Deal approved; layoffs begin
The ax fell for 85 employees at Orion Pictures Thursday as Metromedia Intl. Group shareholders approved the $573 million sale of Orion Pictures and Goldwyn Entertainment Co. to billionaire Kirk Kerkorian’s Metro-Goldwyn-Mayer Inc.
Among those terminated were Orion exec veepees Brad Krevoy and Steve Stabler, whose attorneys at Loeb and Loeb are negotiating a settlement of their five-year contract with Metromedia.
Sources close to MGM said that 136 Orion employees will stay on during the transition, of whom 25 will definitely be absorbed into the studio, with the rest to be severed over the next nine months.
The disposition of Orion CEO Len White was not disclosed.
“With this acquisition, we will more than double the size of MGM’s current library,” MGM chairman and CEO Frank Mancuso said in a statement. “MGM now owns the largest modern film library in the world.”
The 2,000 titles MGM acquired from Metromedia joins Leo’s 1,400-plus films released since 1948 (most of which are United Artists titles), surpassing previous leader Warner Bros.’ 2,500-plus films.
The deal also gives MGM 10 completed films and five direct-to-video features for future release.
Orion produced Oscar-winners such as “Amadeus,” “Platoon,” “Dances With Wolves” and “The Silence of the Lambs,” but will now continue only through its library of 2,000 movies and TV shows under the MGM umbrella.
For Metromedia chairman John Kluge, the perfunctory shareholders meeting in Orion’s Century City offices Thursday took the billionaire out of the moviemaking business. Since the late 1980s, he has put about $300 million into Orion.
“The funds generated from the sale of the entertainment assets will go a long way to improving the company’s balance sheet, reducing debt and providing capital for the expansion of the international communications operations,” Metromedia president and CEO Stuart Subotnick said in a news release.
That leaves Metromedia to concentrate on television, radio and wireless telephone businesses in Eastern Europe and China. Metromedia retains control of the 49-unit Landmark Theatre Group, which was acquired with its purchase of the Samuel Goldwyn Co. (the company’s name was changed to Goldwyn Entertainment Co. after the sale).
The 35 staffers at Goldwyn were excluded from the wide layoffs, at least for the moment. “Nothing has been determined as to the Goldwyn organization and its eventual fit with MGM,” an MGM spokesman said.
For Orion heads Krevoy and Stabler, the ax fell before noon on Thursday. MGM vice chairman Robert Pisano and senior exec VP William Jones walked unannounced into the Orion offices and informed the duo that they had been terminated.
“It was business-like,” Stabler told Daily Variety.
The day marked a turning point for the partners, who joined forces barely out of college to form Motion Picture Corp. of America in 1985. Working with low budgets, genre scripts and eager young talent, they made more than 60 films for MPCA, now entirely owned by MGM, except for the duo’s three biggest successes, “Threesome” (TriStar), “Dumb and Dumber” (New Line) and “Kingpin” (Rysher).
“We could never finance our pictures ourselves above a certain budget level,” Stabler said, explaining how those pictures came to be co-financed by other companies.
For that reason, MPCA went looking to secure financing. They met Kluge in November 1995, which led to Metromedia’s acquisition of MPCA, and the installment of Krevoy and Stabler as co-heads of Orion. Krevoy and Stabler received $5 million in cash between them, plus stock in Metromedia.
“The opportunity was for us to rebuild the studio, greenlight films and then produce the films we greenlit,” Stabler said. “That opportunity they promised us has now evaporated and John Kluge has made a lot of money.”
MGM offered Krevoy and Stabler each a single year’s base pay of $625,000 as a severance settlement, causing the duo to consult their lawyers. Other pinkslipped Orion employees will receive six months of pay, along with benefits.
By contract, the MPCA name returns to Krevoy and Stabler.
“We intend to get it back,” said Stabler, who otherwise cited no specific career plans. “I’m exploring all opportunities,” he said.
“It’s a sad day for independents,” Krevoy told Daily Variety, without disclosing his own plans. “Orion was America’s first true independent. The company was founded by Arthur Krim. Mike Medavoy and Bill Bernstein garnered more Academy Awards than any indie of its time. But now we wish Frank Mancuso and his team the best of luck in rebuilding MGM.”