MGM Deal Near - Hobbits, Bond, Cabin and Red Dawn All Saved?

MGM Deal Near – Hobbits, Bond, Cabin and Red Dawn All Saved?

Posted by August 10, 2010 Comment

If The Wall Street Journal have interpreted the tea leaves right, an MGM deal is looking imminent. After all of the earlier shenanigans with Lionsgate and Summit bids, it looks like Gary Barber and Roger Birnbaum’s Spyglass Entertainment are to be declared the lucky winners. Here’s the financialese:

Messrs. Barber and Birnbaum would run MGM as co-chief executives when the studio exits a streamlined bankruptcy later this year under the plan. A group of hedge funds that now control the company’s fate have identified the pair as their best choice for reversing the ailing studio’s fortunes.

Under the plan, Spyglass—which co-financed recent releases including Dinner for Schmucks, Get him to the Greek, Leap Year and Invictus— would merge parts of its film library with the MGM library. Spyglass would receive a 4% ownership stake in the reorganized MGM, the people said. Creditors would forgive all of MGM’s debt for the bulk of the restructured studio’s new equity, they said.

But what about The Hobbit and the next Bond, big, big movies that MGM have stuck in their pipe, just waiting to be flushed out with a tidal wave of dollars?

Once exiting bankruptcy, MGM would try to raise a new credit line of about $400 million to $500 million to finance new movies.

Try? I can’t imagine they’ll have too much trouble.

Anyway, that’s the best clue the article offers. More immediate, I expect, would be releases for completed assets like Red Dawn and Cabin in the Woods.

Steps. In the right direction.

(Last Updated August 10, 2010 4:18 pm )

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