Metro-Goldwyn-Mayer
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"MGM" redirects here. For other uses, see MGM (disambiguation).
 | |
| Type | Private[1] |
|---|---|
| Industry | Motion pictures |
| Founded | April 16, 1924[2] |
| Headquarters | Century City, Los Angeles, California, United States |
| Key people | Harry Sloan, Chairman[3] Bedi A. Singh, & Stephen F. Cooper, Office of CEO[3] |
| Products | Motion pictures Television programs |
| Owner(s) | Sony Corporation of America Comcast Providence Equity Partners TPG Capital, L.P. DLJ Merchant Banking Partners Quadrangle Group[4] |
| Employees | 400 (as of 2006)[5] |
| Parent | MGM Holdings, Inc. |
| Website | http://www.mgm.com |
 | This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (July 2010) |
Contents[show] |
[edit] Overview
The studio's official motto, "Ars Gratia Artis", is a Latin phrase meaning "Art for art's sake".[10][11][12] It was chosen by Howard Dietz, the studio's chief publicist, in 1924.[12][13][14] The studio's logo is a roaring lion surrounded by a ring of film inscribed with the studio's motto. The logo, which features "Leo the Lion", was created by Dietz in 1916 for Goldwyn Pictures and updated in 1924 for MGM's use.[12][15][16] Dietz based the logo on his alma mater's mascot—the Columbia University lion.[12][14][17] Loew regarded its use for the consolidated studio as particularly appropriate, since "Loewe" is German for "lion." Originally silent, the sound of Leo the Lion's roar was added to films for the first time in August 1928.[11] The studio's informal motto is "more stars than there are in heaven", a reference to the large number of A-list movie stars under contract to the company in the 1930s.[16][18] This second motto was also coined by Deitz,[19] and was probably first used in 1932.[20]From the end of the silent film era through World War II, Metro-Goldwyn-Mayer was the dominant motion picture studio in Hollywood.[21] It responded slowly to the changing legal, economic, and demographic nature of the motion picture industry during the 1950s and 1960s,[22][23][24] and although at times its films did well at the box office the studio lost significant amounts of money throughout the 1960s.[23][24] Edgar Bronfman, Sr. purchased a controlling interest in MGM in 1966 (and was briefly chairman of the board in 1969),[25] and in 1967 Time Inc. became the company's second-largest shareholder.[26] In 1969, Kirk Kerkorian purchased 40 percent of MGM from Bronfman and Time, Inc.,[27] slashed staff and production costs, forced the studio to produce low-budget fare, and then shut down production "permanently" in 1973.[24] The studio continued to distribute films under its name, however, and resumed production of its own motion pictures in 1980.[24][28]
MGM attempted to rebuild its production capacity in 1981 by purchasing United Artists (along with its lucrative James Bond film franchise).[29] It also incurred significant amounts of debt in order to increase production.[30] The studio took on additional debt as a series of owners took charge in the 1980s and early 1990s. On August 5, 1986, Ted Turner's Turner Broadcasting System purchased MGM in a cash-stock deal for $1.5 billion.[28][31] Turner immediately sold MGM's United Artists subsidiary back to Kerkorian.[28][31] But unable to find financing for the rest of the deal, Turner sold MGM's film and distribution business back to Kerkorian just 74 days after the original purchase was made.[28][31][32] The MGM lot and lab facilities were sold to Lorimar-Telepictures.[32] Turner kept the pre-1986 library of MGM films, along with pre-1950 Warner Bros. and RKO Pictures films which MGM had previously purchased.[32] The series of deals left MGM even more heavily in debt.[28] In 1989, Australian-based Qintex attempted to buy MGM from Kerkorian, but the deal collapsed.[33] MGM was bought by Pathé Communications (led by Italian publishing magnate Giancarlo Parretti) in 1990, but Parretti lost control of Pathé and defaulted on the loans used to purchase the studio.[24][28] French banking conglomerate Crédit Lyonnais, the studio's major creditor, then took control of MGM.[24][28][34] Even more deeply in debt, MGM was purchased by Australia's Seven Network in 1996.[35]
MGM purchased Metromedia's film subsidiaries (Orion Pictures, The Samuel Goldwyn Company, and the Motion Picture Corporation of America) for $573 million in 1997,[36] and Kerkorian bought out Seven Network the following year.[37] MGM used debt to acquire Polygram Filmed Entertainment's 1,300-title library from Seagram in 1999 for $250 million, and obtained the broadcast rights to more than 800 of its films previously licensed to Turner Broadcasting.[38] MGM then purchased 20 percent of Cablevision Systems for $825 million in 2001.[39] MGM attempted to take over Universal Studios in 2003 but failed, and was forced to sell several of its cable channel investments (taking a $75 million loss on the deal).[40]
The debt load from these business deals negatively affected MGM's ability to survive as an independent motion picture studio. After a three-way bidding war which involved Time Warner (successor to Time, Inc. and current parent of Turner Broadcasting) and General Electric, MGM was acquired on September 23, 2004, by a partnership led by Sony Corporation of America, Comcast, Texas Pacific Group (now TPG Capital, L.P.), Providence Equity Partners, and other investors.[41]
MGM Resorts International, a Las Vegas-based hotel and casino company listed on the New York Stock Exchange under the symbol "MGM", is not currently affiliated with Metro-Goldwyn-Mayer.
