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Anthro Girl
September 13th, 2004, 04:37 PM
This news just out today:

Sony, Partners OK MGM Acquisition (http://www.forbes.com/home/feeds/ap/2004/09/13/ap1542539.html)


If the deal happens, it would mark the third time billionaire Kirk Kerkorian has sold the film studio, once best known for its musical hits like "Singing in the Rain" and "Meet Me in St. Louis." Kerkorian, through his Tracinda Group, owns 74 percent of MGM's outstanding shares. A sale to Sony would net him about $2.1 billion.

Since Kerkorian most recently acquired the studio in 1996, MGM has had few major hits. Sony is expected to shutter MGM's current production with the possible exception of the "James Bond" franchise. MGM also produces films under the United Artists label.

But MGM has a considerable library of more than 4,100 titles. Analysts have estimated MGM's library will generate $440 million in cash flow in 2004 by exploiting only 1,500, or about 36 percent, of its titles on the newer DVD format.

Does anyone know what "shutter" means in this context? It sounds like they're just talking about film (motion picture) productions, but the press release from MGM identifies MGM Television Entertainment - who owns Stargate, Stargate SG-1, Stargate Atlantis, characters and images - as being part of MGM, Inc., which is the company being acquired.

Big corporations easily confuse me, so I just thought I'd ask...

morjana
September 13th, 2004, 05:41 PM
Update news article:

From the San Diego Union Tribune:

http://www.signonsandiego.com/news/business/20040913-1724-ca-mgmsale.html

MGM agrees to be acquired by Sony-led group for $3 billion

By Gary Gentile
ASSOCIATED PRESS
5:24 p.m. September 13, 2004

LOS ANGELES – A consortium led by Sony Corp. has agreed in principle to acquire famed Hollywood studio Metro-Goldwyn-Mayer Inc. for nearly $3 billion, MGM said late Monday.

The company said it received a cash deposit of $150 million on Monday from Sony, along with private equity companies Providence Equity Partners Inc., Texas Pacific Group and DLJ Merchant Banking Partners.

MGM said its management will recommend the deal, which it called a "proposed merger" to its board by Sept. 27.

Sony has agreed to pay $12 per share for MGM, 45 cents more than MGM's closing price of $11.55 Monday on the New York Stock Exchange. The deal also calls for Sony to assume about $1.9 billion in MGM debt.

Sony's winning bid comes after Time Warner Inc. dropped out of the competition earlier Monday.

The sale would mark the third time billionaire investor Kirk Kerkorian has sold the film studio, once best known for its musical hits like "Singing in the Rain" and "Meet Me in St. Louis." Kerkorian, through his Tracinda Group, owns 74 percent of MGM's outstanding shares. The sale to Sony would net him about $2.1 billion.

Sony is expected to shutter MGM's current production, with the possible exception of the "James Bond" franchise. MGM also produces films under the United Artists label.

But MGM has a considerable library of more than 4,100 titles, including the "Pink Panther" and "Rocky" franchises. Analysts have estimated MGM's library will generate $440 million in cash flow in 2004 by exploiting only 1,500, or about 36 percent, of its titles on the newer DVD format.

Time Warner had been seen as the front-runner for MGM going into the weekend. But Sony raised its offer, setting off a bidding war that Time Warner concluded it did not want.

"As we pledged to our shareholders, we approach every potential acquisition with strict financial discipline," Time Warner chairman and chief executive Dick Parsons said. "Unfortunately, Time Warner could not reach agreement with MGM at a price that would have represented a prudent use of our growing financial capacity."

Parsons, who has often said Time Warner is interested in expanding its presence in cable television, hinted Monday that the cash it saved from the MGM bid could be used to bolster its cable presence. "We are confident that there are other capital allocation choices that will enable us to continue to build shareholder value," Parson said.

Time Warner is known to be interested in bidding on the cable assets of bankrupt Adelphia Communications Corp.

Sony has also approached cable television giant Comcast Corp. about becoming a minority investor in the new company after the Sony/MGM deal closes, although no deal has been reached, according to a source familiar with those discussions.

Comcast and Sony have reached a deal to distribute Sony's Columbia/Tri-Star film library on Comcast's video-on-demand platform, the source said. That deal could expand to include MGM's library of films and result in Comcast making an investment in the new company.

A Comcast spokeswoman declined to comment.


