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**prion** · 01 June 2009, 03:46 AM

http://www.hollywoodreporter.com/hr/...25b0baabfb8748

Studio cuts create new deal dynamic
Some buyers worry cost-cutting could affect series quality
By Elizabeth Guider and Steve Brennan

May 31, 2009, 07:12 PM ET

EXCERPT:

Among the comments from a variety of buyers from different territories, Warners' overall slate, Disney's "Flash Forward," HBO's "Hung," MGM's new "Stargate" and Sony's new offerings were all rated positively. Dramas got much higher marks than comedies, with Hay suggesting all of the latter were too broad or family-oriented for the tastes of the Channel Four audience. (He did buy Fox's "Cleveland," which he said fits the cheeky tone the station looks for from American sitcoms.)

REST AT LINK ABOVE

**trupi** · 18 August 2009, 02:51 PM

Harry Sloan out as CEO at MGM
August 18, 2009 | 9:45 am

Metro-Goldwyn-Mayer Inc. Chief Executive Officer Harry Sloan has been pushed out of his job at the struggling movie studio.

SLOAN Although Sloan will stay on as a non-executive chairman and remain on the studio's board of directors, the company has created an office of the CEO with three senior executives in charge of the studio's operations.

The big three are Mary Parent, the head of MGM's worldwide motion picture group; Bedi Singh, MGM's chief financial officer; and Stephen Cooper, who has been named vice chairman and whose experience is in capital restructuring.

MGM is scrambling to deal with its heavy debt load of $3.7-billion dollars and has not had a movie in release since last Christmas. Its next scheduled release is a remake of "Fame," which is to debut on Sept. 25.

A media entrepreneur, Sloan was recruited in 2005 to turn the beleaguered studio around by MGM's consortium of investors, which includes Sony Corp. of America, Comcast Corp., Providence Equity Partners and Texas Pacific Group.

**trupi** · 19 August 2009, 03:00 PM

Another article on Sloan's firing:
The Tuesday ouster of Harry Sloan as chief executive of Metro-Goldwyn-Mayer Inc. underscores the continued turmoil at the debt-ridden independent studio since it was taken over by private equity owners five years ago.

MGM, which is struggling to refinance its $3.7-billion bank loan, will be overseen by a newly created "office of the CEO," composed of production head Mary Parent, Chief Financial Officer Bedi A. Singh and Stephen F. Cooper, a restructuring expert who joins the Century City company as vice chairman.

A successful media entrepreneur who had never run a major studio, Sloan was recruited in 2005 by MGM's consortium of owners, which includes Sony Corp. of America, Comcast Corp. and lead investors Providence Equity Partners and Texas Pacific Group.

At the time, Wall Street said that the investors had overpaid billionaire Kirk Kerkorian for the 80-year-old studio, which cost them $5 billion, despite MGM's valuable film library of 4,000 titles that included the lucrative James Bond and Pink Panther movie franchises.

Since then, Sloan has failed to make MGM a viable competitor in Hollywood. The studio hasn't released a movie since "Valkyrie," starring Tom Cruise, last Christmas. In a much-ballyhooed move in late 2006, Sloan persuaded Cruise and his then-producing partner Paula Wagner to revive MGM's moribund sister studio United Artists. But that misguided move proved disastrous, with Wagner forced out after less than two years.

After two days of intense meetings, MGM's board voted Monday night to push aside Sloan -- exactly one year after the directors gave him a three-year contract extension. MGM said Sloan would be a nonexecutive chairman.

"This is an embarrassment for Harry Sloan, but it's a big black eye for the private equity guys who came marching in with big numbers and were very arrogant," media analyst Harold Vogel said. "Now they have a big loss on their hands and they don't know how to fix it."

Most industry watchers believe that MGM will not survive much longer as an independent studio and is likely to be sold to a bigger media company such as Time Warner Inc. or merged with another movie and TV studio like Lions Gate Entertainment Corp. Qualia Capital, a private investment firm headed by Amir Malin and Ken Schapiro, is actively looking at MGM, said a person with knowledge of the situation.

Parent, a former top executive at Universal Pictures whom Sloan hired in March 2008 to put MGM back in movie production, has been hamstrung by MGM's financial woes and inability to raise sorely needed film funding.