[edit] History
[edit] Foundation
In 1924, movie theater magnate Marcus Loew had a problem. He had bought Metro Pictures Corporation (founded in 1916) and Goldwyn Pictures (founded in 1917) to provide a steady supply of films for his large theater chain, Loew's Theatres. However, these purchases created a need for someone to oversee his new Hollywood operations, since longtime assistant Nicholas Schenck was needed in New York to oversee the theaters. Loew addressed the situation by buying Louis B. Mayer Pictures on April 16, 1924. Because of his decade-long success as a producer, Mayer was made a vice-president of Loew's and head of studio operations in California, with Harry Rapf and Irving Thalberg as heads of production. For decades MGM was listed on movie title cards as "Controlled by Loew's, Inc."Originally, the new studio's films were presented in the following manner: "Louis B. Mayer presents a Metro-Goldwyn picture", but Mayer soon added his name to the studio with Loew's blessing. Though Loew's Metro was the dominant partner, the new studio inherited Goldwyn's studios in Culver City, California, the former Goldwyn mascot Leo the Lion (which replaced Metro's parrot symbol), and the Goldwyn corporate motto Ars Gratia Artis ("Art for Art's Sake").
Also inherited from Goldwyn was a runaway production, Ben–Hur, which had been filming in Rome for months at great cost. Mayer scrapped most of what had been shot and relocated production to Culver City. Though Ben–Hur was the most costly film made up to its time, it became MGM's first great public-relations triumph, establishing an image for the company that persisted for years. Also in 1925, with the success of both The Big Parade and Ben–Hur, MGM surpassed Universal Studios as the largest studio in Hollywood, a distinction it would maintain for over 30 years.
Marcus Loew died in 1927, and control of Loew's passed to Nicholas Schenck. In 1929, William Fox of Fox Film Corporation bought the Loew family's holdings with Schenck's assent. Mayer and Thalberg disagreed with the decision. Mayer used political connections to persuade the Justice Department to delay final approval of the deal on antitrust grounds. During this time, in the summer of 1929, Fox was badly hurt in an automobile accident. By the time he recovered, the stock market crash in the fall of 1929 had nearly wiped Fox out and ended any chance of the Loew's merger going through. Schenck and Mayer had never gotten along (Mayer reportedly referred to his boss as "Mr. Skunk") ,[42] and the abortive Fox merger increased the animosity between the two men.
[edit] MGM's golden age
From the outset, MGM tapped into the audience's need for glamour and sophistication. Having inherited few big names from their predecessor companies, Mayer and Thalberg began at once to create and publicize a host of new stars, among them Greta Garbo, John Gilbert, William Haines, Norma Shearer, and Joan Crawford. Established names like Lon Chaney, William Powell, Buster Keaton, and Wallace Beery were hired from other studios. They also hired top directors such as King Vidor, Clarence Brown, Erich von Stroheim, Tod Browning, and Victor Seastrom. The arrival of talking pictures in 1928–29 gave opportunities to other new stars, many of whom would carry MGM through the 1930s: Clark Gable, Jean Harlow, Robert Montgomery, Myrna Loy, Jeanette MacDonald, and Nelson Eddy among them.MGM was one of the first studios to experiment with filming in Technicolor. Using the two-color Technicolor process then available, MGM filmed portions of The Uninvited Guest (1923), The Big Parade (1925), and Ben–Hur (1925), among others, in the process. In 1928, MGM released The Viking, the first complete Technicolor feature with sound (including a synchronized score and sound effects but no spoken dialogue). MGM's first all-color, "all-talking" sound feature with dialogue was the 1930 musical The Rogue Song. In 1934 MGM included a sequence made in Technicolor's superior new three-color process, a musical number in the otherwise black-and-white The Cat and the Fiddle. The studio then produced a number of three-color short subjects including 1935's musical La Fiesta de Santa Barbara, however MGM waited until 1938 to film a complete feature in the process, Sweethearts with Jeanette MacDonald and Nelson Eddy, the earlier of the popular singing team's two films in color.
From then on, MGM regularly produced several films a year in Technicolor, The Wizard of Oz and Northwest Passage being two of the most notable. MGM also released the enormously successful Technicolor film Gone with the Wind, starring Vivien Leigh as Scarlett O'Hara and Clark Gable as Rhett Butler. (Although Gone With the Wind was produced by Selznick International Pictures, it was released by MGM as part of a deal for producer David O. Selznick to obtain the services of Clark Gable. However, the film, being a Selznick International production, begins with that company's logo, rather than the usual MGM roaring lion.)
In addition to a large short subjects program of its own, MGM also released the shorts and features produced by Hal Roach Studios, including comedy shorts starring Laurel and Hardy, Our Gang, and Charley Chase. MGM's distribution deal with Roach lasted from 1927 to 1938, and MGM benefited in particular from the success of the popular Laurel and Hardy films. In 1938, MGM purchased the rights to Our Gang and moved the production in-house,[43] continuing production of the successful series of children's comedies until 1944. From 1929 to 1931, MGM produced a series of comedy shorts called All Barkie Dogville Comedies, in which trained dogs were dressed up to parody contemporary films and were voiced by actors. One of the shorts, The Dogway Melody (1930), spoofed MGM's hit 1929 musical Broadway Melody.[44]
MGM produced fifty pictures a year. Loew's theaters were mostly located in New York and the Northeastern United States (although Gone With the Wind had its world premiere at the Loew's Grand in Atlanta, Georgia), so MGM made films that were sophisticated and polished to cater to an urban audience. As the Great Depression deepened, MGM could make a claim its rivals could not: it never lost money, although it did have an occasional disaster like Parnell (1937), Clark Gable's biggest flop. It was the only Hollywood studio that continued to pay dividends during the 1930s.