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Morjana

SG1-Spoilergate
http://tv.groups.yahoo.com/group/SG1-Spoilergate/

Richard Dean Anderson Fans
http://movies.groups.yahoo.com/group/rdandersonfans/

Anthro Girl
September 13th, 2004, 06:02 PM
Update news article:

From the San Diego Union Tribune:

http://www.signonsandiego.com/news/business/20040913-1724-ca-mgmsale.html

MGM agrees to be acquired by Sony-led group for $3 billion... [snip]

Sony is expected to shutter MGM's current production, with the possible exception of the "James Bond" franchise. MGM also produces films under the United Artists label.

So...what does that mean??? Anyone? Anyone? As far as movies are concerned, they've got The Pink Panther and an Amityville Horror remake upcoming for 2005 and a remake of Back to School with Cedric The Entertainer (arrgh) and a movie about a man dating a succubus for 2006. That's what is listed on IMDB.com, anyway.

Is that what they're "shutter"-ing...if shuttering is what I think it is?

keshou
September 13th, 2004, 06:09 PM
Stargate, Stargate SG-1, Stargate Atlantis,[/i] characters and images - as being part of MGM, Inc., which is the company being acquired.

Hmmm....not much to go on. Maybe there will be further details in the WSJ tomorrow. The word "shutter" makes me a little nervous though, especially since Sony seems to be primarily interested in MGM's existing film library. And "shutter" means just what you think it does - shutting down production of new movies (except the ever-young 007).

It doesn't really mention MGM's TV division, but you can bet Sony will be reviewing everything they're acquiring. Those things take time, though, so there may not be any immediate changes. Certainly interesting news.

Wonder if this will be a factor in the current negotiations between MGM and Scifi for more seasons of SG-1 and Atlantis?? It could certainly slow things down.

morjana
September 13th, 2004, 06:15 PM
Does anyone know what "shutter" means in this context? It sounds like they're just talking about film (motion picture) productions, but the press release from MGM identifies MGM Television Entertainment - who owns Stargate, Stargate SG-1, Stargate Atlantis, characters and images - as being part of MGM, Inc., which is the company being acquired.

Big corporations easily confuse me, so I just thought I'd ask...

Thanks for asking that question, because I was curious too!

I went looking, and found a more in depth article here:

http://www.bizreport.com/news/7578/


And this paragraph:

**If [Time Warner] bought MGM, we believe they would essentially shutter MGM's new production, and purely harvest the library cash flow [and] production franchises (like Bond) as well as exploit the developing international movie channels MGM has created," the investment research firm Fulcrum Global Partners LLC wrote in an analysis of the MGM-Sony-Time Warner activity yesterday.**

Which I'm taking as meaning closing (shutter) down MGM's new (movie) production, except for the James Bond franchise.

Morjana

kiwigater
September 13th, 2004, 07:40 PM
:eek: sounds very ominous, "shuttering"
I hope it wouldn't apply to Stargate. First off, at least for now, it's not a movie franchise, and if they decided to do a movie, it's less of a risk, cos it already as an established fan base. Also, seeing as Sci Fi is apparantly paying for the seires, what difference does it make to Sony, as long as it not losing money...

If Sony decides to cancel Stargate just because it's not "profitable" enough, they can kiss my patronage goodbye for all their other endeavers!
Got a new film out? Tough, I won't be going to see it. Got a new movie on DVD? probably should have thought of that......

*directs pointed look at Sony executives*
I have only a few entertainment dollars to spend, and I won't be spending it on them if they cancel Stargate simply because they don't feel like supporting it (now, if they don't do another season for other valid reasons, that's different).

morjana
September 13th, 2004, 10:15 PM
Another update article, this one mentions the MGM TV Division:

From Variety (via Yahoo News):

http://news.yahoo.com/news?tmpl=story&u=/variety/20040913/va_fi_ne/lion_will_learn_japanese_2

Movies - Variety


Lion will learn Japanese

Mon Sep 13, 7:25 PM ET
Ben Fritz, Michael Learmonth, STAFF

James Bond has a new sugar daddy.


A group led by Sony Corp reached an agreement in principle with Metro-Goldwyn-Mayer to acquire the studio for nearly $5 billion, hours after presumed front-runner Time Warner ankled the bidding.

Deal not only gives Sony the biggest library in Hollywood with more than 8,000 pics, but also valuable assets to set up TV distribution deals and the opportunity to make sequels based on some of Hollywood's most storied franchises, including James Bond.

Time Warner pulled out of the auction early Monday, saying the bidding for the Lion, which owns the James Bond, Rocky and Pink Panther film franchises, had gotten too high after Sony upped its bid over the weekend

Sony agreed to pay $12 a share for the studio, which amounts to $2.94 billion, plus the assumption of $2 billion in debt. Sony is backed by Texas Pacific Group, Providence Equity Partners and DLJ Merchant Banking Partners.

