Can Leo the Lion survive?
That's the question Hollywood's mulling as MGM heads into a potential asset auction over the next several months -- without much optimism. Friday's announcement that would explore a possible sale, merger or remaining as a stand-alone was met by a combination of skepticism and resignation.
"It's sad because there's probably going to be one less buyer," one tenpercenter at a major agency noted.
MGM also disclosed that bondholders, in a Friday conference call, had agreed to hold off receiving debt payments for seven more weeks until Jan. 31. The exemption on an undisclosed amount of interest payments on its $3.7 billion in debt was the second in two months.
The first step toward an auction is for investment bankers Moelis & Co., hired in May by MGM, to send non-disclosure agreements to possible bidders as a prelude to seeing MGM's internal books.
In the meantime, current MGM leadership will stay in place and production chief Mary Parent will continue to shepherd a small production and development slate. Here's how the future stacks up for the Lion:
n Friday's exemption interest payments will allow MGM to continue to complete a quartet of films already set for release: "Hot Tub Time Machine" in March, "The Zookeeper" in October, "Red Dawn" in November and a 3D version of "Cabin in the Woods" in early 2011.
n MGM remains co-financier with New Line on "The Hobbit," set to go into production around spring in New Zealand with two films shot back-to-back by Guillermo del Toro. Exec producers Peter Jackson and Fran Walsh are still working on the script and no cast has been announced. The two pics have tentative release dates of late 2011 and late 2012.
n MGM continues to develop the 23rd James Bond film. The most recent announcement on the Bondpic came in June when Michael G. Wilson and Barbara Broccoli of EON Prods. and MGM disclosed Peter Morgan, Neal Purvis and Robert Wade were writing the script for the film, which does not have a director attached yet. Purvis and Wade most recently worked on "Quantum of Solace" and "Casino Royale."
Daniel Craig said a month ago he believes shooting will start in late 2010.
n Development work continues on a reboot of "Poltergeist," but no production start's been set.
MGM had no comment beyond Friday's announcement, which said the debtholders agreed to hold off receiving interest payments "in support of the company's ongoing efforts to develop and evaluate long-term strategic alternatives to maximize value for its stakeholders."
Granting MGM debt relief until Jan. 31 will enable it to find out how much the assets are actually worth. The maneuver also prevents creditors from forcing MGM into an involuntary bankruptcy.
MGM was taken private in 2005 for nearly $5 billion by a consortium led by Providence Equity Partners, Texas Pacific Group, Sony and Comcast Corp. Likely buyers include Time Warner, News Corp. and Lionsgate
Source: www.variety.com / by Dave Mcnary