NEW YORK — MGM and Showtime Networks announced Monday a sweeping, $1.4 billion output deal that covers current and future MGM theatrical output, 1,200 library films and a commitment to co-produce three TV series.
Running through 2008, deal extends and enhances a pre-existing pact and will provide up to 270 firstrun theatrical films to Showtime nets, which beat out HBO and Starz Encore for the package.
“This is a heavily competitive environment,” MGM Worldwide Television Distribution president Jim Griffiths said. “HBO and Starz made us aggressive offers, but Showtime stepped up and won.”
Deal gives Showtime exclusive pay television rights to MGM theatrical features released through 2008. Other films in the package include “Return to Me,” “The World Is Not Enough,” “The Thomas Crown Affair” and “Stigmata,” as well as forthcoming releases such as “Hannibal,” Ridley Scott’s sequel to “The Silence of the Lambs.”
Deal also includes commitment for MGM Television Entertainment and Showtime to create and produce three original one-hour series to premiere in 2003, 2005 and 2007. Showtime has agreed to pick up a fifth season of “Stargate SG-1,” marking another 22 episodes of the sci-fi series.
Showtime series “Poltergeist” and “Outer Limits” resulted from a previous output agreement with MGM. Although MGM TV has produced numerous telefilms for Showtime, including “12 Angry Men,” “Inherit the Wind” and the upcoming “Dirty Pictures,” current deal does not include any telefilm productions.
Agreement also calls for Showtime to license up to 1,200 titles from the extensive MGM film library over the next six years. “The bread and butter of our company is still the library,” Griffiths said.
Also, as Showtime rolls out a video-on-demand strategy, the network will start to offer MGM films on a subscription basis during its pay window with the Lion.
Agreement also allows for Showtime to distribute MGM pics via new technologies, including the Internet, during the window.
“Nobody quite knows where technology will be going, so you negotiate for flexibility so that you don’t lose out on a way to get your service to customers,” said Showtime’s Matthew Duda, exec VP of program acquisitions and planning.
As recently as September 1999, MGM was in discussions with at least two broadcast nets about an output deal for all of the studio’s theatrical pics over several years. But Griffiths said those negotiations have been put on hold because MGM is still trying to determine strategic alternatives involving MGM-branded movie channels. “Until we really come to a conclusion with our strategic goals, I don’t think it would be appropriate to align with a network,” Griffiths said.
He added MGM is in negotiations with broadcast nets for the rights to “Return to Me,” “Supernova” and the upcoming “Three Strikes.”
MGM plans to release first-quarter financial results today.