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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. Read More »

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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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Icahn Makes Offer To Buy More MGM Debt To Expedite Merger

Calling the proposed Spyglass plan a “presciption for disaster,” Carl Icahn on Thursday offered to buy another $963 million of MGM’s debt. He already owns around $500 million of it, so the sum would make him one of MGM’s largest creditors – with a stake of around 37%. Pending the offer, he would then be in a good position to approve a merger between Lionsgate and the studio, one he now supports. Some of MGM’s creditors are pushing hard for that prepackaged bankruptcy plan that would instead see Spyglass’ Gary Barber and Roger Birnbaum come in and run the studio. As a condition of his offer, Icahn said anyone selling to him must vote against the Spyglass plan; a vote is scheduled for Oct. 29. Icahn also stated on Thursday: “This is the critical decision point for MGM lenders, yet we are being rushed into an extraordinary Prepackaged Plan with limited information and input, on a “hurry up basis” that frustrates any dissent. I hope to defeat this “rush to judgment.”

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Bloomberg: MGM Creditors To Vote On Pre-Packaged Bankruptcy Plan This Month

Nellie Andreeva

MGM creditors will be asked to approve a restructuring and pre-packaged bankruptcy plan for the studio within the next week or two, Bloomberg reports. This follows Spyglass chiefs Roger Birnbaum and Gary Barber’s signing non-binding letters of intent on Wednesday to become MGM co-chairmen/CEOs. So this next step of a pre-packaged bankruptcy proceeding has been expected for months. It would convert debt to equity and remove the $4 billion debt which has crippled the studio so that it can start generating films again. According to Bloomberg, Birnbaum and Barber would receive 5% of the merged company for their film library, valued at $100M.

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Spyglass Partners Inch Closer To MGM Reins; Battle Royals Looms For James Bond Distribution Rights

Mike Fleming

As expected, the MGM ownership situation is getting closer to being sorted, and it won’t be long before the Lion has a chance to roar again. Or at least emerge from its cage. Spyglass chiefs Roger Birnbaum and Gary Barber have signed non-binding letters of intent that will make them MGM co-chairmen/CEOs. That leads to the next step, which is a pre-packaged bankruptcy proceeding that would convert debt to equity, removing the $4 billion albatross from around the Lion’s neck so that it can start generating films again. The prepackaged bankruptcy allows the company to be restructured while it freezes existing deals for franchises that include the James Bond series and The Hobbit.

The LA Times reports that the Spyglass guys are already looking past this hurdle, and are talking with Ken Schapiro about coming aboard as COO. He’s a vet of Qualia Capital, which was among the entities that kicked the tires on MGM before management decided to go with Birnbaum and Barber, who are expected to make projects but will likely eliminate the studio’s marketing and distribution arms and set the projects up elsewhere. All this means that The Hobbit, with Peter Jackson at the helm, can move forward, with co-financing partner Warner Bros distributing the two films worldwide.

The situation on 007 will be more feverish. Warner Bros, Sony Pictures Entertainment and 20th Century Fox are the obvious outlets, … Read More »

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EXCLUSIVE: Summit Walks Away From MGM To Go Back Into Acquisitions Mode

“Summit is pulling out because the process has gone on way too long and it’s become a distraction for the business,” an insider tells me this morning. Summit toppers Rob Friedman and Patrick Wachsberger are still in acquisition mode, and the company will continuing looking for good deals in what is a very depressed showbiz marketplace where bargains are plentiful — especially film and TV libraries. The fundamental issue which MGM creditors had with Summit is that they would have had to give up too much equity in order involve the mini-major which remains flush with cash thanks to the Twilight franchise. “I’m not sure that Summit bowing out changes the Spyglass situation,” my insider added. For months now, Hollywood has known that Spyglass is the bigger creditors’ frontrunner to control MGM, which seems finally poised to plunge itself into a prepackaged bankruptcy, and then emerge with Spyglass partners Roger Birnbaum and Gary Barber starting production for the studio. But Summit has remained very much under consideration and hadn’t heard they’re out of it — at least not yet. So Summit decided to pull the plug on its own.