MGM stars dominated the box office in the '30s, and the studio was credited for inventing the Hollywood star system as well. MGM contracted with The American Musical Academy of Arts Association (now the International Academy of Music Arts and Sciences) to handle all of their press and artist development. The AMAAA's main function was to develop the budding stars and to make them appealing to the public.[45] Stars like Norma Shearer, Joan Crawford, and Greta Garbo all reigned as not only the top three figures at the studio, but in Hollywood itself. Garbo started losing her American audience after Queen Christina (1933), as a contract dispute kept her out of Hollywood for two years,[46] and other MGM sex symbol actress Jean Harlow now had a big break and became one of MGM's most admired stars as well;[47] despite Jean Harlow's gain, Garbo still was a big star for MGM after she returned from her absence.[46] Shearer was still a top money maker despite screen appearances becoming scarce, and Joan Crawford continued her box office power up until 1937. MGM would also receive a boost through the man who would become the "King of Hollywood", Clark Gable;[47] Gable's career took off to new heights after he won an Oscar for the 1934 Columbia film It Happened One Night.[48] By 1943, all three had left the studio. Joan Crawford moved to Warner Bros. where her career took a dramatic upturn for the better; Shearer and Garbo never made another film after leaving MGM.
Mayer and Irving Thalberg's relationship began warmly but became estranged; Thalberg preferred literary works to the crowd-pleasers Mayer wanted. Thalberg, always physically frail, was removed as head of production in 1932. Mayer encouraged other staff producers, among them his son-in-law David O. Selznick, but no one seemed to have the sure touch of Thalberg. As Thalberg fell increasingly ill in 1936, Louis Mayer could now serve as his temporary replacement. Rumors flew that Thalberg was leaving to set up his own independent company; his early death in 1936, at age thirty-seven, cost MGM dearly.
As a result of Thalberg's death, Mayer became head of production as well as studio chief, becoming the first million-dollar executive in American history. The company remained profitable, although a change toward "series" pictures (Andy Hardy, Maisie, the Thin Man pictures, et al.) is seen by some as evidence of Mayer's restored influence. Also playing a huge role was Ida Koverman, Mayer's "right hand woman".
Increasingly, before and during World War II, Mayer came to rely on his "College of Cardinals"—senior producers who controlled the studio's output. This management-by-committee may explain why MGM seemed to lose its momentum, developing few new stars and relying on the safety of sequels and bland material. (Dorothy Parker memorably referred to it as "Metro-Goldwyn-Merde."[49]) Production values remained high, and even "B" pictures carried a polish and gloss that made them expensive to mount, and artificial in tone. After 1940, production was cut from fifty pictures a year to a more manageable twenty-five features per year. It was during this time that MGM released very successful musicals with players such as Judy Garland, Fred Astaire, Gene Kelly, and Frank Sinatra, to name just a few.
As audiences drifted away after the war, MGM found it difficult to attract them. While other studios backed away from the popular musicals of the war years, MGM increased its output to as many as five or six each year, roughly one-quarter of its annual output. Such pictures were expensive to produce, requiring a full staff of songwriters, arrangers, musicians, dancers, and technical support, and releasing so many each year affected the company's finances. By the late forties, as MGM's profit margins decreased, word came from Schenck in New York: find "a new Thalberg" who could improve quality while paring costs. Mayer thought he had found this savior in Dore Schary, a writer and producer who had had a couple of successful years running RKO.
Mayer's taste for wholesomeness and "beautiful" movies conflicted with Schary's preference for gritty message pictures. In August 1951, after a period of friendly antagonism with Schary, Mayer was fired. One report says that Mayer called Schenck and New York with an ultimatum—"It's him or me". Mayer tried to stage a boardroom coup to oust his old nemesis, but failed.
Perhaps because of Mayer's leaving (although this has never been confirmed), the credit Metro-Goldwyn-Mayer presents does not appear on any MGM film made between 1950 and 1957, the year of Louis B. Mayer's death. In films made during those years, the credits segue straight from the Leo the Lion logo to the title of the film, or, in the case of above-the-title billing, the names of the stars and then the film's title. Beginning in 1957, the Metro-Goldwyn-Mayer presents credit was reinstated.
Gradually cutting loose expensive contract actors (perhaps most famously, Judy Garland in 1950), Schary managed to keep the studio running much as it had through the early 1950s though his sensibilities for hard-edged, message movies would never bear much fruit. He would be gone by 1956. The only bright spot was the MGM musicals. Under the aegis of producer Arthur Freed, who was operating what amounted to an independent unit within the studio, MGM produced some well-regarded musicals that would be later acknowledged as classics, among them An American in Paris, Singin' in the Rain and The Band Wagon. However, it was a losing fight, as the mass audience preferred to stay home and watch television. An American in Paris and Singin' in the Rain, as well as the 1951 Technicolor Show Boat (all begun while Mayer was still in power), were large box office successes; The Band Wagon was a modest success. But the 1954 Brigadoon, and 1955's Kismet, both filmed in Cinemascope, were flops. On the other hand, Seven Brides for Seven Brothers, also made in Cinemascope, and released in 1954, became not only a huge critical success but a box office hit.
In 1954, as a settlement of the government's restraint-of-trade action, United States v. Paramount Pictures, Inc. 334 US 131 (1948), Loews, Inc. gave up control of MGM. It would take another five years before the interlocking arrangements were completely undone, by which time both Loews and MGM were sinking.
[edit] MGM cartoon shorts
Main article: Metro-Goldwyn-Mayer cartoon studio
In animation, MGM purchased the rights in 1930 to distribute a series of cartoons that starred a character named Flip the Frog, produced by Ub Iwerks. The first cartoon in this series (entitled Fiddlesticks) was the first sound cartoon to be produced in two-color Technicolor. In 1933, Ub Iwerks cancelled the unsuccessful Flip the Frog series and MGM began to distribute its second series of cartoons, starring a character named Willie Whopper, that was also produced by Ub Iwerks.In 1934, after Iwerks' distribution contract expired, contracted with animation producers/directors Hugh Harman and Rudolph Ising to produce a new series of color cartoons. Harman and Ising came to MGM after breaking ties with Leon Schlesinger and Warner Bros., and brought with them their popular Looney Tunes character, Bosko. These were known as Happy Harmonies and in many ways resembled the Looney Tunes' sister series, Merrie Melodies. The Happy Harmonies regularly ran over budget, and MGM dismissed Harman-Ising in 1937 to start its own animation studio.