Deal now heads to MGM's board for approval, which is expected to occur by Sept. 27.

Key to Sony's apparent victory is the involvement of Comcast Corp., which put no money into the deal but agreed to package Sony and MGM content into a number of movie channels and video-on-demand offerings.

The agreement allowed Sony to justify a higher price for the Lion. In return, Comcast gets access to thousands of pics and TV shows, fulfilling the dreams of a broadband-content combo that fueled its attempt to acquire Disney earlier this year.

In addition, Sony offered Comcast the opportunity to become a minority investor in the Sony-MGM entity at a later date for up to $300 million.

Time Warner had been negotiating with the Lion since April and had, at certain points in the process, assumed it had a deal.

In the end, however, Time Warner was unwilling to budge above its $11-per-share offer. Conglom decided not to participate in a drawn-out bidding war after the Sony consortium raised its offer and proposed exclusive negotiations with MGM, including a $150 million deposit the Lion gets to keep even if a deal can't be reached.

JP Morgan, Credit Suisse First Boston, and Citigroup advised the Sony consortium, with JP Morgan and CSFB also acting as lead arranger and co-underwriter, respectively, for the debt financing.

Until the weekend, MGM management had been expected to greenlight Time Warner's $4.5 billion bid. Though Time Warner's bid was lower, it was thought to have an advantage because of its simpler structure.

The consortium led by Sony initially had problems agreeing on a structure for the deal, and MGM's majority owner, Kirk Kerkorian, was said to want a single check to cover the cost.


Lion's future


As news of the deal spread Monday, attention immediately turned to the implications for Sony and the future of the MGM name and its slate.

MGM has eight films set to bow in 2005, including the 21st installment of the James Bond franchise (due to start lensing sometime early next year); "Get Shorty" sequel "Be Cool"; the remake of "The Amityville Horror"; "Barbershop" spinoff "Beauty Shop"; actioner "Into the Blue"; and the return of "The Pink Panther."

Its more indie United Artists label planned to go wide with "Hotel Rwanda," "Romance and Cigarettes," "Art School Confidential" and "Capote."

MGM's television division produces the syndicated TV shows "Stargate" and spinoff "Stargate: Atlantis," as well as the Showtime series "Dead Like Me."

As the Sony/MGM deal awaits approval by regulatory authorities, sources say there will be a transition period -- which will likely last at least six months -- during which the two studios will operate separately. Yet after the deal is closed, MGM films will be released through Sony Pictures channels, though they still will carry the MGM label.

The James Bond franchise will be negotiated under a separate deal with the Broccoli family, but future Bond films would be handled by Sony releasing under the MGM name.

With Bond and Spider-Man under its control, insiders noted, Sony will now have two of Hollywood's most lucrative franchises.

As for UA, Sony already has two genre labels, Sony Pictures Classics and Screen Gems, and recently revived a genre distribution arm, TriStar.

Still unclear is whether any of MGM's approximately 1,300 employees will survive the transition, including toppers Alex Yemenidjian and Chris McGurk.

MGM employees have already been advised what their packages would be as of the deal's closure.

Also potentially up for grabs are the more than 20 first- and second-look production deals MGM and UA have with producers, including Hyde Park, the Jim Henson Co., Irish DreamTime, David Ladd, Dylan Sellers, State Street, and Irwin Winkler.

Overall the deal gives Sony, the only major studio that does not own a network, additional leverage in sealing distribution deals.

"Sony is in some ways the only studio left that's not part of a conglomerate and that has no TV distribution," said one insider. "One of the ways you control your destiny as a company is through content."

Along with VOD distribution through Comcast, Sony now has the opportunity to launch a 24-hour cable network made up of movies and TV series from Columbia and MGM's extensive libraries.

The channels will be established via joint venture with Sony and Comcast to be managed by the cable operator.

Sony pitched cable operators on just such a network a year ago, but was unable to land carriage for the project.

The two companies noted that even if the MGM deal falls through, they'll proceed to make Sony content available via Comcast's VOD platform.

Analysts saw MGM as more critical for Sony than for Time Warner, which already owns the world's largest film library.

"This was not a must-have asset for Time Warner and it was not a great price," said Richard Greenfield, analyst at Fulcrum Global Partners.

By passing on the deal, Time Warner keeps its powder dry and focus intact as the auction for Adelphia Communications begins. Time Warner management have said repeatedly they want to expand in cable, but chief financial officer Wayne Pace said last week that Time Warner had not yet seen Adelphia's books.

