MGM news (not good)
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MGM Studios face forced bankruptcy
http://www.nme.com/movies/news/mgm-studios-face-forced-bankruptcy/182867
http://www.nme.com/movies/news/mgm-studios-face-forced-bankruptcy/182867
Comments
Michael Wilson and Barbara Broccoli have made it pretty clear to me that they'll never do another Bond movie with MGM. One way or another, MGM's hold on its franchises has to end if Bond is to move forward. If bankruptcy is forced, then MGM's assets will be sold to other studios and a major obstacle to Bond going back into production will have been crossed.
MGM is going to be reluctant to sell off one of it's most lucrative franchises. I think they are going hold out until they find a buyer.
That is exactly what they've been trying to do and their asking price has been and continues to be unrealistic (they turned down a $1.5 billion offer from Warner Bros.) That is why the best course of action would be for the creditors to deny a further extension and demand payment or liquidation of the MGM assets. Control of the franchises would then be taken out of MGM's hands, sold to someone else and this stalemate that has existed for so long will finally end one way or another.
I agree...if anything, the creditors have learned that these extensions are not getting them any closer to getting their money. I think Sep 15 is when we will see the end of MGM. How long it takes for Bond to escape the rubble of the studio's collapse is another matter, though.
http://online.wsj.com/article/SB10001424052748704164904575421560480184200.html?mod=googlenews_wsj
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/08/spyglass-close-to-a-deal-to-takeover-management-of-mgm.html
(somebody change the thread title
Well we don't know what is a realistic offer is. 1.5 billion may sound like a lot to us but not to a big company like MGM. However, I do agree that they are going to have to give-in sometime.
This is the line that makes me curious...
"It is unclear how much money Spyglass would need to make new movies at MGM and where the money would come from. "
I'm no financial whiz but if I read the article correctly, MGM will still have to go into bankruptcy regardless of whether a deal is hammered out with Spyglass or not. Once in bankruptcy it will then be up to its creditors to decide if the Spyglass offer is acceptable or not. Either way, in a best case scenario things will continue to by murky until mid-September at the earliest, longer if the Spyglass deal falls thru or the creditors decide it is not acceptable to them.
Full text of article:
Spyglass Entertainment is nearing a deal to run Metro-Goldwyn-Mayer Inc. once the beleaguered film studio finishes restructuring a roughly $4 billion debt load later this summer, said people familiar with the matter.
MGM's creditors have hammered out financial details with Spyglass co-heads Gary Barber and Roger Birnbaum and the two sides have been negotiating the makeup of MGM's new board, they said.
Messrs. Barber and Birnbaum would run MGM as co-CEOS when the studio exits a streamlined bankruptcy later this year under the plan. A group of hedge funds that now control MGM's fate have identified the pair as their best choice for reversing the ailing studio's fortunes.
Under the plan, Spyglass—which co-financed recent releases including "Dinner for Schmucks" and "Invictus"— would merge older parts of its film library with the MGM library. The Spyglass founders would receive a 4% ownership stake in the reorganized MGM and creditors would forgive all of MGM's debt for the bulk of the restructured studio's new equity.
A deal could be done as soon as this week, the people said. MGM plans to peg the value of the reorganized company at $1.9 billion.
Once in bankruptcy, MGM could entertain other deals under an obligation to maximize its value for all creditors. MGM's creditors have left open pairing with other studio rivals, including Summit Entertainment and Lions Gate Entertainment Corp. Both have made recent overtures, the people said.
MGM, Summit and Lions Gate declined to comment. Spyglass couldn't be reached for comment.
A merger with Summit, the studio behind the profitable "Twilight" franchise, has appeal because the company is flush with cash and MGM needs funds for new movies. MGM's coming "Hobbit" films, prequels to the "Lord of the Rings" trilogy, are budgeted at more than $500 million combined.
Hedge-fund creditors also see promise in a deal with Lions Gate but are wary of potential complications from the studio's activist investor, Carl Icahn.
MGM's creditors would have to relinquish anywhere from a quarter to half of the new studio's equity in deals with Summit or Lions Gate. The hedge funds invested heavily in MGM's debt have resisted getting too diluted in any deal. Creditors holding two-thirds of MGM's debt must sign off on a deal for a bankruptcy judge to approve it. MGM hopes to limit its stay in bankruptcy court to about two months.Once exiting bankruptcy, MGM would try to raise a new credit line of about $400 million to $500 million to finance new movies.
