The Golden Lion’s long journey of financial instability appears to be coming to an end. MGM announced today that its board has approved a plan that will name Gary Barber and Roger Birnbaum the Co-Chairman and Chief Executive Officer of MGM following the company’s emergence from Chapter 11. This reorganization will effectively merge Barber and Birnbaum’s Spyglass Entertainment with MGM. The company, which is about $4 billion in debt, will now approach its lenders about approving the new plan.
During this stage, other potential suitors such as Lionsgate and Warner Bros. cannot make counter bids unless the Spyglass plan is rejected by the lenders. Considering the current play finds numerous banks converting their debt into stock (which means they are thereby “betting” a company reorganized out of bankruptcy will give them more of a financial return then selling for a loss) this isn’t necessarily a done deal.
The Spyglass plan calls for the company to make about six films a year, but there have been rumblings Spyglass will cut the marketing and distribution departments and use another studio such as Paramount Pictures or 20th Century Fox to release their films. Considering Fox has a small upcoming slate and Paramount will lose its deal with Marvel Studios after 2012’s “The Avengers,” that seems a likely scenario.
According to the LA Times, studio chairman Mary Parent, who waged a valiant effort to save the company, and numerous other executives are expected to get severance packages if everything goes forward.
MGM’s relatively small television operations which include producing the “Stargate” franchise will likely remain unaffected.
For movie fans, it clearly means “The Hobbit” and a new James Bond film are much closer to coming to becoming greenlit. What will happen to films such as “Red Dawn” and “The Cabin in the Woods,” however, is unclear. Both have jumped on and off the release date schedule over the past year as the studio attempted to find a solution to its financial problems.