Faced with $3.7 billion in debt due in July 2012, MGM will pay $250 million in interest alone by April 2010. Just think if that money could be spent on actual film production. Shame on Harry Sloan who took over the moribund studio in 2004 after Sony and Comcast and Providence Equity Partners and TPG Capital paid roughly $5 billion in debt and equity to acquire then publicly traded MGM from its majority owner Kirk Kerkorian. But he waited, and waited, and waited, until it was too late and the credit crisis had begun, to put MGM on firm financial footing. But I hear his production boss Mary Parent is helping to make that happen now after nagging everyone to get ahead of this coming 2012 crisis with the intent of freeing up the company from some of this long-term debt to allow additional capital to finance more productions for her. The good news is that MGM (a private company so, frankly, it can claim anything it wants to without fear of the SEC) isn't going out of business right this minute. Not with a library that throws off half a billion dollars annually.
In fact, the studio is making movies (see below) while reporting today that it made its numbers for last year and are current on its debt payments. I'd love to believe this. Even more, I'm relieved the studio is coming clean about its problems after I'd be hearing for the past month that MGM debtholders and equity stakeholders have been fighting to the point where both sides are "on a war footing". That's been exacerbated by the coming audit this summer to identify ongoing projects, etc. The fear is, if the auditors were to represent that the studio isn't a going concern, that would bring on a battle royale. And I'd also heard that UA's Merrill Lynch money was "hanging by a thread".
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http://www.deadlinehollywooddaily.com/
In fact, the studio is making movies (see below) while reporting today that it made its numbers for last year and are current on its debt payments. I'd love to believe this. Even more, I'm relieved the studio is coming clean about its problems after I'd be hearing for the past month that MGM debtholders and equity stakeholders have been fighting to the point where both sides are "on a war footing". That's been exacerbated by the coming audit this summer to identify ongoing projects, etc. The fear is, if the auditors were to represent that the studio isn't a going concern, that would bring on a battle royale. And I'd also heard that UA's Merrill Lynch money was "hanging by a thread".
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http://www.deadlinehollywooddaily.com/
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