Deal establishes Comcast as a must-have for deals dependent on distribution. With its 22 million subscribers, Comcast was able to add value to the Sony bid just by agreeing to distribute its content.

(John Dempsey, Marc Graser, Nicole LaPorte and Dave McNary contributed to this report.)




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Morjana

SG1-Spoilergate
http://tv.groups.yahoo.com/group/SG1-Spoilergate/

Richard Dean Anderson Fans
http://movies.groups.yahoo.com/group/rdandersonfans/

Positively Kanyon
September 13th, 2004, 10:15 PM
Sony should be the last company trying to aquire more property. Last I heard, there was a major corporate reshuffle with about 1000 people losing their jobs, and the only department of Sony actually making money was PlayStation, and that was software only as they lose money on the hardware.

If Sony does scrap Stargate, I will be so pissed off that I will hunt down each and every board member myself and do something drastic.

Anthro Girl
September 13th, 2004, 11:39 PM
Another update article, this one mentions the MGM TV Division:

From Variety (via Yahoo News):

http://news.yahoo.com/news?tmpl=story&u=/variety/20040913/va_fi_ne/lion_will_learn_japanese_2

[snipsnip]
Along with VOD distribution through Comcast, Sony now has the opportunity to launch a 24-hour cable network made up of movies and TV series from Columbia and MGM's extensive libraries.
[snipsnip]

Hmmm...StargateTV? All Stargate? All the time? :D

GateGipsy
September 14th, 2004, 03:39 AM
According to the Media section of the Guardian in the UK, Sony has brought MGM

http://media.guardian.co.uk/city/story/0,7497,1304143,00.html

Mio
September 14th, 2004, 04:24 AM
Erk! I agree. "Shutter" isn't a good word....

keshou
September 14th, 2004, 07:47 AM
A few quotes from the Wall Street Journal article:

The deal would mark the end of MGM as a concern that produces new movies. A person familiar with the deal says MGM would cease most of its movie production except for films in the James Bond and Pink Panther franchises, potentially involving many hundreds of job losses.

MGM generates more than $400 million of cash flow a year from its stock of old movies.

Under the (separate) Sony/Comcast deal Sony has agreed to license to the cable company 200 movies a month from its existing movie library and 200 movies from MGM's library if it buys that company. Also under the deal Sony has agreed to make its thousands of hours of television and movie content available to a new venture that would develop cable networks.

So nothing specific to MGM's TV division. As far as SG-1 and Atlantis, I think it's just a wait and see deal. Could be good, could be bad.

ibwolf
September 14th, 2004, 08:03 AM
Shutter in this context means that any movies not already in the filming stage (or very near it) will be either cancelled or possibly produced under another label (Columbia probably). I don't think that that word relates to the TV production deals at all. Obviously it's unlikely that any new TV series will be produced under the MGM brand but there is no reason to expect them to axe Stargate assuming that SciFi is still interested in it and willing to pay for it. The decision of wether to continue Stargate (SG1 or Atlantis) will always rest with the SciFi channel. If it is willing to foot the bill then the show gets made (it would be stupid of the studio not to).

With costs of producing SG1 mounting it is only natural for MGM (or Sony) to expect more money. And SciFi may balk at that. That would though not be Sony's fault per se.

Edit: Also, given the timeframe involved the fate of SG1 season 9 and Atlantis season 2 will be decided before Sony takes charge. So they will only be involved once negotions begin for SG1 season 10 (on the off chance) and SGA season 3.

Livi2Jack
September 14th, 2004, 08:54 AM
Sounds like Sony just wants to "milk" the existing MGM library for all it is worth. Whether things in production continue or are shopped out to other studios is a mystery. But it sounds like the deal is to wring every dollar out of what already exists without incurring additional new costs for anything. They may consider Stargate as having enough film in the vault, making more unnecessary. Cooper mentioned that profits to MGM from Stargate's new filming are significantly lower than from a few seasons ago. Sony is a shrewd business outfit. Profit is everything.

Mio
September 14th, 2004, 09:09 AM
Sounds like Sony just wants to "milk" the existing MGM library for all it is worth. Whether things in production continue or are shopped out to other studios is a mystery. But it sounds like the deal is to wring every dollar out of what already exists without incurring additional new costs for anything. They may consider Stargate as having enough film in the vault, making more unnecessary. Cooper mentioned that profits to MGM from Stargate's new filming are significantly lower than from a few seasons ago. Sony is a shrewd business outfit. Profit is everything.
Well, they have to make a pretty penny off of the DVD sales for Stargate, so I'd imagine that having a season 9 to sell would probably be worth it.....

