July 14 (Bloomberg) — Lions Gate Entertainment Corp., the independent film and TV producer, has approached creditors of ailing Metro-Goldwyn-Mayer Inc. to help shape a plan to acquire the studio, two people with knowledge of the situation said. Lions Gate Vice Chairman Michael Burns has been meeting in New York with investors who hold some of MGM’s $3.7 billion debt, according to the people, who requested anonymity because the discussions are private. More..

TheOneRing.net has received rock-solid information from an absolutely reliable source that the MGM financial situation is indeed what is behind the delays of the start of “The Hobbit.”

The venerable film studio behind James Bond and about 4,000 other titles is reported to be in about $3.7 billion in debt but holds the distribution rights for two “Hobbit” films that are under contract to be made by Warners Bros. The two studios have an agreement in place to produce and distribute the film but financial difficulties for MGM, including the potential sale of the studio and its holdings, including rights to the films based on the book by J.R.R. Tolkien, has delayed the films.

The source inside the production has told TheOneRing.net that all of the wrangling with MGM is indeed a significant part of possibly pushing the films back.

“At this stage we are all working and hoping for the best case scenario. Without a doubt, the MGM situation carries great importance.” Continue reading “Source says the MGM situation of ‘great importance’ to two potential ‘Hobbit’ films”

Time Warner Inc. might offer as much as $1.5 billion dollars for MGM, according to Bloomberg News. What do you get for that? Well, a 4,100-title library, the James Bond franchise, the Pink Panther franchise, part of the upcoming Hobbit movie, some television channels, and the rights to the show Stargate. More..

With a dearth of second-round activity in MGM’s search for a buyer, there is increasing likelihood that the studio will undergo a bankruptcy reorganization. Six suitors are conducting additional due diligence, which includes management presentations of detailed financial information about the Century City studio. But a deadline on second-round bids hasn’t been set following receipt last month of a dozen nonbinding offers in an initial round of bidding best described as underwhelming.

MGM consultant Moelis & Co. invited just half of those making first-round offers to participate in the next phase of the process, including Time Warner, Lionsgate and Access Industries, with Qualia Capital still circling but not actively involved. More..

MGM LogoThe possible sale of MGM — one of Hollywood’s longest-running dramas — will come into focus in the next few weeks when the first bids are expected to be submitted. The Lion, which put itself up for sale Nov. 13, has received several non-disclosure agreements back from potential bidders, a source close to the process indicated. It sent out over 20 NDAs last month out as a prelude to bidders seeing MGM’s internal books.

It’s not a given that MGM will be sold. The beleaguered studio has left open the door to continue operating as a standalone entity or forming some kind of strategic partnership if MGM’s 140 debtholders agree to do so, possibly through a prepackaged bankruptcy. The bondholders have agreed to hold off receiving interest payments until Jan. 31 in order to enable management to find out the actual value of the assets and whether it should proceed with a formal auction. More..

MGM LogoMGM may be the best known logo in the entertainment business, but the company seems headed for another possible garage sale. Several sources say they expect that MGM will essentially be auctioned off within the next few weeks. This would mean that a major, such as Time Warner, could buy the MGM-UA library while another entity might acquire the logo, and yet another deal could be made for United Artists. Sources speculated that Kirk Kerkorian, who has already bought and sold MGM twice, might buy the logo once again.

Last summer Harry Sloan was bounced as MGM’s CEO and Stephen Cooper, a specialist in restructuring companies (Krispy Kreme was one of his projects) started meeting with bankers with the aim of restructuring some $3.7 billion in debt. There was speculation that the combined assets of MGM may now yield as little as $1.5 billion in the present market. More..