After initial struggles with a poorly received series of Captain and the Kids cartoons, the studio re-hired Harman and Ising in 1939, and Ising created the studio's first successful animated character, Barney Bear. However, MGM's biggest cartoon stars would come in the form of the cat-and-mouse duo Tom and Jerry, created by William Hanna and Joseph Barbera in 1940. The Tom and Jerry cartoons won seven Academy Awards between 1943 and 1953. In 1941, Tex Avery, another Schlesinger alumnus, joined the animation department. It was Avery who gave the unit its image, with successes like Red Hot Riding Hood, Swing Shift Cinderella, and the Droopy series.
Avery left the studio in 1950 leaving Hanna and Barbera to focus on the popular Tom and Jerry and Droopy series. After 1955 all cartoons were filmed in wide screen Cinemascope until MGM closed its cartoon division in 1957.
[edit] The lion in winter
As the studio system faded in the late 1950s and 1960s, MGM's prestige faded with it. In 1957 (by coincidence, the year L.B. Mayer died) the studio lost money for the first time in its 34-year history. Cost overruns and the failure of the 1957 big-budget epic Raintree County prompted the studio to release Schary from his contract. Schary's reign at MGM had been marked with few bona-fide hits, but his departure (along with the retirement of Schenck in 1955) left a power vacuum that would prove difficult to fill. By 1960, MGM had released all of its contract players, with many either retiring or moving on to television.At the urging of Leonard Goldenson, longtime head of Paramount's theater chain who now ran ABC, MGM began to enter television production. MGM's first attempts at programming were cross-promotion of feature films (The MGM Parade), and based on successful film properties like The Thin Man. Several years later, MGM produced highly successful TV series, like The Man from U.N.C.L.E. and the sitcom version of The Courtship of Eddie's Father.
The year 1957 also marked the end of MGM's animation department, as the studio determined it could generate the same amount of revenue by reissuing older cartoons as it could by producing and releasing new ones.[50] William Hanna and Joseph Barbera, by then the heads of the MGM cartoon studio, took most of their unit and made their own company, Hanna-Barbera Productions, a successful producer of television animation.
In 1956, MGM sold the television rights for The Wizard of Oz to CBS, which scheduled it to be shown in November of that year. In a landmark event, Oz became the first theatrical film to be shown complete in one evening on prime time television over a major American commercial network. (Olivier's version of Hamlet was shown on prime time network TV a month later, but split in half over two weeks). Beginning in 1959, and lasting until 1991, telecasts of The Wizard of Oz became an annual tradition, drawing huge audiences in homes all over the U.S. and earning additional profits for the studio. The studio was all too happy to see Oz become, through television, one of the two or three most famous films MGM has ever made, and one of the few films that nearly everybody in the U.S. has seen at least once. Today The Wizard of Oz is regularly shown on the Turner-owned channels, no longer just once a year.
In 1958, MGM released what is generally considered their last great musical, Arthur Freed's Cinemascope color production of Gigi, starring Leslie Caron, Maurice Chevalier, and Louis Jourdan. It was adapted from the novel by Colette, and written by the team of Lerner and Loewe, who also wrote My Fair Lady and Camelot. Gigi was a box-office and critical success which won nine Academy Awards, including Best Picture. From it came several hit songs, including Thank Heaven For Little Girls, I Remember It Well, the Waltz at Maxim's, and the Oscar-winning title song. The film was the last MGM musical to win a Best Picture Oscar, an honor that had previously gone to The Broadway Melody (1929), The Great Ziegfeld (1936), and An American in Paris (1951). The very last musical film produced by the "Freed Unit" was an adaptation of the Broadway musical Bells Are Ringing (1960) with Judy Holliday and Dean Martin. However, MGM did release later musical films, including an adaptation of Meredith Willson's The Unsinkable Molly Brown (1964) with Debbie Reynolds and Harve Presnell.
In 1959, MGM enjoyed what is quite likely their greatest financial success of later years, with the release of its nearly four-hour Technicolor epic Ben–Hur, a remake of their 1925 silent film hit, based on the novel by General Lew Wallace. Starring Charlton Heston in the title role, the film was critically acclaimed, and won 11 Academy Awards, including Best Picture, a record that held until Titanic matched it in 1997.
In 1961, MGM resumed the release of new Tom and Jerry shorts, and production moved to Rembrandt Films in Czechoslovakia, under the supervision of Gene Deitch. Deitch's Tom and Jerry cartoons are very different in style to the original Hanna and Barbera style of animation. In 1963, the production of Tom and Jerry returned to Hollywood under Chuck Jones and his Sib Tower 12 Productions studio (later absorbed by MGM and renamed MGM Animation/Visual Arts). Jones' group also produced its own works, winning an Oscar for The Dot and the Line, as well as producing the classic television version of How the Grinch Stole Christmas! (with Theodor Geisel). Tom and Jerry folded in 1967, and the animation department continued with television specials and one feature film, The Phantom Tollbooth.
