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David Poland

By David Poland poland@moviecitynews.com

The Sad, Sad MGM Story

The ongoing saga of MGM now seems to be coming to its next indecisive fork in the road.
Whether it’s Spyglass or Summit, the plan seems the same… pretend MGM is in business until the value of the library rises again… or wait a while and take the massive hit at some strategic time.
Spyglass isn’t even going to bother distributing or, presumably, marketing their movies, as they don’t as a company now. So, essentially, they bring legitimacy to the table and MGM’s creditors help with a production fund and makes them a faux studio… that will distribute through Sony or Disney. The only real upside for Spyglass, aside from ego, is that they will own a piece of the MGM library as a result of bringing their pretty darn good track record to LeoLand.
Summit, on the other hand, needs to hide Twilight cash, and could use the infrastructure of MGM to do that, making the company too big to take over. They would market and distribute… and while unable to take distribution of The Hobbit(s) away from WB, they would likely try to be the company to go out with Bond. And given their success with the Twilight franchise, who could claim that it was a bad idea?
Either way, nothing real would be happening with MGM… except to keep the ball moving until, they hope, the market for the MGM library heads back uphill.
The difference between this and what Kirkorian/McGurk/Yemenidjian did is that there wasn’t such an obvious weight hanging over their heads. They maintained the “in business” illusion for a long time. Here, you can see the rabbit in the magician’s coat as they take the stage.
Regardless, it should work out well for whoever takes over. And I have very low expectations for the MGM creditors. Good luck, boys.
======
ADD, 6:51p – Not sure why this (
WHY NOW? Baffling Resurgence Of Rumor About MGM-Lionsgate Merger Talks)
is confusing Nikki Finke.
NONE of these deals being bandied about are actually MERGERS.
These are deals for production companies/studios to try to set up an ongoing production business at MGM that will allow the company to be sold for more next year or the year after, keeping the loss from being as painful. Of course, Lionsgate would love to be in that position. It’s a much, much, much better opportunity than buying a library for a couple of billion. And Icahn would be fine with it. There is no indication that any of the companies vying for position are putting up any cash, aside from production money for new product.
Really, if DreamWorks/Reliance wasn’t at Disney and this kind of deal was on the table a couple of years ago, they would easily be the #1 choice for MGM creditors. AND with Spielberg aboard, they would have the best shot of all of these companies of creating value that would lead to the strongest possible long term valuation of MGM.
But that isn’t on the table.
If Chris McGurk had more of a track record with Overture, you can be sure they would be in the game too. If Imagine wanted it and could get out of Universal to do it, they would be a top choice.

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One Response to “The Sad, Sad MGM Story”

  1. IOv2 says:

    I wish I knew a billionaire because I would ask it to buy freaking MGM, so I did not have to read about this stupidity anymore. It’s just so dumb.

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