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Spyglass in Lion’s den?

Berber, Birnbaum make presentation to MGM

Word that Spyglass Entertainment has entered the Lion’s den and is in the lead to run beleaguered MGM was met with skepticism Tuesday, with insiders across Hollywood saying a deal is a long way from closing.

What’s known is that Spyglass toppers Gary Barber and Roger Birnbaum have made a presentation to MGM. The details, how-ever, are being kept tightly under wraps.

Late Monday, the Wall Street Journal broke the news that Spyglass and Summit Entertainment were under consideration to run MGM once the company restructured its balance sheet.

MGM and Spyglass had no comment on the report.

Insiders say Summit, whose interest in partnering with MGM had been known, is still in the mix.

MGM is in its eighth month of looking for a resolution to deal with its massive $3.7 billion debt load. One option is to find a partner (such as a Spyglass or a Summit) that would put up a $1 billion production fund, whether alone, or through other partnerships.

The WSJ report said Spyglass is the preferred choice of a group of hedge funds including Anchorage Advisors, Highland Capital Management and Davidson Kempner Capital Management — a group that holds more than a third of MGM’s bank debt.

Sources told Daily Variety that they don’t expect a solution to be reached until closer to July 14 — the date on which its fifth extension on forbearance of its debt payments expires. It’s still unclear what route MGM will take. Most likely scenario would be a recapitalization, probably through a pre-packaged bankruptcy.

With Time Warner having made the only bid at a price far lower than the debtholders hoped, the possibility of a sale is believed to be diminishing.

MGM ousted Harry Sloan as chairman last August and replaced him with turnaround specialist Stephen Cooper. The studio put itself up for sale in November, drawing a trio of binding offers in mid-March — with Lionsgate bailing out a week later, and Len Blavatnik’s Access Industries dropping out earlier this month, leaving only Time Warner as a possible buyer.

MGM assets include its name and logo, the United Artists operations, a library with more than 4,000 titles, the James Bond franchise, half of “The Hobbit” franchise and a bare-bones film and TV operation.

The uncertainty over MGM has resulted in a halt in preparations for a 23rd Bond film. Director Guillermo del Toro blamed MGM last month when he bailed from the “Hobbit” films, though co-financier New Line insisted the problems are unrelated.

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