With Sloan moved aside, Parent could have exercised an out in her four-year contract, but is opting to stay put -- at least for now.

"I believe we're going to get through this," Parent said. "And I'm really excited that Steve is on board to guide us."

MGM officials said Cooper, 62, who has more than 30 years of experience as a financial advisor, would focus on improving the company's balance sheet.

A co-founder and former chairman of New York-based Zolfo Cooper, Cooper is billed as a "turnaround industry pioneer." As CEO of Enron Corp. from 2002 to 2005, he led the beleaguered company through its bankruptcy. According to published reports, he was less successful in turning around Krispy Kreme Doughnuts Inc. when he took the helm in 2005, and, more recently, Hawaiian Telcom Communications Inc., which filed for bankruptcy protection last year.

Cooper, who was not available for comment, has his work cut out for him at MGM. Three months ago, the studio hired investment banking firm Moelis & Co. to help restructure its heavy debt, which is owed to 140 creditors. MGM faces a debt payment of nearly $1 billion in June 2011, with the remainder of the loan due in 2012. Also, MGM has a $250-million revolving credit facility that matures in April 2010.

MGM, which employs about 450 people, has largely been funding operations out of cash flow from its library, which in fiscal 2009 generated more than $500 million.

Meanwhile, Parent has aggressively been putting movies into production. MGM's next scheduled release, an $18-million remake of "Fame," co-financed by Lakeshore Entertainment, is due out Sept. 25. The studio has no other movies coming out this year.

MGM has two films in post-production that are poised for release next year: "Cabin in the Woods," a $30-million comic horror-thriller, and "Hot Tub Time Machine," a $35-million comedy starring Jon Cusack. The studio began production this week on a $75-million comedy, "The Zookeeper," starring Kevin James. MGM plans to begin production on a remake of "Red Dawn" in September.

It's unclear whether MGM will have the financial wherewithal to co-finance two big-budget "Hobbit" movies with executive producer Peter Jackson and New Line Cinema/Warner Bros. and to produce the 23rd installment of the James Bond series.

**leiasky** · 19 August 2009, 03:13 PM

Oh lord would I be in hog heaven if my company bought out MGM.

Great find. Much better in depth article.

**Nathan Reynolds** · 25 September 2009, 05:04 AM

www.worstpreviews.com has stated that MGM is on the verge of bankruptcy and james bond movies and the hobbit movie are in danger of "cancelation". I was wondering what about the Stargate Franchise?????
Doesnt MGM own Stargate?
Is that the reason that we didnt get no more stargate movies after the success of the others?

IS THIS THE END? (too much?!)

**TheRandomOne** · 25 September 2009, 07:38 AM

I've collected several knowledgeable accounts of what happened during yesterday's multi-hour contentious MGM conference call with bondholders who were "very loud and very upset". Here's why:

The call was for the benefit of the lenders, and MGM management made the presentation along with Stephen F Cooper, that Zolfo Cooper restructure specialist. MGM made a desperate plea for money because the studio had missed its numbers and was going to be out of funds very soon. "The implication was that it's teetering on bankruptcy," one source told me. MGM said it needed $20M in short-term cash flow to cover overhead, and an additional $150 million to get through the end of year and continue funding its projects, and to start Peter Jackson's Hobbit.

Some say the call lasted 6 1/2 hours. Others said it lasted 2 1/2 hours with lenders, and then the lenders themselves had a conference call that lasted another 2 hours. After the MGM presentation, several bondholders spoke, "and they were irate", an insider tells me. True, this regularly happens on bad news calls like this. But in this case the creditors who hold MGM's term loan debt blame Harry Sloan for MGM overpromising and then missing its numbers, which was discussed during the summer and why he was removed as CEO. "They're not happy that Sloan let the company go in this direction but they understand what’s going on. It’s unfortunate, but they get it that the company is in a distressed situation, and they have to figure out an action plan moving forward," a source explains to me.

