Lion’s revenues go for a dip

2Q sales slip from $487.7 mil to $406 mil; co. cuts overall net loss

This article was updated at 9:34 p.m.

NEW YORK — With all eyes focused on its pending sale, the Lion snored rather than roared through its second fiscal quarter.

MGM on Thursday reported revenues down 17% for the three months ended June 30 compared to the same period a year ago, but it delivered a sharply lower net loss — which should ease investors’ nerves for at least another quarter of uncertainty.

Without last year’s homevid bonanza from “Die Another Day” (the Lion’s most successful home entertainment release ever), second-quarter sales slipped from $487.7 million to $406 million. Company nonetheless cut its overall net loss to $19.7 million, down from $133.6 million last year, when it recorded a $93 million loss on the sale of its stake in three Rainbow Media cable networks.

TV programming sales contributed revenue of $46 million, down from $50 million a year ago. However, the unit delivered higher operating earnings of $12.6 million, up from $3.1 million.

Based on its skeletal second-quarter earnings press release and conference call, the Lion is looking increasingly like a lame duck, said one fund manager.

Company refused to discuss the status of its negotiations with would-be buyers. But Time Warner may be near to snatching MGM with a stock-and-cash joint venture offer — a far simpler proposition than Sony’s bogged-down, private equity-backed bid.

MGM chairman-CEO Alex Yemenidjian insisted he’s “not a big believer in measuring performance on a quarter-by-quarter basis.” Instead, he spent a lot of time on the call touting the company’s small but growing international networks group, its core home entertainment sales and a resurgent TV production arm. Company also focused investor attention on the $33.6 million in net operating flow it generated during the quarter.

“Our ability to consistently generate cash flow afforded us the opportunity to reward our shareholders, yet again, with a tax-free, extraordinary dividend of $8 per share during the second quarter,” Yemenidjian reminded investors in a statement.

It’s also keeping volatility to the minimum, with only two films left to be released this year after a middle-of-the-road box office run from recent pics “Saved!,” “Walking Tall” and “Soul Plane.” Company said teen pic “Sleepover” would result in a small loss.

Not surprisingly, execs focused more on MGM’s core home entertainment biz than on its recent releases. Homevid remains the big sales driver for the Lion, with worldwide DVD unit shipments up 11% from last year to roughly 34 million. Chief operating officer and vice chair Chris McGurk noted home entertainment library sales were up 136% in markets where MGM now self-distributes, such as Germany and Australia.

Looking forward, the studio will release two more features in 2004: thriller “Wicker Park,” starring Josh Hartnett, in which MGM invested a mere $9 million, and “Beauty Shop,” which could get pushed back into early ’05.

As for the much-anticipated next Bond film, McGurk insisted the studio was still on track for a November 2005 release. “We’re deep in development process, we’ve got a script … and we’re interviewing directors,” he said, adding that the casting issues (such as who may replace Pierce Brosnan in the title role) will be addressed.

Yemenidjian devoted a significant chunk of the call to talking up MGM’s international cable nets, which now claim more than 24 million subscriber in 110 territories, growing “at single-digit rates.” At best, however, these nets generate just $14 million in affiliate fees, analysts estimate, plus sales from movies MGM sells to the joint ventures that operate the channels.

Yemenidjian said the company was looking to leverage its Latin American channels to possibly target the U.S. Hispanic market.

Company also touted its recent success with TV production, noting new commitments for its Showtime series “The L Word” and “Dead Like Me.” Lion is also developing series versions of “Legally Blonde” for syndication and “Barbershop” for Showtime.

MGM expects library sales of its pre-1998 titles to hit $450 million this year.

More Scene

  • Dwayne Johnson Idris Elba

    Dwayne Johnson: Idris Elba Nixed 'Black James Bond' Joke in 'Hobbs & Shaw'

    In the “Fast & Furious Presents Hobbs & Shaw,” the movie’s villain Brixton, played by Idris Elba, spreads his arms out wide and declares “I’m black Superman.” It turns out that might not have been the original line. Dwayne Johnson tells Variety that Elba was first asked to proclaim he’s “black James Bond,” but the [...]

  • Matteo BocelliAmerican Icon Awards Gala, Inside,

    Top Music Manager Calls Out American Icon Awards for Failing to Pay Talent

    The centuries-old adage no good deed goes unpunished is a common refrain for star music manager Scott Rodger of late. Rodger, who represents Paul McCartney and Andrea Bocelli at Maverick, says his client Matteo Bocelli, the son of the opera star, was stiffed out of promised expense reimbursement by the American Icon Awards. The event, [...]

  • Mary Bailey Steve D'Angelo, Jim Belushi

    Cannabis Industry Tackles Justice Reform With 'Last Prisoner Project'

    Jim Belushi is standing two feet away in the backyard of his spacious Brentwood home, honking a harp like he’s a Blues Brother back in sweet home Chicago accompanied by noted reggae band Rebelution’s Eric Rachmany and Kyle Ahern, who provide a 12-bar shuffle. There’s the sweet smell of skunk – and success — hanging [...]

  • Dwayne Wade holds up the legend

    Dwyane Wade, Megan Rapinoe Win Big at 2019 Nickelodeon Kids' Choice Sports Awards

    The 2019 Nickelodeon Kids’ Choice Sports Awards was filled with incredible athletes, inspiring moments and — of course — a massive amount of slime. “I love the kids. I love the slime. I loved the games. I love seeing celebrities and athletes like become kids again. And it’s like my favorite thing,” Michael Strahan told [...]

  • Dave Bautista and Kumail Nanjiani

    Dave Bautista Talks Representation in Hollywood and Defying Stereotypes with 'Stuber'

    Dave Bautista and Kumail Nanjiani make an unlikely duo in “Stuber,” an R-rated comedy about a police officer and his Uber driver. But the two connected over the rare chance to star in the film as actors of Asian descent (Baustia is half-Filipino and Nanjiani is Pakistani). “I’ve been stereotyped for a couple different reasons [...]

  • Skin

    How Jamie Bell Transformed Into a Neo-Nazi for 'Skin'

    Anyone who still associates British actor Jamie Bell with his breakout role as a young boy who dreams of becoming a ballet dancer will quickly forget all about “Billy Elliot” after seeing “Skin,” which screened at ArcLight Hollywood on Thursday night. “I was shocked,” the film’s writer-director, Guy Nattiv, told Variety of his leading man’s [...]

More From Our Brands

Access exclusive content