In the face of increasingly dire financial forecasts for the long-troubled studio, MGM has halted all TV series development, the studio confirmed Wednesday.
MGM Worldwide TV Group will continue to produce, market and distribute the 10 series ordered for next season, including CBS’ “Magnificent Seven” and the three series that air both on cable and in syndication: “Stargate SG-1,” “The Outer Limits” and “Poltergeist: The Legacy.”
MGM also will continue to produce movies for Showtime as part of their long-standing output deal. An MGM spokes-woman termed the current status as a “slowdown to focus on the projects already in production.”
The news came as a surprise to many of those who have been shepherding projects at the studio. As late as last week, the TV division was working on deals involving a syndie magazine show tied to the National Enquirer tabloid, and another syndie magazine-style show, “Daily Edition.” Producers with existing shows on the air were also caught off guard.
But the news came the same day MGM revealed in a U.S. Securities & Exchange Commission filing that it is considering mergers to shore up its financial woes, and just a few days after announcing that it’s seeking a $250 million capital infusion through a stock offering.
A statement released by MGM said, “The company’s TV strategy is designed to utilize valuable library assets, minimize up-front capital investment … through co-production arrangements that minimize risk associated with large deficit financing. New programming opportunities will be evaluated consistent with this strategy.”
Good news, bad news
Industry sources contend that MGM’s current crisis resulted from ostensibly good news: The studio received more TV orders than expected and can’t afford to deficit finance any new projects. Several of its TV series have received two- or three-year renewals, and the studio is simply overcommitted and unable to recoup all its costs right away.
MGM executives informed agency sources Wednesday that it will no longer solely deficit finance projects, and no new series will be developed unless partial or complete financing is provided from outside sources.
MGM Worldwide TV Group prexy John Symes, distribution prexy Sid Cohen, exec VP of business development John Pike and other key execs are expected to stay put, for now. An MGM spokeswoman said there are no current plans to lay off the company’s handful of TV development executives.
While some industry insiders speculated development execs will simply be shifted to current programming, others say a downsizing may be inevitable because many executives’ duties have been eliminated.
The TV development shutdown comes just a year and a half after MGM reentered the network TV business after a six-year absence and inked a pricey $12 million to $15 million production and development deal with Trilogy Entertainment, which produces “Magnificent Seven,” “Outer Limits” and “Poltergeist.”
Praise for topper
Symes has been widely praised, in and outside of the Lion, for rebuilding the dormant TV division into a studio with 10 series in just a few years. Symes, a Paramount TV vet who worked under MGM chairman Frank Mancuso during the latter’s tenure as Par chairman, was hand-picked by Mancuso in late 1993 to revive MGM’s TV fortunes.
MGM faces the problem of many indies, however. Without a network or station group partner, the studio has a tough time getting the most profitable types of shows on the air.
Early on, Symes struck an innovative deal with Showtime that allowed MGM to reap license fees from the pay cabler as well as coin from selling the shows into broadcast syndication after the pay TV premiere. There’s no such mechanism for big-budget network dramas like “Magnificent Seven,” which debuted last season on CBS and is a midseason contender for the upcoming season.
The other MGM series that will remain in production are the syndie strip “LAPD: Life on the Beat,” Showtime’s “Dead Man’s Gun,” Pax Net’s “Flipper,” Fox Family Channels’ “All Dogs Go to Heaven: The Series,” the syndie animated strip “RoboCop: Alpha Commando” and the syndie animated weekly “The Lionhearts.”