OK, LET’S TRY TO SORT THIS OUT. The French bankers at Credit Lyonnais decide they have to unload MGM. Hence they announce the equivalent of a garage sale. Bidders line up and immediately ask, “What the hell are we buying?” The French say, “Whatever it is, it will cost you about $1.5 billion. We’re not going to get burned again.” The bank’s Paris headquarters promptly burns to the ground. The potential buyers all decide they need partners, so they promptly begin forming alliances, then break them up, all the while leaking disinformation about their rivals.All this has proved to be a fascinating spectacle but now, suddenly, it’s crunch time. Within the next four weeks, offers have to be made and a sale will be announced. All of which underscores the following question: Is this any way to sell a movie studio? Even one with a rag-tag past? MGM has had its glory days to be sure, but as early as 1969 it had become Hollywood’s ragamuffin. Edgar Bronfman Sr., then 40, had bought the studio, but it was hemorrhaging money so badly the Seagram clan pressured him to unload. MGM fell into the hands of Vegas operator Kirk Kerkorian almost by default — some wags still wonder whether Kerkorian thought he was buying another casino. Soon the studio was turning out such distinguished films as “In the Black Belly of the Tarantula,” and losing even more money. Lately, of course, MGM under Frank Mancuso has been enjoying a renaissance with hits including “The Birdcage” and “Goldeneye,” and so the French bankers — who never wanted to own a studio to begin with — felt it was a propitious time to unload. The net result: All sorts of companies have been burrowing through MGM’s books, and the trade has been rife with rumors. Peculiar rumors. Reams of stories have appeared about Morgan Creek’s interest in MGM, for example. While Jim Robinson is a stalwart fellow, it’s puzzling that several far more formidable entities also have been plowing through the books but have escaped attention, such as Rupert Murdoch’s News Corp. or Disney or NBC or Polygram. Or for that matter, Warners. The Warners role is, to say the least, complex. One reason: The poison pill provision buried in the MGM-Warner video contract, which provides that Warners, until 2003, has the right to distribute all video product not only of MGM but also of any company that acquires MGM. THIS NASTY LITTLE SUBCLAUSE would doubtless be fought in court, but the bankers, meanwhile, will have to provide some sort of expensive indemnification. Warners distributes the pictures of Arnon Milchan’s New Regency, as well as of Robinson’s Morgan Creek and, hence, if either were a participant in the MGM acquisition, it might also end up distributing MGM product (or at least providing backroom services). While Warners has made the commitment to back New Regency’s bid, it has also hinted that it might even try to engineer the acquisition on its own — a move that would doubtless arouse the curiosity of the Federal Trade Commission. At the moment, while other potential bidders still are forming and unforming alliances, New Regency would seem to be the most combat-ready. The bulk of its funding would emanate from Chase Bank — a sum approaching $1 billion — while the rest, sources say, would come from Warners, Oz media kingpin Kerry Packer and well-heeled New Regency itself. A man who doesn’t like dancing on the edge, Milchan is understood to be receiving other offers of support that could raise his comfort level. There were rumors of a major South Korean investment behind New Regency and Morgan Creek, but it’s understood that neither Samsung, which backs Milchan, nor Daewoo, which is said to be linked to Robinson, has as yet obtained the permission of its government to make an immediate overseas commitment of this magnitude. Such a commitment takes at least 60 days. Irrespective of these maneuverings, the basic question remains: What is MGM really worth? Some who have scanned the books have come away with the conclusion that MGM still is essentially a bankrupt asset. To be sure, it’s in far better health than when Kerkorian grabbed it a generation ago, but its overhead still overshadows its earning potential. THEN WHY ARE THE BIDDERS LINED UP? Why is even Frank Mancuso making an 11th-hour effort to line up an alliance of backers? One obvious reason is that Leo the Lion remains one of the world’s great logos. Now that “branding” has become the most overused word in the business vocabulary, MGM offers a unique asset. Moreover, the UA library of movies retains both its illustrious aura and its earning potential, kicking off $70 million to $80 million a year in revenues. Take New Regency for example: Here’s a company that has produced about 55 pictures, ranging from “Pretty Woman” to “Heat,” and that has proved it can not only pick hits but also mobilize serious financial resources, yet few outside the Hollywood community recognize its name. An MGM takeover could change all that. Or take Polygram, the Anglo-Dutch giant whose movie strategy seems increasingly blurry. Polygram’s deal with Gramercy expires in December. Its Interscope unit has only one more title to deliver under its deal with Disney. Does Polygram intend to pull its act together and form its own distribution company or continue to meander in diverse directions? Clearly an MGM ploy would offer a unique opportunity to obtain a library and some distribution muscle as well. Finally, what of MGM itself? Whoever ends up owning MGM probably will either fire or strip down the management group now running the company. Its distribution and marketing machinery will be merged with that of another studio, such as Warners, or virtually eliminated. MGM could end up in the same position that TriStar occupies with Sony — an entity that creates content but otherwise is an invalid. “There were giants in those days,” intoned Spencer Tracy as he invoked the Book of Genesis at the funeral of Louis B. Mayer, and surely MGM was a giant in its era. That era is past. The garage sale is its epitaph.