Metro-Goldwyn-Mayer, the company behind Hollywood classics such as The Wizard of Oz and Gone with the Wind, has emerged from bankruptcy, bringing to an end a turbulent period that saw the legendary studio come close to being broken up and sold.
The company, which also owns the James Bond series, has left bankruptcy with $500m of new financing arranged by JPMorgan, and a new management team. Creditors, who were owed some $4bn by MGM, now own the studio.
Emerging from bankruptcy increases the chances of a new James Bond film being made, although it is likely the company will need to raise more funds to finance the movie.
Production of the latest Bond film to star Daniel Craig had been suspended indefinitely by the Broccoli family, which owns the rights to Bond with MGM, because of the uncertainty surrounding the studio.
Gary Barber and Roger Birnbaum, two former executives with Spyglass Entertainment, the company behind recent films including Get Him to the Greek and Dinner for Schmucks, have been appointed co-chairmen and co-chief executives of MGM.
“MGM is emerging from one of the most challenging periods of its storied history,” they said in a statement. “Beginning today, MGM is a stronger, more competitive company, with a solid financial foundation and a bright future.”
MGM’s troubles began with the highly leveraged $5bn purchase of the studio in 2004 by a consortium made up of Sony, TPG, Providence Equity Partners and Comcast.
The deal loaded the studio with debt just as the DVD market went into sharp decline. When the credit crunch took hold in 2007, the group found itself unable to raise money to finance new movies, which would have helped it sell its older library titles.
The new management team faces an uphill battle to revive MGM post-bankruptcy. Its television and film sales operations have stagnated for the past 12 months when creditors tried – and failed – to sell the studio.
Mr Birnbaum and Mr Barber are also likely to face pressure from Carl Icahn, the activist investor who holds as much as 20 per cent of MGM shares. He is keen to merge the company with Lions Gate Entertainment, the company behind the Mad Men television series.
The company, which also owns the James Bond series, has left bankruptcy with $500m of new financing arranged by JPMorgan, and a new management team. Creditors, who were owed some $4bn by MGM, now own the studio.
Emerging from bankruptcy increases the chances of a new James Bond film being made, although it is likely the company will need to raise more funds to finance the movie.
Production of the latest Bond film to star Daniel Craig had been suspended indefinitely by the Broccoli family, which owns the rights to Bond with MGM, because of the uncertainty surrounding the studio.
Gary Barber and Roger Birnbaum, two former executives with Spyglass Entertainment, the company behind recent films including Get Him to the Greek and Dinner for Schmucks, have been appointed co-chairmen and co-chief executives of MGM.
“MGM is emerging from one of the most challenging periods of its storied history,” they said in a statement. “Beginning today, MGM is a stronger, more competitive company, with a solid financial foundation and a bright future.”
MGM’s troubles began with the highly leveraged $5bn purchase of the studio in 2004 by a consortium made up of Sony, TPG, Providence Equity Partners and Comcast.
The deal loaded the studio with debt just as the DVD market went into sharp decline. When the credit crunch took hold in 2007, the group found itself unable to raise money to finance new movies, which would have helped it sell its older library titles.
The new management team faces an uphill battle to revive MGM post-bankruptcy. Its television and film sales operations have stagnated for the past 12 months when creditors tried – and failed – to sell the studio.
Mr Birnbaum and Mr Barber are also likely to face pressure from Carl Icahn, the activist investor who holds as much as 20 per cent of MGM shares. He is keen to merge the company with Lions Gate Entertainment, the company behind the Mad Men television series.
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