A cash infusion from MGM apparently has helped Carolco leave its union troubles behind.
Yesterday, the three major talent guilds representing writers, directors and actors and the Motion Picture Industry Pension Plan announced a new agreement with Carolco, whereby the production company will pay them $ 30 million for past and present film and television residuals.
Already the company has paid the guilds $ 9 million to settle residuals debt from the first two quarters of 1992. This agreement also covers members of the International Alliance of Theatrical Stage Employees through the pension plan.
The $ 30 million, which will be paid out through a complex payment plan that could ostensibly take up to three years, now settles the guilds’ tab–at least for the moment.
The agreement also marks the end of nine months of often bitter and contentious negotiations, with the guilds this past summer threatening to force Carolco into involuntary bankruptcy.
“On behalf of all the creative guilds, I’m very pleased to announce this landmark agreement with Carolco,” said Screen Actors Guild exec director Ken Orsatti, in a prepared statement.
“The precarious economic condition of the company required many months of difficult and intense negotiations. We now hope that Carolco will be a viable production force that continues to provide valuable employment and ongoing residual payments to our members.”
This week, Carolco’s board took a major step toward its financial restructuring, approving an offer from MGM to buy a stake in the company and receive $ 110 million from its three strategic partners: France’s Canal Plus, Japan’s Pioneer and Italy’s Rizzoli (Daily Variety, Dec. 23).
MGM will pay $ 30 million in cash for approximately 15% in equity and $ 30 million more for a note that will convert to common stock once certain performance milestones are met.