MGM fell into a habit in this period that would eventually sink the studio: an entire year's production schedule relied on the success of one big-budget epic each year. This policy began in 1959, when Ben–Hur was profitable enough to carry the studio through 1960. However, later attempts at big-budget epics failed, among them four films which, in addition to Ben–Hur, were also remakes—Cimarron (1960), King of Kings (1961), Four Horsemen of the Apocalypse (1961), and most notoriously, the 1962 Mutiny on the Bounty. The 1962 Cinerama film The Wonderful World of the Brothers Grimm, the first film in Cinerama to actually tell a story, was also a flop. But one other epic that was a success, however, was the MGM-Cinerama co-production How the West Was Won, with a huge all-star cast. King of Kings, while a commercial and critical flop at the time, has since come to be regarded as a film classic. In 1965 though, MGM released David Lean's immensely popular Doctor Zhivago,[51] only to back the same director's Ryan's Daughter which flopped badly in 1970.
As MGM sank (along with several other mainline studios), a series of studio heads came and went, along with a succession of corporate managers, all hoping to bring back the studio's glory days.
[edit] Kerkorian takes over and MGM downsized
In 1967, MGM was sold to the Canadian investor Edgar Bronfman, Sr., whose son Edgar, Jr. would later buy Universal Studios. Two years later, an increasingly unprofitable MGM was bought by Nevada millionaire Kirk Kerkorian. What appealed to Kerkorian was MGM's Culver City real estate, and the value of 45 years' worth of glamour associated with the name, which he attached to a Las Vegas hotel and casino. As for film-making, that part of the company was quickly and severely downsized under the supervision of James T. Aubrey, Jr. With changes in its business model including fewer pictures per year, more location shooting and more distribution of independent productions, MGM's operations were rationalized. Aubrey sold off MGM's accumulation of props, furnishings and historical memorabilia, including a pair of Dorothy's ruby slippers from The Wizard of Oz. Lot 3, 40 acres (160,000 m2) of back-lot property was sold off for real-estate development.Through the 1970s studio output slowed considerably—Aubrey preferred four or five medium-budget pictures each year, along with a smattering of low-budget fare. With the decline in output, Kerkorian closed MGM's sales and distribution offices in 1973 and outsourced those functions to United Artists. Kerkorian now distanced himself from the operations of the studio, focusing on his casino properties. Another portion of the back lot was sold in 1974. The last shooting done on the backlot was the introductory material for That's Entertainment! a retrospective documentary that became a surprise hit for the studio. The MGM Recording Studios were sold in 1975.
In 1979, Kerkorian declared that MGM was now primarily a hotel company, but he did commit to increased production and an expanded film library when he bought United Artists in 1981.
[edit] MGM/UA, Turner, and Parretti
The "Metro-Goldwyn-Mayer" lettering on the studio's logo was changed to reflect their acquisition of UA, now reading "MGM/UA Entertainment Co."—the new name for the company.In 1986, Ted Turner bought MGM/UA; the company was known as "MGM Entertainment Co." when Turner sold UA back to Kirk Kerkorian.[52][53] But due to concerns in the financial community over the debt-load of his companies, on October 17, 1986 he was forced to re-sell of MGM to Kerkorian for approximately $780 million USD ($480 million for United Artists and $300 million for the MGM logo) after only 74 days of ownership.
Turner retained the one MGM asset he really craved, the MGM film and television library (excepting most shows produced by UA itself and its predecessor Ziv Television Programs, with Gilligan's Island going to Turner). Kerkorian got United Artists and the rights to the MGM name and trademark. The venerable Culver City lot, home to MGM and its predecessor since 1918, was sold to Lorimar-Telepictures, a television production company. The lot has since become Sony Pictures Studios.
How much of MGM's back catalog Turner actually obtained was a point of conflict for a time; eventually it was determined that Turner owned all of the pre-May 1986 MGM library, as well as the pre-1950 Warner Bros. catalog,[54][55] the Popeye cartoons released by Paramount (both the pre-1950 WB library and Popeye cartoons were sold to Associated Artists Productions, which was later bought by United Artists), the entire RKO library, and a good share of United Artists's own back list.
Turner began broadcasting MGM films through his Turner Network Television, and caused a controversy when he began "colorizing" many black and white classics. After Kerkorian reclaimed MGM, the MGM/UA name continued to be utilized, but it changed its name to MGM/UA Communications Co., now using MGM and UA as separate brands.[56]
In 1990, the now disgraced Italian financier, Giancarlo Parretti, announced that he was about to buy MGM/UA. Although the French government had scuttled his bid to buy Pathé due to concerns about his past dealings, Parretti got backing from Crédit Lyonnais and took control of MGM/UA through a leveraged buyout. He then merged it with his Pathé Communications Group (formerly Cannon Group, a distributor that Parretti had renamed before his aborted bid for Pathé) to form MGM–Pathe Communications Co. The well-respected executive, Alan Ladd, Jr., a former President of MGM/UA, was brought on board as CEO of MGM in 1991. However the same year Parretti's ownership dissolved in a flurry of lawsuits and a default by Crédit Lyonnais, and Parretti faced securities fraud charges in the United States and Europe. On the verge of bankruptcy and failure, Crédit Lyonnais took full control of MGM–Pathé and converted its name back to Metro-Goldwyn-Mayer.
Despite a few commercial successes, such as Thelma and Louise, Crédit Lyonnais was unable to stem the tide of red ink during the mid-1990s; putting the studio up for sale, it found only one willing bidder: Kirk Kerkorian. Now the owner of MGM for the third time, Kerkorian at last conceded that a solid business plan was the studio's only hope. As a condition of taking over, Kerkorian had to fire Ladd and replace him with former Paramount executive Frank Mancuso Sr. By committing to more and better pictures, selling a portion of the studio to Australia's Seven Network, and installing a professional management team, Kerkorian was able to convince Wall Street that a revived MGM was worthy of a place on the stock market.
