With $500 million secured, studio looks to 007
Now that MGM’s has completed its restructuring with $500 million in fresh funding, one of the top priorities is to renew James Bond’s license to kill.
The infusion of funds from the $500 million line of credit, arranged by JPMorgan, represents a vote of confidence in MGM’s prospects — particularly given its struggles in recent years, when a crushing debt load brought production to a standstill. MGM is also expected to seek a separate loan of $265 million-$275 million for its share in the back-to-back “Hobbit” movies, which begin shooting in New Zealand in February.
The company, which made the announcement Monday, said its secured lenders are exchanging about $5 billion, including accrued interest and fees, for most of the equity in MGM. Spyglass Entertainment toppers Gary Barber and Roger Birnbaum will serve as co-chairmen and CEOs.
“MGM is emerging from one of the most challenging periods of its storied history,” the duo said. “We are honored and inspired at the opportunity of leading one of Hollywood’s most iconic studios into its next generation of unforgettable filmmaking, global television production and distribution and aggressively pursuing, developing and exploiting new digital entertainment platforms.”
The most likely candidate for immediate spending will be the 23rd James Bond movie, with Daniel Craig in his third outing as 007. Insiders believe MGM may turn to Sony for co-financing, as it did on “Casino Royale” and “Quantum of Solace,” or sell off some of major foreign territories.
MGM has been working up plans for a 2012 yearlong commemoration of the 50th anniversary of the first Bond pic, 1962’s “Doctor No,” so the studio will probably move as quickly as possible to lock down Craig and to secure a director. Sam Mendes has long been rumored to be the leading candidate to helm.
MGM hasn’t commented officially on the next Bond pic in more than a year. It announced in June 2009 that “Frost/Nixon” scribe Peter Morgan was joining with Neal Purvis and Robert Wade — who worked on “Casino Royale” and “Quantum of Solace” — to pen the script, but development stalled after MGM brought in turnaround specialist Stephen Cooper later that summer.
Beyond Bond and “The Hobbit,” the MGM slate is murky at best. Under production chief Mary Parent, who ankled in October, MGM had ramped up production in 2008 by acquiring projects such as Robert Ludlum’s “The Matarese Circle” and jump-starting the slate with reboots of MGM titles such as “RoboCop,” “The Pink Panther” and “Red Dawn.”
The “Red Dawn” remake is now one of three completed MGM films and is now awaiting release, along with “Cabin in the Woods” and “Zookeeper,” the last of which Sony took over and will open next summer.
Barber and Birnbaum will also be under pressure from Carl Icahn, who owns about 14% of MGM’s debt and is expected to keep pushing to merge the studio with Lionsgate. The billionaire agreed to support the restructuring plan after it was revised to exclude titles from the Spyglass library — a move that reduced Barber and Birnbaum’s stake in the new MGM from 5% to less than 1%.
Icahn will also have a representative on the nine-member MGM board. Board members include a trio of reps who were part of the creditors committee — Patrick H. Daugherty of Highland Capital Management, Christopher Pucillo of Solus Alternative Asset Management and Kevin Ulrich of Anchorage Capital Group. MGM has also tapped MySpace co-president Jason O. Hirschhorn and former CBS chief financial officer Fredric G. Reynolds as directors along with Barber and Birnbaum.
MGM isn’t expected to emerge from Chapter 11 bankruptcy protection officially for several more months.