MGM's financial woes have continually spiraled from bad to worse for the better part of a year and in light of these setbacks, the future of tentpole films like The Hobbit and Bond 23 were called into question. Instead of financing these high profile projects, MGM was forced to put the money towards their $4 billion debt.
Since late June, Spyglass Entertainment CEOs Gary Barber and Roger Birnbaum have been discussing a reorganization plan with MGM that would begin with the studio filing for a prepackaged Chapter 11 Bankruptcy. The court process would last around 30 days and then Barber and Birnbaum would take the reigns as the new owners of MGM.
According to Deadline, these events have been set in motion and MGM has begun taking the important first steps towards reinventing itself. Barber and Birnbaum's plan still has to be approved by a hundred or so creditors and would see the legendary studio minimized into a production company worth around $1.9 billion ($3 billion less than MGM's price tag back in 2005). Creditors would receive 95% of the studio's equity after it emerges from bankruptcy.
They have until October 22nd to vote on the plan, but with MGM's largest creditors already voicing their support, there doesn't seem to be any reason to believe it won't be approved.
Spyglass and two of its subsidiaries would merge into MGM and control the remaining 5% of the company. Spyglass would also contribute fifteen of its titles (including The Sixth Sense, Bruce Almighty, and Seabiscuit) to MGM's catalog of nearly 4,000 films.
But what does this arrangement mean for The Hobbit and Bond 23? Obviously those films are a high priority for MGM and a big part of helping them get back on their feet. After a string of box office disappointments, there's no way they're going to give up on two of their biggest brands.
So while it's now a matter of when and not if we'll see them made, there probably won't be any sort of formal announcement on either project until December at the very earliest. While this certainly wasn't the only road block facing The Hobbit, it was definitely the largest. Hopefully this is the first of many breaks Peter Jackson's seemingly cursed adaptation is afforded.
As for Bond, Daniel Craig and director Sam Mendes indicated they would likely return once MGM was back on track and I hope that's still the case. I'm dying to see what a Mendes directed/Peter Morgan scripted Bond film looks like.
The new MGM would aim for six major theatrical releases a year and also place a renewed interest in cable television – both scripted and reality programming. Interestingly, this strategy includes plans to turn several existing MGM films into TV shows. RoboCop, The Silence of the Lambs, and Dances with Wolves are all specifically mentioned.
Spyglass has an proven track record in Hollywood having co-financed hits like Star Trek, Wanted, Four Christmases, and G.I. Joe: The Rise of Cobra. So while MGM isn't in the clear just yet, they at least appear to be in good hands with some light at the end of the tunnel.