[edit] 1997–2001: MGM restructures
In April 1997, MGM bought Metromedia's film subsidiaries (Orion Pictures, The Samuel Goldwyn Company, and the Motion Picture Corporation of America) for US$573 million, substantially enlarging its library of films and television series and acquiring additional production capacity.[36] The deal closed in July of that year.[57] This catalog, along with the James Bond franchise, was considered to be MGM's primary asset.[58] In the same year, MGM's long-running cable television series, Stargate SG-1, first aired.[59]In 2000, MGM changed the way it distributed its products internationally. MGM had until that time distributed its films internationally through United International Pictures (UIP), a joint venture of MGM, Universal Pictures, Dreamworks Pictures and Paramount Pictures. UIP was accused by the European Union of being an illegal cartel,[60] and effective November 2000 MGM severed its ties with UIP and distributed films internationally through 20th Century Fox.[61]
[edit] Consortium ownership and financial troubles
Many of MGM's competitors started to make bids to purchase the studio, beginning with Time Warner. It was not unexpected that Time Warner would bid, since the largest shareholder in the company was Ted Turner. His Turner Entertainment group had risen to success in part through its ownership of the pre-May 1986 MGM library. After a short period of negotiation with MGM, Time Warner was unsuccessful. The leading bidder proved to be Sony Corporation of America, backed by Comcast and private equity firms Texas Pacific Group (now TPG Capital, L.P.), DLJ and Providence Equity Partners. Sony's primary goal was to ensure Blu-ray Disc support at MGM; cost synergies with Sony Pictures Entertainment were secondary. Time Warner made a counter-bid (which Ted Turner reportedly tried to block), but on September 13, 2004, Sony increased its bid of $11.25/share (roughly $4.7 billion) to $12/share ($5 billion), and Time Warner subsequently withdrew its bid of $11/share ($4.5 billion). MGM and Sony agreed on a purchase price of nearly $5 billion, of which about $2 billion was to pay off MGM debt [11] [12]. From 2005-2006, Columbia TriStar Motion Picture Group has domestically distributed films by MGM and UA.MGM announced that it would return as a theatrical distribution company. MGM negotiated and struck deals with The Weinstein Company, Lakeshore Entertainment, Bauer Martinez, and many other independent studios, and then announced its plans to release 14 feature films for 2006 and early 2007. MGM also hoped to increase the amount to over 20 by 2007. Lucky Number Slevin, released April 7, was the first film released under the new MGM era. Other recent films under the MGM/Weinstein deal include Clerks II and Bobby. Upon the MGM/Weinstein films' release on home video, however, full distribution rights revert to Weinstein (under Genius Products).
On May 31, 2006 MGM announced that it would transfer its home video output from Sony Pictures Home Entertainment to 20th Century Fox Home Entertainment (excepting co-productions with Columbia or TriStar, such as EON Productions' James Bond franchise where Sony is a majority partner).[62][63]
MGM also announced plans to restructure its worldwide television distribution operation.[64] In addition MGM signed a deal with New Line Television in which MGM would handle New Line's U.S. film and series television syndication packages. MGM served as New Line's barter sales rep in the television arena until 2008.[65]
On November 2, 2006, producer/actor Tom Cruise and his production partner, Paula Wagner, signed an agreement with MGM to run United Artists. Wagner will serve as United Artists' chief executive. Cruise will produce and star in films for UA and MGM will distribute the movies.
Over the next several years, MGM launched a number of initiatives in distribution and the use of new technology and media as well as joint ventures to promote and sell its products. In April 2007, it was announced that MGM movies would be able to be downloaded through Apple's iTunes service, with MGM bringing an estimated 100 of its existing movies to iTunes service, the California-based computer company revealed. The list of movies included the likes of modern features such as Rocky, Ronin, Mad Max and Dances with Wolves, along with more golden-era classics such as Lilies of the Field and The Great Train Robbery.[66] In October, the company launched MGM HD on DirecTV, offering a library of movies formatted in Hi Def. Also in 2007, MGM sold its distribution rights for countries outside of the United States to 20th Century Fox. MGM teamed up with Weigel Broadcasting to launch a new channel titled This TV on November 1, 2008.[67][68] On August 12, 2008, MGM teamed up with Comcast to launch a new video-on-demand network titled Impact.[69] On November 10, 2008, MGM announced that it will release full length films on YouTube.[70]
As of mid-2009, MGM had US$3.7 billion in debt, and interest payments alone totalled $250 million a year.[71][72][73] MGM earns approximately $500 million a year on income from its extensive film and television library, but the economic recession is reported to have reduced this income substantially.[74][75]
Whether MGM can avoid voluntary or involuntary bankrupty has been a topic of much discussion in the film industry. MGM must repay a US$250 million line of credit in April 2010, a US$1 billion loan in June 2011, and its remaining US$2.7 billion in loans in 2012.[74] In May 2009, MGM's auditor gave the company a clean bill of health, concluding it was still on track to meet its debt obligations.[72] At that time, the company was negotiating with its creditors to either extend the debt repayment deadlines or engage in a debt-for-equity swap.[72] Industry observers, however, have questioned whether MGM can avoid a Chapter 11 bankruptcy filing under any circumstances, and conclude that any failure to conclude the negotiations must trigger a filing.[76] MGM and its United Artists subsidiary now produce very few films each year, and it is widely believed that MGM's solvency will depend on the box office performance of these films (especially its upcoming 23rd James Bond film).[74][77] There is some indication that Relativity Media and its financial backer, Elliott Associates (a hedge fund based in New York), have been acquiring MGM debt in an attempt to force the company into involuntary bankruptcy.[71][78][79]
