MGM buyout scores European Commission approval
The Lion will expire within a couple of weeks, but many there are still awaiting word of their fate.
Predictably, but more quickly than anticipated, the buyout of MGM by a consortium led by Sony passed its last regulatory hurdle Wednesday: approval by the European Commission.
What’s left now are final details on the financing, which is expected to be completed as early as April 8.
Yet the speed of the deal has come at the expense of clarity. Even in the days leading up to the agreement’s closure, MGM-based producers have not been told anything other than that their deals will be assumed by Sony. Most deals probably won’t last beyond the expiration of their contract, considering Sony already has more than 30 producer deals.
One MGM producer who recently called business affairs seeking information was told, “We’ll call you back.” There was no return phone call.
While MGM confirmed the transaction will close “before mid-April,” the complete transition process is expected to take three to six months.
At that point, MGM will be swept under Sony Pictures, existing primarily as a label and holding company. Its coveted 4,000-title library will be under management of Sony, Comcast and their consortium of private investor funds, with MGM chief financial officer Dan Taylor heading day-to-day operations as prexy.
Changes at the Lion will also begin once the deal is complete.
Only about 250 of 1,400, staffers — most in administration and library-related jobs — are expected to make the transition.
A few production execs are also expected to join Sony, but no deals have yet been made.
MGM chairman-CEO Alex Yemenidjian is departing with a $6.25 million package, and vice chairman-chief operating officer Chris McGurk will get $5.75 million on his way out. Both have contracts that end in April 2007.
The $4.8 billion deal, which was signed last September, has been characterized by its swiftness. Originally, completion of the merger was not expected until mid-summer, but approval by the necessary regulatory authorities was granted quickly and smoothly, and buyers are clearly anxious to finish the process.
In December, the Justice Dept. approved the acquisition. Later that month, MGM stockholders gave their support.
In February, Taylor was named prexy of MGM and charged primarily with keeping the books and making sure the library is well managed.