are out, and it is unclear whether Benicio Del Toro will play Moe. The deal brings the project back to Fox, where the Farrellys are based. The Three Stooges has been a passion project for Conundrum for over a decade, first at Columbia Pictures, then Warner Bros, and finally MGM. Things looked strong with Carrey, Penn and Del Toro until Penn took a sabbatical for personal reasons. He floated in and out, and then everything halted when MGM hit the financial rocks last year.

The Farrellys know that casting such iconic … Read More »

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Breaking: MGM Gets Bankruptcy Court Okay

Mike Fleming

LOS ANGELES, CA, December 2, 2010 – Metro-Goldwyn-Mayer Inc. (“MGM”) today announced that the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) has approved the company’s “pre-packaged” plan of reorganization (the “Plan”), clearing the way for MGM and its subsidiaries to emerge from Chapter 11 in short order. In confirming the Plan, Judge Stuart M. Bernstein found that it satisfied the various requirements of the U.S. Bankruptcy Code.

“Today’s ruling is an important milestone for MGM,” said Co-Chief Executive Officer Stephen Cooper. “Thanks to the support of our lenders and the hard work of our employees, we have moved through the restructuring process quickly. By dramatically reducing MGM’s debt load and providing MGM with access to new capital, the reorganization plan the Court confirmed today will enable MGM to emerge from this process with a solid financial foundation and will position MGM to be a successful studio going forward.”

MGM expects the Plan to become effective by mid-December, once the conditions of effectiveness have been met. Upon its emergence, the Company’s secured lenders will exchange approximately $5 billion, including accrued interest and fees, for most of the equity in MGM. MGM will be led by Gary Barber and Roger Birnbaum, who will serve as Co-Chairman and Chief Executive Officers of MGM Inc. MGM previously received approval, on November 12, 2010, from the Court on its motion to retain JPMorgan Chase to arrange $500 million in exit financing

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UPDATE: Carl Icahn Wants 2nd Hollywood VIP For His Lionsgate Board + MGM News

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.  Read More »

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Bankruptcy Court Likes MGM Plan

Mike Fleming

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 will be deemed accepted by MGM’s creditors.  Other motions approved were the commitment fee motion, the break-up fee motion, the Ernst &Young LLP retention application, the space reduction motion and final approval of the cash management motion.  Approval of these motions will help pave the way for MGM to confirm its plan, which received overwhelming approval by its secured lenders on October 29.

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MGM Starts Pre-Packaged Chapter 11; Claims Carl Icahn Now Supports Plan

LOS ANGELES, CA, November 3, 2010 – Metro-Goldwyn-Mayer Inc. (“MGM”) today announced that it and approximately 160 of its affiliates have filed Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) to seek confirmation of their “pre-packaged” plan of reorganization (“Plan”). MGM has sufficient cash on hand, and the consent of its lenders to use this cash, to fund normal business operations throughout the Chapter 11 process. MGM has filed “first-day” motions seeking immediate Court approval to continue paying its employees, vendors, participants, guilds and licensors in the ordinary course of business during the entire Chapter 11 process, for both pre-petition and post-petition obligations. MGM anticipates that the Plan will be confirmed by the Court in approximately 30 days.

As previously announced on October 29, 2010, MGM’s secured lenders, voting in the Company’s solicitation process, overwhelmingly approved the proposed plan of reorganization. After considering a range of strategic alternatives over the course of the last 15 months, MGM and its secured lenders determined this plan will allow the Company to emerge as a stable enterprise with new leadership at the helm to move MGM forward.

The Plan provides for the Company’s secured lenders to exchange more than $4 billion in outstanding debt for most of the equity in MGM upon its emergence from Chapter 11.

Following the receipt of the requisite consents from its lenders for the Plan, the Company and certain significant consenting

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