It seems a little to pie in the sky. Maybe it isn't. I think the schedule they want to establish for 007 will require a recast just to get someone able to keep up with demand grind. I don't see how they would have the time to do any project but 007.
This story can be found at New James Bond films may be released every second year starting in November 2012Metro-Goldwyn-Mayer Inc., distributor of the James Bond and Rocky movies, filed for bankruptcy in Manhattan federal court after rejecting a takeover bid by Lions Gate Entertainment Corp. and billionaire Carl Icahn.
The Los Angeles-based studio, which foundered after piling on debt to go private, filed a Chapter 11 petition today in U.S. Bankruptcy Court. About 80 percent of its creditors support a so-called pre-packaged plan to extinguish about $4 billion of debt and install managers from Spyglass Entertainment Group Inc., the producers of “The Sixth Sense.” Like Tribune Co. and the former Chrysler LLC, 86-year-old MGM filed for bankruptcy after a leveraged buyout.
“A balance sheet restructuring was the only viable alternative for the company to continue to operate as a going concern,” said Co-Chief Executive Officer Stephen Cooper, who led Enron Corp. through its bankruptcy. “By sharply reducing MGM’s debt load and providing access to new capital, the proposed plan of reorganization achieves these goals.”
MGM plans to spend as much as $125 million on operations in the next 15 weeks. MGM said it’s has already spent $20 million to fund production of films based on J.R.R. Tolkien’s novel, “The Hobbit,” in a co-production deal with Time Warner Inc.’s New Line Cinema, and may need to spend more. Three films based on “The Lord of the Rings,” the sequel to “Hobbit,” grossed about $3 billion at the box office worldwide, MGM said.
Hobbit Obligations
MGM estimated its total obligations to “The Hobbit” are $265 million to $275 million. The company said it is looking for “a third party” to fund those obligations. Its investment stake would be $40 million while the rest would be funded by a lender, MGM said. It’s sharing costs and ownership equally with New Line.
New James Bond films may be released every second year starting in November 2012, MGM said. It aims to own 50 percent of Bond 23, due out that year, with an equal partner paying all of the production costs, it said. Later Bond movies would be wholly owned and funded by MGM, the company said.
Losers in the bankruptcy may include the 2005 buyout group, which retains most of MGM’s existing stock. Tokyo-based Sony Corp. has a 14 percent stake; the Texas-based private equity firm TPG Capital, run by David Bonderman, has 23 percent; Providence Equity Partners Inc. has 34 percent; Comcast Corp. has 21 percent, and Credit Suisse Group AG affiliate DLJ Merchant Banking Partners, has 8 percent, according to a court filing.
Existing equity holders typically get little or nothing in a bankruptcy. The investment group in 2004 said it would put up $1.6 billion in equity financing to buy MGM and take on about $2 billion in debt.
The creditors committee that helped negotiate MGM’s debt restructuring includes Anchorage Capital Group LLC, Davidson Kempner Capital Management, Highland Capital Management, JPMorgan Chase & Co., Invesco Inc. and Solus Alternative Asset Management.
Their debt will be converted into most, or all of the equity in the reorganized company, according to court filings. The studio has assets of $2.7 billion and total liabilities of $5.8 billion; under generally accepted accounting principles, debt is $3.5 billion, MGM said.
MGM said its plan may be confirmed by the court within 30 days. After the bankruptcy, it aims to raise $500 million for operations, including for new movies and television series, it said.
In a competing bid, Lions Gate, based in Vancouver, offered about $1.7 billion in stock and debt to MGM creditors, representing a 55 percent stake in the combined company.
To win more MGM creditors, Icahn, who is Lions Gate’s largest shareholder and owns about 10 percent of MGM’s debt, offered 53 cents on the dollar for senior MGM loans, or about 18 percent more than the 45 cents the debt fetched in the market before Lions Gate’s Oct. 12 bid.
Icahn, who separately mounted a hostile takeover of Lions Gate, was sued by the company on Oct. 29 for allegedly “plotting” a merger of Lions Gate with MGM that would boost the value of his holdings in the two companies. He denied the allegations.
Today, Icahn said in an e-mailed statement he reached an agreement with Metro-Goldwyn-Mayer Inc. and the lender subcommittee to support MGM in its prepackaged bankruptcy. He will have to right to elect a director to MGM’s board after the bankruptcy, according to his statement.
“I am pleased that we were able to obtain an agreement to make changes to the MGM prepackaged plan that allows me to support it and enables the company to avoid a potentially costly and disruptive bankruptcy process,” he said.
While MGM is in bankruptcy court, any rivals will have to convince a judge as well as creditors that their proposals for MGM are better than the bankrupt company’s own plan.
MGM said it has enough cash on hand to fund “normal business operations” throughout its bankruptcy, including a month’s wages of $1.4 million, officers’ and directors’ compensation of $1.8 million, and as much as $3 million in fees to lawyers and advisers.
After the bankruptcy, MGM’s top managers will be Gary Barber and Roger Birnbaum, who run Spyglass and produced the supernatural thriller “The Sixth Sense,” the company has said.
MGM’s 4,000-title film and television library included “The Wizard of Oz” and “Gone With the Wind.”
The studio was hobbled with debt in the 2005 buyout. Revenue fell as new technology cut into DVD sales, the most profitable part of Hollywood studios’ business, according to Adams Media Research.
Industry DVD sales dropped about 10 percent to $13 billion in 2009, according to the research firm in Monterey, California. In May 2009, MGM hired investment bank Moelis & Co. to help restructure its debt.
MGM Chairman Harry Sloan stepped down as chief executive officer in August 2009, as MGM created an office of the CEO with film head Mary Parent, Chief Financial Officer Bedi Singh and Stephen Cooper, a turnaround specialist. Sloan remained as chairman.
After inviting takeover bids, MGM said it never got an offer high enough at an auction where bidders included Time Warner, which bid about $1.5 billion, and News Corp., according to people familiar with the matter.
Along with Sony and TPG, MGM’s buyout group included Quadrangle Group LLC, according to the studio’s website.
The New York private equity firm Cerberus Capital Management LP has an investment in Los Angeles-based Spyglass.
MGM’s largest unsecured creditors are NBC Universal Inc., with $34.6 million owed; Showtime Networks Inc., with a $25.5 million claim, and Rainbow Media Holdings, with $22.9 million, according to a court filing. MGM said today it expects to pay all valid general unsecured claims.
MGM was controlled by billionaire Kirk Kerkorian at the time of the 2005 buyout, which was his third sale of the studio. He first sold it to Ted Turner in 1986 and then bought it back, leaving the pre-1948 library with Turner, who used it to create movie-oriented cable networks that included Turner Classic Movies, now owned by Time Warner.
Kerkorian later sold the part of MGM he retained to Italian financier Giancarlo Parretti, who lost it to the French bank Credit Lyonnais SA after defaulting on loans used to buy the studio.
With studio executive Frank Mancuso, Kerkorian bought MGM a third time in 1996 for $1.3 billion in cash.
MGM’s filings were made by New York-based Skadden Arps Slate Meagher & Flom LLP, hired under a retainer to help the company with its bankruptcy.
The case is In re Metro-Goldwyn-Mayer Studios, Inc. 10- 15774, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Linda Sandler in New York at lsandler@bloomberg.net; Tiffany Kary in New York at tkary@bloomberg.net.
