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March 07, 2006
MGM-En-Stein
Reading Ron Grover’s BusinessWeek piece on Monday, anticipating tomorrow’s MGM press conference announcing the “rebirth” under Harry Sloan, was a little misleading because of the mixture of Weinstein hype and MGM hype and just what MGM is offering to producers.
Apparently, what MGM has to offer right now is access to an output deal to Showtime pay cable that was established when the studio was still under Kerkorian. The Weinsteins and others are “buying into” the deal much the way that The Weinsteins as Miramax took full advantage of Disney overall deal with Blockbuster. (The vigor with which The Weinsteins used and abused that deal led to a lawsuit.)
More with be revealed at the press conference tomorrow, though there is no indication that The Dentists (Providence Equity Partners and Texas Pacific Partners) are investing enough added capital to finance significant production at this point. Further, there is no indication that MGM will gain any ownership in any of these “output” deals.
Essentially, they are trying to do what MGM did under Kerkorian in the last incarnation… to tread water until some sucker came along and bought the company and library at a profit to The Dentists. The lack of an infrastructure is a benefit to The Weinsteins, who don’t wave to fight a lot of red tape and bureaucracy as they try to maneuver the MGM situation to their best advantage. But the bottom line is still money and existing assets, like the Showtime pay cable deal that survived the sale of the company and potentially, ongoing membership in the MPAA.
But keep in mind that the realistic price for entry for a major studio these days is about $2 billion… at least $1 billion in cash. This is not to degrade Lionsgate’s business model. And it doesn’t mean that you can’t win an Oscar with less than a $100 million investment. But let’s not get too excited about the return of Leo The Lion until we are sure that its not just smoke, mirrors, and superglue.
Posted by poland at March 7, 2006 11:39 AM
Comments
2 billion dollars.
Even typing that I get the shakes.
Shows just how big the industry is.
Posted by: Charly Baltimore ![[TypeKey Profile Page]](http://www.mcnblogs.com/thehotblog/nav-commenters.gif)
at March 7, 2006 12:04 PM
I'm pretty savvy (at least I think do) and I have absolutely no idea who owns what in Hollywood anymore. Viacom buys Dreamworks but not the library. Sony buys MGM but really doesn't. It makes you thankful to know that Disney is owned by Disney. At least currently.
Posted by: Wrecktum at March 7, 2006 12:18 PM
There should be a section on the homepage detailing who owns what and what subsidiaries are owned by whom and so forth. Because it is confusing.
Posted by: Josh at March 7, 2006 12:42 PM
Dave, here's your scoop - Kerkorian/Yemenidijian are not fully out of the MGM picture. They're watching to see what new distribution pipelines take hold. And as I said when the deal went down -it was born out of a dual frustration - 1) dealing with Danjaq/EON was excrutiating because they were financially dependent on them and 2) the meddling clowns on the board who dicked with every in-house production on the slate. It was impossible for Alex to unload the holdovers, (Priscilla Presely,Darren Starr, etc), so they sold the whole boat.
Unless someone from left field, (Mark Cuban, John Malone...), gets in the middle, this will be a variation of Kirk's original MGM sale to Turner.
As for Bob and Harvey, you're pretty much right. They're trying to create traction.
Posted by: Martin S at March 7, 2006 05:43 PM
It's pretty simple...
1) Disney/ABC/Miramax/Dimension/Pixar/Touchstone/Walden (distribution)/ESPN + cable channels
2)FOX/Searchlight/FX/+ future fox sub-network
3)WB/New Line/CW/TNT/TBS/HBO
4)NBC/Universal/Focus Features/Bravo/Sci-Fi/+ cable channels
5)Viacom - CBS/Paramount/Dreamworks/New Speciality Unit/MTV/Nick/Spike/CW/Showtime/Marvel(distributor)
6)Sony/Columbia/Tri-Star/Sony Classics/MGM (distribution, library + Bond)/United Artists/Screen Gems
7) Weinsteins - solo
Posted by: Martin S at March 7, 2006 05:57 PM
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