Spyglass executives are negotiating a "break-up" fee should the creditors choose another partner, suggesting a deal is imminent.
MGM hopes to file the "prepackaged" bankruptcy sometime in mid-September, when its latest waiver on debt payments expires, the people said. J.P. Morgan Chase & Co., a major MGM creditor, is working on providing between $150 million and $200 million in debtor-in-possession financing to steer the studio through bankruptcy, one of these people said.
A Spyglass deal would end a year-long drama over MGM, well known for its roaring lion logo. The studio put itself up for sale last year but failed to garner bids high enough to placate creditors. Time Warner Inc. bid only about $1.5 billion.
Any deal wouldn't likely include MGM's top film executive, Mary Parent, a Hollywood veteran brought aboard in April 2008 to jumpstart the studio's production. She developed 20 high-profile film projects, including a remake of "Robocop" and a planned "Three Stooges" movie, but only four got made.
MGM's film library, which boasts the James Bond franchise, suffered big cash-flow declines amid the dearth in new films. Ms. Parent and other studio executives pushed a plan in which creditors would raise about $1 billion to bankroll new movies, an idea they dismissed.
A committee of MGM's most influential creditors met with Spyglass executives in New York in mid-July to hammer out deal terms, the people said. Talks intensified in recent days.
MGM's new board would have nine members, including Messrs. Barber and Birnbaum, one of the people said. The rest would include a mix of independents and hedge-fund representatives.
Messrs. Barber and Birnbaum of Spyglass would get a slice of MGM's new equity for combining a slate of older films such as "The Sixth Sense" and "Seabiscuit" with MGM's library. The parties agreed to value Spyglass's older films at about $80 million, the people said. Private-equity firm Cerberus Capital Management has a significant stake in Spyglass.
Over time, the Spyglass executives would be able to increase their MGM stake if the studio's performance improves or if the company is sold, the people said.
I don't think it has anything to do with studio "politics". EON is probably just sick and tired of having a partner who they make tons of money for but still manages to go broke every few years and muck up their plans to make tons more money with another Bond film.
I'm not exactly sure what their primary issues are, but I suspect that they perceive MGM's current weakness as an opportunity to wrest some control from MGM for themselves. It must be a challenging situation to control the rights to the character but not to the actual films franchise.
If the arrangement were to proceed as planned...that is MGM is revived as a new entity under Spyglass, I'm sure they would want to jump on a new Bond project ASAP. The only problem is that only works if Eon is willing to cooperate. After the dust settles from MGM, we might be seeing Round 2 take place between Eon and the new MGM.
EON really has no choice. MGM controls half of the Bond franchise.
If Michael and Babs say "We're not making any more movies," there's nothing MGM can do since they have to go to Eon for the rights to use the character. If Spyglass is expecting Bond (and The Hobbit) to be the tentpoles for the new MGM, Eon might very well say "What's in it for us?"
Actually they would have to go to both Danjaq and United Artists. The Brocolli Family does not own UA and they share the copyright with them. If they decided to stop making the Bond films they would have a big legal headache.
First, as Tony pointed out, MGM will need to declare bankruptcy, at which point a court appointed administrator will have to come in and sort out all the "harmed parties" claims. Although this appears to a pre-packaged bankruptcy where all the debt holders agree in advance to a settlement, one party that thinks they are getting the short end of the stick can delay a final settlement.
Second, even though a pre-packaged deal would seemingly get settled quickly, another studio that feels they can offer a better deal could step forward and submit a deal of their own, which the court admistrator would have to consider.
Third, it looks like MGM/Spyglass is going to have a lot of owners, with the various MGM debt holders getting equity and Spyglass executives getting a slice, The debt holders are hedge fund guys, I doubt they care about the art of filmmaking, they care about making money so if they see a chance at a better deal they would jump at it.
Fourth, as Darenhat pointed out, don't assume Babs and Mike will jump start the next Bond film as soon as the ink is dry on the final deal. They may be looking to strengthen their hand, because as I said hedge fund guys will own MGM, they will want box office receipts ringing and that means a new Bond film. Therefore, Babs and Mike may be able to get a better deal for themselves by holding out.
All of the above is my own analysis and I could be wrong about everything, I just want to point out that I don't think a Bond film will be starting anytime soon.
Does anyone have any up to date gossip on what is going to happen to the new Bond Film???
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Check it out:
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