Lion looking for cable partner, road show still planned
NEW YORK — Metro-Goldwyn-Mayer has actively revived talks with Cablevision Systems, sources said Friday, in another bid to put its massive film library to work alongside the cable company’s strong channels and carriage agreements.
Spokesmen for both MGM and Cablevision declined to comment. But sources said the on-again, off-again discussions were revived by Jules Haimowitz, recently appointed to spearhead the Lion’s television initiatives and better leverage its library — far and away its prime asset. He was brought on board by MGM’s chairman Alex Yemenidjian and president Chris McGurk.
The talks are fluid but any deal would involve considerably more than a pure licensing agreement. Cablevision owns Rainbow Media, an umbrella company for cable channels including Bravo, the Independent Film Channel and American Movie Classics. All are possible outlets for MGM product.
Under discussion is the possibility of MGM taking an ownership stake in a new venture that could involve a rebranding of the Rainbow channels to include the MGM name. Sources close to the studio stressed that the Lion is holding conversations with a number of potential cable partners.
MGM also has not completely abandoned the idea of starting its own movie channel or channel cluster. The trouble with that plan, Wall Streeters and industry players have pointed out, is carriage on crowded cable systems. But with Rainbow as a partner and Cablevision as a possible carrier, MGM would certainly be in a better bargaining position.
Shares of MGM were buoyant Friday as rumors trickled out of a possible deal. Speculation was exacerbated by the studio’s decision to delay a planned equity offering (Daily Variety, Aug. 26). MGM said the road show, where execs present the company to U.S. and European investors, had been pushed back from the beginning of September because of scheduling conflicts and vacation plans ahead of the long holiday weekend.
MGM insiders still insist the road show will launch sometime next month, with an offering probable in October. But if a deal gets done before then, the offering would likely be pulled, because MGM would presumably have sufficient financing. Some Wall Streeters are hearing that the offering has been postponed indefinitely. MGM, which is 90% owned by Kirk Kerkorian, had planned the $750 million offering to raise fresh cash and expand its shareholder base.
MGM has also held talks with Liberty Media, which owns pay channels Encore and STARZ!, as well as with Barry Diller’s USA Networks. Those companies don’t seem to be in the ring just now but can’t be counted out.
MGM shares jumped 5% to $17.88 Friday.
(Benedict Carver in Los Angeles contributed to this report.)