This lead group of MGM creditors (Anchorage Advisors, Highland Capital Management, and Davidson Kempner Capital Management who have banded together) would have Spyglass plan transform MGM into a pure production company and close down its marketing and distribution divisions. Coupled with the equity that Spyglass would bring to the table, a streamlined MGM would lower its debt and have a shot at … Read More »

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Screen Gems Makes ‘Vow’ With Spyglass

By | Wednesday July 21, 2010 @ 9:28am PDT
Mike Fleming

rachel mcadamschanning_tatumEXCLUSIVE: Screen Gems will co-finance with Spyglass and distribute The Vow, the Michael Sucsy-directed film that will star Rachel McAdams and Channing Tatum. The film is based on a true story of a newly married couple whose car is rear-ended by a truck. She loses all recent memory-including that she’s married–and they struggle together to gain it back. Spyglass put together the project, and  Sucsy, who directed HBO’s Grey Gardens, is rewriting. This puts Clint Culpepper’s Screen Gems back in the Channing Tatum biz, after the Sony-based shingle distributed another romantic weeper, Dear John. Spyglass’ Roger Birnbaum, Gary Barber and Jonathan Glickman are producing. Shooting starts September in Toronto.

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MGM To Morph Into A Pure Production Play?

Mike Fleming

Can ‘The Hobbit’ Wait For MGM Decisions?

MgmlogosmallEXCLUSIVE: Now that Spyglass has emerged as the favorite to steer MGM’s future fortunes — although Summit insists it’s not out of the running yet and Lionsgate is in merger talks — more details are emerging about MGM’s possible future. Insiders tell me that the Spyglass plan would transform MGM into a pure production company and close down its marketing and distribution divisions. That would certainly cut costs in the short run. Coupled with the equity that Spyglass would bring to the table, a streamlined MGM would lower its debt and have a shot at raising new funding to finance its own pictures. That would let Spyglass partners Gary Barber and Roger Birnbaum do what they do well, which is to lower risk by making domestic and offshore distribution deals.

SpyglassBut I see the downside of this plan. MGM would have to pay others to distribute and market its films — and those fees could be comparable or higher than the monies saved on overhead. I’m told that rival Summit and Lionsgate proposals would maintain MGM as a studio because both companies have distribution divisions. The Spyglass move would mean yet another morphing of MGM over the recent past. Under Harry Sloan, the revived studio started off as a distribution rental system for films by financiers like Sidney Kimmel and The Weinstein Co, a strategy that didn’t work. Read More »

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WHY NOW? Baffling Resurgence Of Rumor About MGM-Lionsgate Merger Talks

lionsgate_logoI’m being told there’s really nothing new with these explanatary conversations. And, anyway, Lionsgate can’t do any kind of deal with MGM unless the studio management brokers some settlement with 32% shareholder Carl Icahn, who has made it clear he won’t approve any big buys by the studio right now. Strange that this is coming on the heels of reports that Spyglass is in the lead to run MGM. (Spyglass Beating Summit To Run MGM?)

Lionsgate management attempted a lowball bid of $1.3B-$1.4B during the MGM auction and then dropped out in March. MgmlogosmallThat’s the last time Lionsgate defied Icahn’s warning not to do any major deals. Among other customary conditions, Icahn’s offer has tightened the reins on Lionsgate not to “enter into any material transaction outside of the ordinary course of business (including any acquisition of assets over $100 million, and any issuance of securities other than upon the exercise of currently outstanding options)”. Though buying MGM would make Lionsgate a bigger player in Hollywood, such an acquisition would add tremendous debt to the studio. And if they gave stock to a seller, then it would dilute Icahn’s stake. Carl wouldn’t be happy about that.

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Spyglass Beating Summit To Run MGM?

MgmlogosmallFor weeks now, we have been hearing from our various sources at studios, agencies and production companies that Spyglass Entertainment is in the lead to run a restructured MGM despite Summit Entertainment also being very much in the mix. But it’s been near-impossible to get any confirmations, so we’ve held back writing. Though we almost posted last week when we received a batch of new and detailed information.

Well, tonight, the Wall Street Journal published that and everything else we’d heard, also with no confirmations. The WSJ emphasizes that talks are continuing and no final decisions have been made. So the paper’s info is exactly where our info is: not pinned down.

SpyglassHere is where things stand: Spyglass co-heads Gary Barber and Roger Birnbaum would run the studio as co-chief executives under the current restructuring plan being discussed with a group of large MGM’s creditors. But Summit toppers also are still very much under consideration and haven’t heard they’re out of it — at least not yet. I can report that this lead group of MGM creditors consists of Anchorage Advisors, Highland Capital Management, and Davidson Kempner Capital Management who have banded together. Led by Anchorage, they bought up MGM debt on the cheap so that they now represent what I’m told is about $400 million of it. (The WSJ says it’s about 1/3 of the outstanding debt which was purchased for $.60 on … Read More »

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