With talks of a sale quieted and a bumpy first quarter behind it, MGM hopes to finish the year like a Lion instead of a lamb.
“We feel really good about the slate,” says vice chairman and COO Chris McGurk. “We got off to a disappointing start, but we had a great year last year, and we’re confident about the rest of 2002 and into 2003.”
Just two months ago MGM was both stumbling from back-to-back bombs in “Rollerball” and “Hart’s War” and parrying talk that principal shareholder Kirk Kerkorian might simply cash out.The film flops pushed the company to a $91 million first-quarter loss, considerably worse than last year’s $18 million Q1 loss.
Nonetheless, McGurk and chairman Alex Yeminidjian are promising a better outcome for the year as a whole. Here’s why:
The studio has shown it will spend money for talent, thanks to a new $million credit facility led by Bank of America, a stock sale that raised $175 million, and access to co-productions and overseas investors.
The studio has recently stacked up deals with Oscar winners, including Denzel Washington (“Out of Time”); Jim Broadbent (“Nicholas Nickleby”); Benicio Del Toro (“Bring Me the Head of Alfredo Garcia”); and Michael and Kirk Douglas (the just-renamed “A Few Good Years”).
At least some talent agents say MGM still isn’t their first choice when shopping projects because of doubts about its stability and marketing oomph.
MGM fans say, however, that its smaller size can be an advantage, with more freedom and flexibility than possible when a studio is lost in a corner of a conglom’s org chart.
“MGM is the only example left of what studios used to look like,” says Michael Douglas. “There’s a way to deal with them that I’ve found very enjoyable.”
So the Lion keeps trying to change perceptions around town by continuing to forge deals, including two more last week. It will release 20 pics this year.
The studio and Cheyenne Enterprises signed a first-look deal with comic-book king Stan Lee’s POW! Entertainment, for franchisable action-adventures.
And Halle Berry, already the female lead in this winter’s James Bond pic, will star in “Brown-Eyed Girl” and “Foxy Brown,” the latter a remake of an MGM library title.
Bond is MGM’s ultimate franchise, but now it hopes to expand the list.
“Legally Blonde” and “Jeepers Creepers” are headed to sequels, and several upcoming films have similar possibilities: this summer’s “Molly Gunn” and “The Crocodile Hunter,” and next year’s “Cody Banks.”
The company also lays off risk with overseas rights sales and co-productions.
With “Windtalkers,” it sold three territories for $30 million, about a third of production costs. It has less than $20 million exposed in “Out of Time,” even though Washington himself received $20 million.
And MGM took international rights on its Miramax co-production of Anthony Minghella’s “Cold Mountain,” counting on the overseas draw of Nicole Kidman, Jude Law and Renee Zellweger.
“All those films have the opportunity for serious upside,” McGurk says. “We feel really good in this mix that we’ve got a lot of very smart shots.”
MGM is making a niche play out of United Artists, turning it into a specialty imprint that this year nabbed the company’s first Oscar in six years (“No Man’s Land”).
UA’s dozen pics this year include Sundance hits “Personal Velocity,” which won the grand jury prize, and the Cristina Ricci starrer “Pumpkin.” The company also has high hopes for summer pics “Igby Goes Down” and “24-Hour Party People.”
“Luckily for all of us, they aren’t movies that have to hit huge for that to happen for us,” says distribution and marketing prexy Bob Levin.
The MGM imprint’s next big release is John Woo’s “Windtalkers,” which debuts June 14 with none of the marketing challenges that shot down “Hart’s War.”
“The star of the picture (Nicolas Cage) is the hero of the picture, playing a role people like to see him in,” Levin says. “John Woo is painting a huge action landscape. There’ll be a big ad campaign, and we’ll have participation from the codetalkers, the military and the D.C. intelligence community.”
Woo says he has been delighted with MGM’s support, and his broader first-look deal there.
“For the moment, I’m pretty happy,” Woo said. “They really give you a lot of support and friendship. That’s really important to me.”
The Lion’s biggest pic is of course the next Bond, “Die Another Day.” Halle Berry’s casting was fortuitous, her subsequent Oscar win making her perhaps the hottest Bond girl ever.
“We have lots more magazine cover opportunities because of her, and the number of TV networks talking to us is remarkable,” says Levin.
The company wraps the year with Bruce Beresford’s “Evelyn,” “A Few Good Years” and “Nicholas Nickleby.”
Producer John Watson of Trilogy Entertainment, which has produced several TV and movie projects at MGM, gives the studio’s current leadership good marks.
“I think when these guys came in, we felt a real energy boost,” Watson says. “It was a real shot in the arm.”
That energy was sapped this winter, when the company was on the block, its future clouded.
Sony and MGM were in fact well along in merger talks to create a company controlling libraries filled with 47% of all studio movies ever made. But despite an agreement in principle between MGM and Sony’s top U.S. execs, the latter’s Japanese corporate chieftains balked.
The uncertainty took its toll on the Lion: Some deals weren’t being brought to MGM, or the company had to pay more to get them.
“It was a frustrating distraction that we’re glad to have behind us,” McGurk says.
Michael Douglas says the talk of a sale and MGM’s issuance of additional stock to raise money “didn’t help” in dealings with outsiders.
But the recent decision to extend five-year deals to Yeminidjian, McGurk and studio prexy Michael Nathanson has eased concerns, he says.”Everybody re-upped,” Douglas says. “There’s continuity. It was a good voice of support for the leadership by Kirk (Kerkorian).”There’s yet another reason to be confident about MGM’s prospects, its execs say.
“I think we have a great slate,” Levin said. “But don’t judge us on two or three movies. At the end of the year, we’ll look pretty good.”