My childhood just died

[Jeremy Blackman]

Sony Consortium Agrees to Acquire MGM[/b]

A consortium led by Sony Corporation of America and its equity partners, Providence Equity Partners, Inc., Texas Pacific Group, and DLJ Merchant Banking Partners, today confirmed it has agreed in principle to acquire Metro-Goldwyn-Mayer Inc. for $12 in cash per MGM share, plus the assumption of MGM's debt.

At the same time, Sony Corporation of America and Comcast Corporation announced that Comcast, Sony Pictures Entertainment and the equity partners in the MGM transaction have reached agreement on a broad programming and distribution arrangement. It will allow for the distribution of Sony Pictures' and MGM content on Comcast's video on demand platform, and for the creation of a joint venture, to be managed by Comcast, establishing new cable channels featuring Sony and MGM content. While this agreement contemplates consummation of the acquisition of MGM, the parties will proceed with Sony content on a stand alone basis for VOD under any circumstances.

In addition Comcast is considering becoming a minority equity investor in the proposed MGM acquisition.

JP Morgan is acting as lead arranger for all of the debt financing and CSFB is a co-underwriter. CSFB in addition to JP Morgan and Citigroup are acting as advisors to the consortium.

MGM owns a library of more than 4,000 films, which includes the "James Bond," "Pink Panther" and "Rocky" film series. Sony Pictures Entertainment already owns Columbia Pictures, Screen Gems, and Sony Pictures Classics.

[MacGuffin]

This Time It's for Real: Farewell to MGM
Source: Anne Thompson, Hollywood Reporter

It's very sad. MGM is gone. So is United Artists.

The deal, expected to close on Friday, for a consortium of companies (including Sony Corp (SNE.N).) to purchase the MGM assets for some $4.8 billion reminds us that in today's entertainment universe, it's all about selling DVDs.

Ted Turner was right: It's the library, stupid. All 4,000 titles.

Truth is, Metro-Goldwyn-Mayer -- the once-star-studded Tiffany studio that produced "The Wizard of Oz" and "Gone With the Wind" in 1939, and its United Artists studio, the great lotless indie founded in 1919 by Charlie Chaplin, Douglas Fairbanks, Mary Pickford and D.W. Griffith -- were long ago reduced to financial transactions. They had been dying little deaths for years.

So much history. So much talent.

We all have our fave MGM moments: Elizabeth Taylor racing her Pie in "National Velvet," Charlton Heston racing his chariot in "Ben-Hur," Judy Garland singing the trolley song in "Meet Me in St. Louis," Omar Sharif kissing Julie Christie in "Dr. Zhivago," the space shuttle twirling in "2001: A Space Odyssey," or Peter Finch exhorting New Yorkers to open their windows and yell, "I'm mad as hell, and I'm not going to take it anymore!"

MGM produced "Network" during the hard-luck '70s after billionaire Kirk Kerkorian had squeezed its assets to buy a series of hotels, slap them with the MGM brand and then sell them again.

He had shrunk MGM into a small production company whose pictures were released by the powerful United Artists.

Remember UA? Back then you could walk the halls at 729 Seventh Ave. in Manhattan and see posters for Billy Wilder's "The Apartment," Milos Forman's "One Flew Over the Cuckoo's Nest," Woody Allen's "Annie Hall," Hal Ashby's "Coming Home," Francis Coppola's "Apocalypse Now," Martin Scorsese's "Raging Bull" and Sylvester Stallone's "Rocky."

These were once mighty studios, packed with talented executives who knew how to nurture talent and release a full slate of movies every year, some of them bound for Oscar glory.

It takes years to grow a global production and distribution machine, which then thrives on forward momentum: Hits yield more hits; Oscars attract more Oscar-hungry stars and directors.

But it doesn't take much to bring these monoliths down. MGM's slide began when Kerkorian outbid Edgar Bronfman for the studio in 1969, cannily recognizing the value of the MGM brand.