The conference call was planned to present the creditors with a request, or forebearance, to waive interest payments on MGM's $3.5 billion killer debt until February 2010. Because if MGM doesn’t have to make those interest payments, then the studio can afford to use that money instead to fund the production slate. The bondholders couldn’t understand why the equity holders wouldn’t fork over the dough. But the equity holders aren’t interested in writing a check because they understand that their equity is way under water already, and there's no upside for them. So, in essence, the equity holders have already written off their investment in MGM. But the bondholders have that $3.7 billion of nominal debt currently trading in the secondary market at about $.55–$.57 cents on the dollar. It's been trading in this low $.50s range for a while, so the marketplace is saying that the company is not worth more than $.56 times $3.7 billion. (And that's probably high.)

As a result, the bondholders are not in a great situation and therefore not feeling generous. On the other hand, if MGM were sold off today, most investment bankers don’t think it would fetch more than $1.5 billion to $1.75 billion at auction. This would mean that bondholders would recover less than $.50 on the dollar. This would be an even worse outcome.

So the bondhholders said to MGM, in essence, that they were going to let the studio go bankrupt and collect their money since they'd be first in line to get paid. But Cooper explained that this would be the worst possible outcome for the creditors and the company. Because if MGM were forced into bankruptcy, then it would lose James Bond and the studio doesn't think it can stay alive without 007. Also, a lot of other issues would surface that would tremendously hurt MGM.

Also, if MGM goes through bankruptcy, that's a very expensive prospect (where only the lawyers get rich), and extremely disruptive (since who would do business with MGM in the interim) and won’t get the creditors what they want which is their money back. It's more than simply MGM losing Bond. The studio could lose a lot of other franchises.

I can’t tell you whether the bondholders will agree to the forebearance or not. It requires a 51% approval vote. But some of the smart people I've contacted do think the creditors will eventually realize that a restructuring of MGM outside of the bankruptcy process is probably the best course right now.

So what's next? MGM now has to formally ask for forbearance, and the bondholders formally respond.

http://www.deadline.com/hollywood/ex...ssible-outcom/

**prion** · 25 September 2009, 08:08 AM

Mind you, this IS the NY POST....

http://www.nypost.com/p/news/busines...2ByK4N6eWv1MJO

Liquidation threatens debt-laden MGMBy PETER LAURIA
Last Updated: 11:19 AM, September 25, 2009

EXCERPT:

The efforts to restructure Metro-Goldwyn-Mayer's massive debt load are beginning to play out like a war movie that, at this point, the studio itself could have trouble financing.
According to multiple sources, discussions between the studio's debtholders and equity owners have begun on a contentious note, with both sides threatening to force MGM into bankruptcy in order to gain leverage and extract better terms from the other.
Both sides staked out their positions during two conference calls Wednesday afternoon that lasted a combined six hours, according to a half-dozen sources on the call.
They described the calls, led by Zolfo Cooper restructuring specialist Stephen Cooper, as openly antagonistic, with some debtholders like Leon Black's Apollo Management and Stark Capital Partners threatening to push MGM into involuntary bankruptcy if their terms weren't met.
Until MGM defaults on one of its loans or funding obligations, however, the debtholders, who are being represented by JPMorgan Chase, can't liquidate the studio because equity owners -- Texas Pacific Group and Providence Equity Partners the most prominent among them -- are in control.

REST AT LINK ABOVE

I love it (NOT) when 'equity' people are in charge of stuff...

**nobycane** · 25 September 2009, 11:23 AM

Not to rock the boat here or anything.....but yes, we know that TPTB have given the SG1 movie a "greenlight" - which is nothing more that the paperwork has been signed to allow writers, producers,etc. to begin organizing the film....and we know there is a good script for the Atlantis movie too - which is basically on the back-burner.

But an interesting note.......this from AICN.com, is the latest report indicates that MGM is on the verge of bankruptcy, which if this is the case......then a lot of their projects (big or small) is on hold until they can reorganize their finances and get them out to of the negative. Here is the article: http://www.aintitcool.com/node/42494
Which it also mentions that the Bond & new Hobbit movies are at risk too.
This could be one of the reasons that the Stargate movies are not moving forward in a timely fashion?

