At the beginning of a movie, it tends to start off with some background music, with logos popping up. Well those are the names of the studios that created the movie you are about to watch. MGM Studios (Metro-Goldwyn-Mayer) was one of the major film studios of our time. For almost a century, MGM created dozens of multimillion-dollar movies. Until recently MGM’s multimillion business has fallen creating an open door for two potential buyers to salvage the company.
It all started in November 2010 when MGM filed for a Chapter 11 bankruptcy, which came as a shock to the film industry. MGM Studio will rid itself of $4 billion in debt from major lenders such as JPMorgan and Credit Suisse to protect itself. MGM apparently knew about this issue because Andrew Moran of “Digital Journal,” explains “It has been more than a year for MGM and its creditors to come up with a reorganization strategy”(Moran). Moran adds, MGM was offered a deal from Time Warner of $1.5 billion for acquisition of the company, but creditors felt the deal was not sufficient because of MGM’s critically acclaimed blockbuster hits such as “The Wizard of Oz” and the James Bond franchise. Due to the bankruptcy, MGM was in search of potential buyers to resalvage part of the MGM franchise.
In late November 2010, MGM’s prime investor, Carl Icahn, sought a potential buyer in Spyglass Entertainment. In The New York Times, Andrew R. Sorkin claimed Icahn sought to reach a settlement, which would limit the role of executives at Spyglass Entertainment after the merger. While Icahn’s settlement was in the process though, MGM received another potential bid from Lions Gate Entertainment Corporation. Nikki Finke of Deadline Hollywood reported Icahn’s previous history with a Lions Gate filmmaker, Jay Firestone. She stated Icahn was reluctant to work with Firestone because Firestone apparently burned through $100 million in finances at a previous company they worked at. Fortunately, as of February 9, 2011, MGM is now partially owned by Spyglass Entertainment and is now finalizing a deal with Sony Pictures regarding move distribution.
Currently, Gary Barber and Roger Brinhaum, CEO executives of Spyglass Entertainment, are seeking a deal with Sony Pictures. This will allow MGM to have movie distribution and co-financed movies already in production. Deadline Hollywood’s Nikki Finke and Mike Fleming reported Sony Pictures landed a deal to produce the new James Bond Movie, Bond 23, as well as The Girl with the Dragon Tattoo. “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. “
“…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.” (Finke & Fleming). The Girl with the Dragon Tattoo is already in production in Sweden, which is one step for MGM to salvage their company. In addition, to be part of those two future blockbuster hits, Sony Pictures developed a final deal to settle MGM’s lawsuit. New York Times reporter James Sterngold claims that Sony Pictures will pay MGM $10 million to settle their lawsuits. MGM will initially pay $5 million back to Sony for doing the reboot of Casino Royale back in 2006. Thanks to Spyglass and Sony Pictures, MGM’s name will return in the future.
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Finke, N. (November, 2010 24). Update: carl icahn wants 2nd hollywood vip for his lionsgate board + mgm news. Retrieved from http://www.deadline.com/tag/lionsgate-mgm-merger/
Finke & Fleming, N & M. (February 8, 2010, 2011 8). Sony about to recapture james bond #23; update: mgm leverages 007 for deal on sony’s ‘the girl with the dragon tattoo’. Retrieved from http://www.deadline.com/2011/02/sony-about-to-recapture-james-bond-23-mgm-leverages-007-for-co-finance-deal/
Fritz, Brian. (February 8, 2010, 2011 8). Sony finalizing distribution and co-financing deal with mgm, including next two ‘bond’ films. Retrieved from http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/02/sony-mgm-distribution-bond.html
Moran, Andrew. (November, 2010 3). Metro-goldwyn-mayer studio files for chapter 11 bankruptcy. Retrieved from http://www.digitaljournal.com/article/299789#tab=comments&sc=0
Sorkin R. , Andrew. (November, 2010 3). Mgm files for bankruptcy protection. Retrieved from http://dealbook.nytimes.com/2010/11/03/m-g-m-files-for-bankruptcy/