Over the years, the library was packaged and repackaged, sold and resold. In the mid-'80s, Turner shrewdly bought MGM, then almost as quickly sold it, keeping MGM's pre-'86 library for himself, using it as a building block for Turner Network Television.

Over the years, the famed Leo the Lion MGM logo was plastered on hotels, airplanes and an ill-fated Las Vegas theme park.

At UA, troubles began when longtime chairman Arthur Krim and president Eric Pleskow sold their studio to Transamerica in 1979 after an unprecedented four-year run at both the box office and the Oscars.

But all it took was the megaflop "Heaven's Gate" for Transamerica to push them out (they went on to found Orion Pictures). As soon as hapless Transamerica insurance executive Andy Albrecht took over UA, the studio lost its best executives and floundered.

In 1981, Kerkorian grabbed the struggling UA for a song and merged it with MGM; nine years later, he sold the MGM/UA combined for $1.4 billion to shady Italian financier Giancarlo Parretti, who eventually wound up in jail.

In 1996, Kerkorian reacquired the studio for $1.3 billion and brought in business executives Alex Yemenidjian and Chris McGurk to build the value of his MGM and UA assets. This they did.

Their cinematic legacy includes the execrable remakes of "Rollerball" and "The Mod Squad" but also the hits "Barbershop," "Legally Blonde" and the Bond films "The World Is Not Enough" and "Die Another Day."

As Kerkorian finally closes his latest deal to sell MGM Inc. to the Sony consortium -- including Providence Equity Partners, Texas Pacific Group and DLJ Banking Partners -- for almost $5 billion, he will make billions; Yemenidjian and McGurk make millions.

Nobody knows quite what will become of MGM and UA. About 250 out of 1,400 employees will stay on, mostly at the home video company, while the rest cash their severance checks, switch to their home e-mail addresses and join their Miramax brethren sending out resumes.

The CD press kit for the upcoming "Amityville Horror" remake, complete with MGM mailing label, is starting to feel like a collector's item.

Sony will divvy up the outstanding MGM and UA titles for release through its divisions including Columbia, TriStar, Screen Gems and Sony Pictures Classics. If MGM continues to co-produce films with Sony, it's mainly to keep the library refreshed, insiders say.

The MGM and UA labels will still show up on surviving franchises like "The Pink Panther" whose latest incarnation starring Steve Martin arrives in September. (The "Pink Panther," James Bond and "Rocky" franchises originated at UA.)

But after 20 films and New Line's smash "Austin Powers" spoofs, it's hard to see much life left in creaky old James Bond, even if sexy, broken-nosed Brit Daniel Craig ("Enduring Love"), the press-anointed candidate of the moment, does don the famous tuxedo for Martin Campbell's "Casino Royale."

New Sony corporate chief Sir Howard Stringer originally wanted to acquire the MGM/UA library outright but was forced by his Sony bosses to seek partners.

Now that he heads the company, Stringer might eventually want to buy out the consortium to gain control over MGM/UA, which he could then spin off into a separate public company. MGM and UA already have had many lives.

Sir Howard could even decide to do the right thing. He could remove the Sony logo from atop the studio on West Washington Boulevard that many Hollywood insiders still consider the MGM lot -- with its Cary Grant Theater and Irving Thalberg, Katharine Hepburn, Mickey Rooney and Judy Garland buildings -- and let the MGM logo fly high again.

Anything is possible.

[pete]

they're talking about it like MGM was never a big corporation trying to make a lot of money.

[deathnotronic]

MGM owns a library of more than 4,000 films, which includes the "James Bond," "Pink Panther" and "Rocky" film series.

MGM sold the rights to all their old musicals, right?

I'm pretty sure I remember someone telling me they did.

I may be wrong. It's a shame they didn't even mention that they were the musical portion of Hollywood through the 50's.

[Jeremy Blackman]

MGM sold the rights to all their old musicals, right?