On August 17, 2009, MGM fired chief executive officer Harry E. Sloan and hired as its new CEO Stephen F. Cooper, a corporate executive who guided Enron through its post-2001 bankruptcy and oversaw the restructuring and growth of Krispy Kreme in 2005.[3][74] Expectations were that Cooper was hired to act quickly on MGM's debt problems.[3][74] On October 1, 2009, the studio's new leadership negotiated a forbearance agreement with its creditors under which interest payments due from September to November 2009 will not have to be paid until December 15, 2009.[80]
[edit] Attempted sale and bankruptcy protection
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On November 12, 2009, MGM announced it was "beginning a process to explore various strategic alternatives including operating as a standalone entity, forming strategic partnerships and evaluating a potential sale of the company."[82][83] Alternatives the company is exploring include sale of the company or merger with another media firm,[84] or an asset auction, which could include the sale of its 4,000-title film and television library, the company logo, rights to the James Bond franchise, and half-ownership in the two Hobbit films (part one now due for release in December 2012 and part two's release date currently undecided).[82] The studio also held out the possibility of gaining a large influx of cash from new investors, although industry analysts believed that alternative was unlikely to happen.[84] Some industry analysts said sale of the studio could net $1.5 billion to $3 billion.[84] Others pegged the value at between $2 billion to $2.5 billion.[85] Potential buyers include Time Warner (which already owns the pre-May 1986 MGM library, has enough cash reserves, and is co-producing the Hobbit films with MGM), Qualia Capital (a private equity fund led by Hollywood producer Amir Malin), 20th Century Fox (MGM's home entertainment distributor), and Lionsgate.[84][85]
MGM also announced that its creditors agreed to a forbearance on the company's debt payments originally until January 31, 2010,[82][83][84][85] but the forbearance was extended to March 31, 2010.[86]
As of early December 2009, 16 companies had expressed interest in purchasing all or parts of MGM, although only two had actually negotiated a confidentiality agreement that would allow them to examine MGM's financial statements.[81] The Hollywood Reporter said Warner Bros., 20th Century Fox, and Lionsgate were the leading suitors for the company.[81] Industry observers worried, however, that buyers might only bid on a few of MGM's assets such as the James Bond film franchise or The Hobbit film which would draw bids of less than $1 billion.[81] At least one industry trade publication said creditors would accept offers amounting to $2 billion for parts or all of the studio.[81] Even a bid or bids totalling $1.8 billion might be accepted, industry observers said, if the buyer agreed to "schmuck insurance" (the right to convert debt to equity, under certain conditions and time-frames).[81] On December 18, press reports said that News Corporation's 20th Century Fox film studio had been interested in purchasing MGM, but that News Corp. could not agree to the "restrictive" terms of MGM's nondisclosure agreement,[87] which (in part) do not permit potential buyers to speak with MGM's creditors.[88] The strict terms of the nondisclosure agreement also led two other potential buyers to refuse to participate, and several others were negotiating over the terms and unable to participate in the process.[89] The due diligence process was "going slowly" one trade publication reported, with only four of the potential 20 companies participating as of December 18.[88][89]
MGM originally set Friday, January 15, as the deadline to receive bids from the companies interested in acquiring the studio.[90][91][92] However, fewer bids than expected were made.[93] Reliance Entertainment, which has a joint venture with DreamWorks, joined the bidding on the deadline date.[94] News Corp. reportedly signed a nondisclosure agreement on or about January 15, and was considering a bid.[94] On January 17, the New York Times reported that bids had been received from Time Warner, Lionsgate, and a few smaller companies but that most of the offers were below the $2 billion minimum.[95] Some of the bids may have been below $1 billion, and nearly all the bids would require MGM to file for bankruptcy first and shed its debt obligations.[95] But the Financial Times said sources believed most bids were within the $1.5 to $2 billion range.[94] Barclays Capital, a British investment bank, was quoted as saying, "We find it unlikely that MGM's creditors would cleanly agree to a sale price materially below $2bn."[94] Time Warner, one media source reported, is seen by industry observers as the leading bidder since it already owns much of the MGM library and has large cash reserves.[94] Qualia Capital, previously thought to be a potential bidder, has suggested that MGM's creditors could avoid forcing the studio into bankruptcy by agreeing to transform $500 million of debt into company stock (which would provide MGM with a cash infusion as well as eliminate a substantial portion of debt).[95] By January 23, bids from Relativity Media (about $1.6 billion) and Reliance Entertainment (about $1.8 billion) were received as well.[96] Six days later, MGM extended its deadline to March 31,[97] and by the next day, News Corporation suggested that the company should offer MGM some cash to keep the company running.[98]
A few days later, Time Warner CEO Jeff Bewkes stated that he's interested in MGM, but doesn't need to be in any deals, but stated that they will think about it.[99] At the same time, News Corporation announced that they were kicked out of the bidding after CEO Rupert Murdoch stated that he was being outbid by the other bidders, and later considered buying the now-defunct Miramax Films from Disney.[99] Later, other bidders began bidding on Miramax and Liberty Media's Overture Films as well, which their respective owners have put up for bidding.[100][101][102]
MGM stated in February 2010 that the studio will likely be sold the next 4 months, and that its latest film, Hot Tub Time Machine, may be one of the last four films to bear the MGM name. However, some state that the company may continue as a label for new James Bond productions, as well as other movie properties culled from the MGM library.[103][104] A few weeks later, MGM has set March 19 as a deadline to receive bids from compaines interested in acquiring the studio, including Time Warner and Lionsgate, although Time Warner was considered the most likely to buy the studio since its Warner Bros. catalog already included all the pre-1986 MGM titles originally acquired by Ted Turner.[105][106]