"MGM made a desperate plea for money because the studio had missed its numbers and was going to be out of funds very soon. "The implication was that it's teetering on bankruptcy," one source told me. MGM said it needed $20M in short-term cash flow to cover overhead, and an additional $150 million to get through the end of year and continue funding its projects, and to start Peter Jackson's Hobbit.
[EDIT]
...if MGM were forced into bankruptcy, then it would lose James Bond and the studio doesn't think it can stay alive without 007.
[EDIT]
Also, if MGM goes through bankruptcy, that's a very expensive prospect (where only the lawyers get rich), and extremely disruptive (since who would do business with MGM in the interim) and won’t get the creditors what they want which is their money back. It's more than simply MGM losing Bond. The studio could lose a lot of other franchises."

**VSS** · 01 October 2009, 01:46 AM

Report of Summit Entertainment possibly buying MGM:
http://www.reuters.com/article/rbssT...13767020090929

**Madwelshboy** · 02 October 2009, 03:18 AM

MGM holds on to 'Hobbit' rights

MGM has secured financing to move forward with its two-part adaptation of The Hobbit.

Recent reports surfaced claiming that the studio had been threatened with bankruptcy and needed a $170 million cash injection to continue operating through to the end of the year.

According to The Hollywood Reporter, the cash-strapped studio has entered into a forbearance agreement with its lender group. Under the terms of the deal, MGM will forego interested payments - due for September 30, October 31, and November 30, 2009 - on its $3.5 billion debt.

The first interest payment will be made on December 15, allowing MGM to free up funds to continue with its production slate.

http://www.digitalspy.co.uk/movies/a...it-rights.html

**VSS** · 02 October 2009, 03:31 AM

Originally posted by Madwelshboy View Post

MGM holds on to 'Hobbit' rights

MGM has secured financing to move forward with its two-part adaptation of The Hobbit.

Recent reports surfaced claiming that the studio had been threatened with bankruptcy and needed a $170 million cash injection to continue operating through to the end of the year.

According to The Hollywood Reporter, the cash-strapped studio has entered into a forbearance agreement with its lender group. Under the terms of the deal, MGM will forego interested payments - due for September 30, October 31, and November 30, 2009 - on its $3.5 billion debt.

The first interest payment will be made on December 15, allowing MGM to free up funds to continue with its production slate.

http://www.digitalspy.co.uk/movies/a...it-rights.html

I would like to think this will make a difference but those payments total to around $50 million, and they needed $20 million just to keep the lights on. What are they going to do in December?

**Jeff O'Connor** · 08 October 2009, 01:57 PM

Yeah, really.

I'll be the first one to admit, I'm not particularly keen on MGM and its operations, but I'd like to know... how the heck does it even have the funding available for SGU right now? The more I read, the worse it sounds.

**globex** · 12 October 2009, 07:38 PM

Originally posted by Madwelshboy View Post

MGM holds on to 'Hobbit' rights

MGM has secured financing to move forward with its two-part adaptation of The Hobbit.

Recent reports surfaced claiming that the studio had been threatened with bankruptcy and needed a $170 million cash injection to continue operating through to the end of the year.

According to The Hollywood Reporter, the cash-strapped studio has entered into a forbearance agreement with its lender group. Under the terms of the deal, MGM will forego interested payments - due for September 30, October 31, and November 30, 2009 - on its $3.5 billion debt.

The first interest payment will be made on December 15, allowing MGM to free up funds to continue with its production slate.

http://www.digitalspy.co.uk/movies/a...it-rights.html

How can a company as old as MGM be in so much debt

3.5 billion dollars? Seriously, what the hell have they been buying? This is really worrying signs because they are hoping the hobbit is a success and the movie doesnt come out till 2011. My guess is that this is one of the reason for the increase number of ads on the SyFy channel during Stargate Universe. My guess is that stargate movies are going to be put on hold until the hobbit comes out

**prion** · 13 October 2009, 04:16 AM

Originally posted by globex View Post

How can a company as old as MGM be in so much debt

3.5 billion dollars? Seriously, what the hell have they been buying? This is really worrying signs because they are hoping the hobbit is a success and the movie doesnt come out till 2011. My guess is that this is one of the reason for the increase number of ads on the SyFy channel during Stargate Universe. My guess is that stargate movies are going to be put on hold until the hobbit comes out

It doens't surprise me. All you need is fiscal mismanagement, thinking the sun's always going to shine and not prepping for that rainy day... I'm hoping the SG movies come out before O'Neill needs a walker

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