Int'l distrib folded into MGM under Fox pact

United Artists will shut its London sales office by Nov. 1 and fold international film distribution into MGM’s overseas distribution deal with 20th Century Fox, officials said.

Move, announced Friday, will result in an estimated 15 layoffs. Those getting pink slips include Wendy Palmer and Fiona Mitchell, well-known international sales execs hired about two years ago to run UA Intl., formerly known as G2 Films.

Metro-Goldwyn-Mayer struck a deal with Fox in June 1999 to handle international theatrical and video distribution of MGM titles through Jan. 31, 2003. Extending that relationship to UA “will maximize the value stream for international rights for our company and our production partners,” said Larry Gleason, president of worldwide distribution for MGM.

Specifically, UA will be better positioned to exploit burgeoning opportunities for international TV output deals as a result of the new arrangement, he said.

That’s partly because MGM and Fox agreed when their MGM international pact was struck to jointly explore cable and satellite distribution ventures worldwide. Also, MGM’s own TV division is in a better position to package film product and thus fashion more lucrative output deals for the digital platforms proliferating throughout Europe and elsewhere, Gleason said.

“We’ve made some really substantial TV output deals recently in Germany, France, Spain and Japan,” he said. “The voracious appetite of international pay television (means) these international operations are paying top dollar right now for product.”

London prod’n remains

UA will maintain a “strong production presence” in London despite the overseas sales shutdown, the studio said. An industry source suggested Palmer and Mitchell were in discussions about possible involvement in the surviving production operation, but MGM officials declined comment on the matter.

The London production unit is currently in post-production on a still-untitled film helmed by Michael Winterbottom (“Jude,” “Welcome to Sarajevo”). Based on the Thomas Hardy novel “The Mayor of Casterbridge,” the film is slated for fourth-quarter release in association with Pathe Pictures, the Arts Council of England, StudioCanal, the BBC and Alliance Atlantis.

A well-placed source put the London production unit’s annual operating budget at just under $2 million. Annual cost savings to MGM from the shuttering of international sales operations will be about $2 million, the source said.

Operating as MGM’s specialty film division, Santa Monica-based UA has co-production deals with GreeneStreet Films, Self Timer and Francis Ford Coppola’s American Zoetrope.

Follow @Variety on Twitter for breaking news, reviews and more