Hopefully.....

ibwolf
September 14th, 2004, 09:09 AM
Livi2Jack: Which is why I think SG1 is probably in it's last season unless SciFi is willing to pay more for the show. Stargate Atlantis on the other hand may be more profitable over the next few years.

Xzyl
September 14th, 2004, 02:28 PM
Livi2Jack: Which is why I think SG1 is probably in it's last season unless SciFi is willing to pay more for the show. Stargate Atlantis on the other hand may be more profitable over the next few years.

I am not worried. Sony can sell the episodes to Scifi at a loss then profit from syndication and DVD sales. Or they ask for a cut of the comercial profits. Or they could strike a deal where they keep the price favorable to scifi but mandate some other term such as selling it at price X for a guaranted 2 more season (some say of when it airs). Or any other condition that they can come up with.

Sony is also better at marketing and merchandising than MGM ever was.

Mio
September 14th, 2004, 02:54 PM
I am not worried. Sony can sell the episodes to Scifi at a loss then profit from syndication and DVD sales. Or they ask for a cut of the comercial profits. Or they could strike a deal where they keep the price favorable to scifi but mandate some other term such as selling it at price X for a guaranted 2 more season (some say of when it airs). Or any other condition that they can come up with.

Sony is also better at marketing and merchandising than MGM ever was.
So, My dreams of a Light up Realistic looking ZPM may not be so far off after all....

chiefchucky
September 14th, 2004, 06:10 PM
but then sony could get to involved in the production of stargate and end up doing what everybody feared the scifi channel would do.

Beatrice Otter
September 14th, 2004, 10:47 PM
Hmmm...StargateTV? All Stargate? All the time? :D
We already have that. It's called "The Sci-Fi Channel." :)

Xzyl
September 15th, 2004, 08:58 AM
So, My dreams of a Light up Realistic looking ZPM may not be so far off after all....
They would make for some nice christmas tree lights.


but then sony could get to involved in the production of stargate and end up doing what everybody feared the scifi channel would do.
Sony did not seem to meddle with its columbia tristar tv shows.

greytop
September 15th, 2004, 09:09 AM
I really don't care who buys what because they'll do it any way. Sony can buy MGM for all I care, just as long as they don't change any shows, especially Stargate!!!!

Shivan
September 15th, 2004, 09:46 AM
I really don't care who buys what because they'll do it any way. Sony can buy MGM for all I care, just as long as they don't change any shows, especially Stargate!!!!

I agree 100%

Indiana
September 15th, 2004, 11:32 AM
This deal may work out better for Stargate. For all we know the head of Sony is a Stargate fan and he secretly wants Stargate so he can get a couple of features out there. ;)

Positively Kanyon
September 15th, 2004, 06:00 PM
I've been hearing rumours that this is pretty much a done deal? Has any confirmation from either camp been sent out?

Erik Bloodaxe
September 15th, 2004, 09:45 PM
:eek: sounds very ominous, "shuttering"
I hope it wouldn't apply to Stargate. First off, at least for now, it's not a movie franchise, and if they decided to do a movie, it's less of a risk, cos it already as an established fan base. Also, seeing as Sci Fi is apparantly paying for the seires, what difference does it make to Sony, as long as it not losing money...

If Sony decides to cancel Stargate just because it's not "profitable" enough, they can kiss my patronage goodbye for all their other endeavers!
Got a new film out? Tough, I won't be going to see it. Got a new movie on DVD? probably should have thought of that......

*directs pointed look at Sony executives*
I have only a few entertainment dollars to spend, and I won't be spending it on them if they cancel Stargate simply because they don't feel like supporting it (now, if they don't do another season for other valid reasons, that's different).

I don't think we have to worry; hopefully Sony should know that if such a wide outburst happened due to Daniel being killed, then the reaction of Stargate itself being axed would likely be 100, nay, 1000 fold; and that it's in their best interests to keep it around, too. :D

-Bloodaxe

chiefchucky
September 17th, 2004, 03:55 PM
I don't think we have to worry; hopefully Sony should know that if such a wide outburst happened due to Daniel being killed, then the reaction of Stargate itself being axed would likely be 100, nay, 1000 fold; and that it's in their best interests to keep it around, too. :D

-Bloodaxe
IF they want to live they'll keep it around!!!! Otherwise I will do a Matt Daemon move like he did to the Mooby executives in Dogma!