On March 18, 2010, The Wall Street Journal reported that the MGM sale is likely to flop, reporting that the bids from Lionsgate and billionaire Leonard Blavatnik may be more complex than that of Time Warner's, but the three were unable to reach to the $2 Billion mark.[107]
Later, however, Time Warner emerged with the highest bid for the studio, at $1.5 billion, after being the last of three bidders (the other two being Lionsgate and Blavatnik) to submit bids,[108][109][110] and MGM will now review the offers with Time Warner as the frontrunner.[111] On March 25, Lionsgate announced that it would not raise its bid for MGM and dropped out of the sale.[112]
On March 31, MGM's lenders changed the date of its debt extension from April 8 to May 14.[113] On April 7, it was announced that Relativity Media, MGM's former bidder, would offer the studio $500 million to finance its future films.[114][115]
On April 8, reports said that filmmakers Tony Scott and Ridley Scott have expressed interest in controlling the studio.[116] Meanwhile, Time Warner announced that they may increase their $1.5 billion offer for MGM (which was deemed too low) by taking a stake for the studio, acting as an operating partner, or other bid structures.[117]
Since then, numerous media outlets began speculating that MGM is likely headed for bankruptcy, but also said that it may be sold.[118][119] However, Access Industries later dropped out of the sale on May 7, 2010, which made Jeff Bewkes state earlier that the MGM deal "could make sense, but only at the right price".[120][121]
On May 13, it was reported that MGM's lenders have agreed to extend forbearance on interest payments until July 14.[122] Later, on May 18, MGM's creditors were looking for a possible strategic partner to restructure the studio. Those having discussions with the studio's creditors include Summit Entertainment, Spyglass Entertainment and former Yahoo! executive Terry Semel.[123][124][125]
MGM's crisis has affected the production and release of its upcoming films. As a result of the sale, EON Productions' Michael G. Wilson and Barbara Broccoli announced that production of a proposed 23rd James Bond film has been suspended "indefinitely".[126] MGM has also shelved its remake of Red Dawn, as the studio has "no money to really finish the film, much less pay for a release".[127] Other projects share the same situation; The Matarese Circle (based on Robert Ludlum's novel, under the direction of David Cronenberg and contemplatively starring Denzel Washington and Tom Cruise), and the expected reboots to the RoboCop franchise, by screenwriter David Self and film director Darren Aronofsky and The Three Stooges franchise.[128]
On October 8, 2010, MGM announced that they will plan to vote for the Chapter 11 bankruptcy, following poor bids and failure to generate their $4 billion in debt.[129] If the deal is approved by lenders, creditors will take control of 95% of MGM, while the remaining 5% goes to Spyglass Entertainment.[130]
On October 15, 2010, Mary Parent, the co-CEO of MGM left the studio.[131]
On October 29, 2010, the MGM creditors approved the Spyglass Entertainment plan,[132][133][134][135] and on November 3, 2010, MGM filed for Chapter 11 bankruptcy.[136][8]
On November 12, 2010, the U.S. Bankruptcy Court in New York City approved MGM's Chapter 11 reorganization plan.[137][138][139]
[edit] The MGM library
Currently, the Turner Entertainment Co. unit of Time Warner owns the rights to the pre-May 1986 MGM film and television library, with Warner Bros. handling distribution. Turner acquired the MGM library during its brief ownership of the company in 1986. For some time after the sale, MGM continued to handle home video distribution of its films; those rights were reassigned to Warner Home Video in 1999.Through its purchases of many different companies and film and television libraries, MGM has greatly enhanced its film and TV holdings.
[edit] Material owned by MGM
- Nearly all of its own post-April 1986 library;
- Most of the post-1952 United Artists catalog (although it also includes a tiny fraction of pre-1952 UA material);
- The post-1981 Orion Pictures film and television library
- The Filmways library (except The Beverly Hillbillies and Petticoat Junction);
- The American International Pictures library (except early films);
- The Heatter-Quigley Productions library;
- The pre-1997 Samuel Goldwyn Company library;
- The pre-1996 Motion Picture Corporation of America library (excluding co-productions with other studios such as Dumb and Dumber with New Line Cinema);
- In regards to the 1991 film version of The Addams Family, MGM only owns the international rights, as Orion had sold North American rights to Paramount Pictures due to Orion's bankruptcy
- The Filmways library (except The Beverly Hillbillies and Petticoat Junction);
- The theatrical rights to most of the ITV Global Entertainment catalog, including their inherited Granada International and ITC Entertainment (The Return of the Pink Panther, Capricorn One, On Golden Pond, etc.) libraries;
- Most of the Cannon Films library (King Solomon's Mines, That Championship Season, etc., with a few exceptions, including certain films distributed by Warner Bros., the television rights to Lifeforce—those stand with Sony Pictures Television, and most territorial rights to Surrender and Superman IV: The Quest for Peace);
- Most of the pre-1996 PolyGram Filmed Entertainment library
- The international rights to most of the Interscope Communications co-productions with The Walt Disney Company, who handles U.S. rights;
- The Island Pictures/Atlantic Releasing Corporation catalog;
- The theatrical and television rights to Heathcliff: The Movie;
- Selected Nelson Entertainment properties (including the pre-Turner-merger Castle Rock Entertainment library with the exception of co-productions with Columbia Pictures), and Embassy Pictures properties, under license from StudioCanal (with the exception of two films co-produced and co-distributed by Columbia);
- The Epic Productions library, which includes the Trans World Entertainment and Vision P.D.G. International catalogs.
- Those of other smaller defunct studios, including Empire Pictures, Scotti Bros. Pictures and Hemdale Film Corporation.
- MGM also has the international theatrical and DVD rights (in certain territories) to Army of Darkness, which was released in the US by Universal Pictures, who has domestic theatrical and DVD rights.
[edit] Films
Main article: List of Metro-Goldwyn-Mayer films
