THR is reporting that MGM is still in a financial quagmire. We’ve been reporting on the studio’s financial troubles for awhile now and last we heard, they were officially looking for buyers to come in an act as “strategic partners,” essentially allowing MGM to continue operating (albeit under new management).
The properties counted among the studio’s assets that we cared about here at Screen Rant were The James Bond franchise and Peter Jackson and Guillermo del Toro’s adaptation of The Hobbit. Last we heard, the former was “safe” and as far as the latter, Warner Bros. had stepped in to help shoulder the cost of production to make sure the film got started on time (and no doubt to snag a little of that Hobbit money).
However, reports are that the first rounds of buyer bids didn’t go so well. As in: nobody wants to fork up the reported $2.2. billion MGM would need to put a serious dent in the $3.7 billion clams they owe to their lenders.
Moelis and Co., the consultant company helping MGM steer through these troubled waters, invited only half of the initial round of potential buyers back for the second round of bidding. Potential buyers include Time Warner and Lionsgate (the latter is also currently making a grab for the Terminator franchise). This shrinking pool of buyers (and no doubt the underwhelming bids being made) are reportedly beginning to make MGM’s lenders very unsettled. “I don’t think there is a clear consensus on what the lenders will accept,” said a source close to the lenders’ camp.
If the bidding doesn’t go well, MGM will have to opt for debt restructuring, or the current lenders (there are more than 140) would become the new owners of the studio, with the current owners being squeezed out of their stakes in the company.
Some analysts are predicting MGM could ultimately sell for around $1.7 billion.
What do we need to know, as lovers of James Bond and The Hobbit? Only that we need to be rooting for whatever option keeps those two franchises running smooth. Although, I feel like with The Hobbit Warner Bros. (and/or whatever studio interested) will be there in a second with a nice big check and a smile if the production were to go off-track. Of course, the promise of controlling stake in the franchise would come with that kind gesture, no doubt. That Hobbit money is just too good to pass up.
We’ll keep you updated as more news of MGM’s struggle comes to light.