I wish I could handle my debt the way MGM does. The studio has 4 BILLION in owed dollars, and they’re trying to get a sixth postponement of its debt and interest payments (the interest is slaughtering them). The Hollywood Reporter says they’ll likely get it, and it’ll buy them a couple more weeks in which to try and figure out a restructuring plan as well as maybe find a new CEO who can get them out of this mess.
But the trade also says that some are trying to get MGM to sell off their share of The Hobbit rights to Warner Bros. This would be an attempt to raise some short term funds, but I wonder if it makes bigger picture sense. If MGM thinks they can weather this tsunami of debt, wouldn’t it make more sense to hang on to The Hobbit so that they could profit off of it? MGM already turned down a buyout bid from Warner Bros.
It’ll be interesting to see what happens; if the sale of the rights occurs, The Hobbit could begin shooting in January. It all depends on what MGM decides is in its best interest.
7 comments
So… no news then. Second verse same as the first.
MGM will not survive this, it will eventually collapse and it's properties will be snapped up. The bigger economic picture has to be taken into account. Banks get bailouts, Hollywood studios get stripped.
Whoever is casting for "The Hobbit", please give me a role, I would live in a tent for 6 months without pay to be in this film.
John D Sayles
Australia
We do have houses in NZ John :), and it aint that far away:)
Any money MGM could make on the Hobbit would be sucked up by those very same interest payments. It's probably only the perceived future value of that property that's keeping them from being shut down instantly.
I hate to say it, but Disney should buy MGM. Problem solved.
Question: What happened to Tom Cruise's involvement in all this? Wasn't he heading up MGM with Wagner? Are they the ones at the table during these negotiations?
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