MGM Holdings made the announcement Monday evening, saying it had initiated a CEO transition and and executive search for Barber’s successor. The company said Barber had led MGM “with distinction over the past eight years.”
MGM gave no reason for his firing. Sources familiar with the situation said Barber was blindsided by the news Monday in a meeting with board members. Barber was said to have been told the board wanted to take the company in a different direction. Sources close to the company said there had been no outward indications of discord between Barber and the board but it’s understood the ouster was done at the direction of MGM chairman Kevin Ulrich, CEO of major MGM equity shareholder Anchorage Capital Group.
MGM did not immediately respond to requests for comment on the CEO upheaval. Barber told Variety he was “proud of all the accomplishments at MGM over the last eight years I’ve led the company.
“We’ve taken MGM from the depths of bankruptcy to one of the greatest turnarounds in corporate history,” Barber said. “I leave behind many friends and colleagues and I wish them well.”
The timing of the shakeup is surprising given that Barber has been active during the past year cutting deals and partnerships with an eye toward long-term growth. MGM completed the $1 billion acquisition of Epix last September. The company recently relaunched the Orion Pictures banner and has been investing big in an expanded television production entity. MGM TV scored a triumph last year with its Hulu drama “The Handmaid’s Tale” becoming a cultural phenomenon and landing the Emmy for best drama in its first year.
For sure, MGM is in better shape than when Barber took the reins with his longtime partner Roger Birnbaum in 2010 after it emerged from bankruptcy. Barber streamlined its Hollywood operations, cut costs and did made more use of MGM’s library as streaming platforms came online than the previous MGM management regime of Kirk Kerkorian and Alex Yemenidjian.
Barber sold off a number of underperforming international channels with an eye toward investing in content production. The Epix acquisition was designed to allow MGM TV a platform to launch shows that could be the monetized through international TV sales. MGM also moved to expand its unscripted TV capacity with the acquisition of Evolution Film & Tape for about $18 million last July. In 2014 and 2015 MGM paid about $600 million to buy out Mark Burnett and Hearst’s One Three Media venture, putting MGM in the reality TV business in a big way with NBC’s “The Voice,” CBS’ “Survivor” and ABC’s “Shark Tank,” among other shows.
On Barber’s watch, MGM has released two highly successful James Bond movies: “Skyfall” and “Spectre.” After much speculation about Daniel Craig bowing out as 007, the actor is attached for the 25th Bond movie, as is director Danny Boyle, for release on Nov. 8, 2019. MGM in October took a step toward reviving its own domestic distribution infrastructure in a pact with Megan Ellison’s Annapurna Pictures, although the studio is still shopping for a major distributor to handle the international rollout of the next Bond pic.
MGM for the nine months ended in September reported net income of $305.5 million on revenue of $856.8 million.
“Over the past eight years, MGM has successfully built a world class company and talented team,” said Ulrich in a statement. “With this transformation complete, MGM is uniquely positioned for exceptional future growth in the evolving entertainment landscape. Now is the right time to enable the next generation of leadership who can help drive the creativity, collaboration and partnership needed to continue the Company’s positive trajectory. Looking forward, we are committed to empowering our team to take charge, innovate and execute on the promising opportunities in front of MGM.”
The board has temporarily formed an Office of the CEO to oversee the company’s day-to-day operations during this period. The Office of the CEO will report directly to the board and include a group of divisional heads and senior executives. In February, MGM also appointed Chris Brearton, formerly an media M&A attorney with Latham and Watkins, as chief operating officer under Barber. Brearton had long worked with the studio as an advisor on deals.
There’s speculation Ulrich may take a more active hand in running the company with Barber’s dismissal. It’s not immediately clear what Ulrich’s move means for Barber’s key lieutenants including Burnett, who serves as president of TV and digital, or Motion Picture Group chairman Jonathan Glickman. Removing Barber from the equation also could be a precursor to a formal sale process for the studio. MGM has consistently denied rumors that it was on the block for the past few years.
The announcement noted that the Office of the CEO will have the “active support” of the board of directors, including members with extensive media and digital experience: Ann Mather, formerly of Pixar, Paramount Pictures and Disney; Fredric Reynolds, formerly of CBS and Viacom; Nancy Tellem, formerly of Microsoft/Xbox Studios and CBS; David Krane, CEO of Google Ventures; and James Dondero, CEO of Highland Capital Management.
Ulrich continued, “On behalf of MGM’s Board of Directors, I would like to thank Gary for his contributions and for leading MGM with the highest integrity over the last eight years. Gary has played a key role in the development and execution of our strategic plan, which laid an important foundation for MGM.”
MGM Holdings announced on Oct. 5 that it had extended Barber’s contract as chairman and chief executive officer of the entertainment company through December 2022. Barber and Birnbaum, formerly partners in film finance and production banner Spyglass Entertainment, were appointed co-chairmen and CEOs of MGM in 2010. Barber became the sole leader with Birnbaum’s departure in 2013.