If they did, it was probably to Time Warner

[MacGuffin]

Disney Reviving Hand-Drawn Animation

The Walt Disney Co. is planning to revive traditional hand-drawn animation next year with its live-action/animated Enchanted, Disney watcher Jim Hill reported on his website today (Wednesday). A traditionally animated test sequence has already been created for the film by veteran Disney animator James Baxter, best known for his supervision of the character Belle in Beauty and the Beast, according to Hill. "And those who have seen this particular piece of rough animation say that it is 'simply stunning. A wonderful throwback to the sort of films that Disney used to make.'" Baxter, Hill said, has been secretly working on the sequence with a small crew at his own studio in Pasadena, and, he added, his work is likely to be displayed by Pixar's John Lasseter and Ed Catmull as they make their well-known case for reviving hand-drawn animation to Disney chief Robert Iger. Said Hill: "They're going to tell Iger: 'Doesn't that look terrific? People are really going to eat this picture up. They've been waiting for Disney to do a new film that features traditional animation. Which is why this movie is going to do HUGE box office next year.'"

[modage]

my childhood lives again!

[Ravi]

Modage's Childhood™ is a registered trademark of The Walt Disney Company. 

[Reinhold]

Modage's Childhood™ is a registered trademark of The Walt Disney Company. 

-------

i see where he's coming from, though. i think this is really great news.

[MacGuffin]

McDonald's and Disney Split

Presumably concerned about being linked with the supersizing of American kids, the Walt Disney Co. and McDonald's have ended their longtime promotional partnership, the Los Angeles Times reported Monday. The newspaper said that the studio's relationship with the fast-food chain will end following the summer releases of Cars and Pirates of the Caribbean: Dead Man's Chest. While the move was welcomed by critics of the fast-food industry, industry analyst Lowell Singer of S.G. Cowen told the newspaper: "Fast food has been a very important promotional partner in promoting films to children. ... As the animated marketplace gets more competition over the next few years, Disney will need to be much more aggressive and creative in reaching children though other promotional outlets."

[Ravi]

Free toy with every purchase of wheatgrass juice at Whole Foods?

[©brad]

mickey D's is in trouble, man. super-size me, fast food nation, and now disney wants nothing to do w/ them.

wtf is the big deal. i would never eat a salad or anything remotely healthy from mcdonalds. the whole point of eating there is to get your grease fix. why can't americans learn to consume that crap in moderation, like sugar or heroin.

[MacGuffin]

Disney Said to Be Considering Cost Cuts That Include Layoffs
By LAURA M. HOLSON, NY Times

LOS ANGELES, May 26 — Walt Disney Studios is expecting a big summer with the release of the highly anticipated animated film "Cars" and the next installment in the popular "Pirates of the Caribbean" series.

But not all is well in movieland — and changes are afoot. With a decline in DVD sales and the rising cost of making movies, Hollywood in general has been tightening its belt. And now Disney, as part of a long-term review, is contemplating layoffs, looking to rein in costs and rethinking the type of movies it wants to make at its live-action Disney Studios, according to people apprised of Disney's planning.

It is unclear how many positions will be cut and when. The studio has already pulled back from layoff plans twice. But now, some of those apprised of Disney's plans suggest layoffs could come in July.

Disney's review includes an overall repositioning of the Walt Disney Pictures brand as a home for somewhat daring (meaning PG-rated) family fare and ambitious franchises, including the "Pirates" trilogy and "The Chronicles of Narnia." Already Disney has scaled back production in the Miramax division and is expected to cut production at its sibling, Touchstone Pictures.

"They are going through a transition," said Frank Marshall, a producer who directed Disney's recent hit "Eight Below." "They are scaling back and looking at different genres of stories to do."

Disney's spokeswoman, Heidi Trotta, said studio executives declined to comment. "We are constantly evaluating our business to make it better and more efficient." she said.

Hollywood agents and producers have been expecting an overhaul since last fall when Disney's chief executive, Robert A. Iger, asked Richard Cook, chairman of Walt Disney Studios, to review the studio's production, home video, marketing and distribution divisions.

Disney had a humbling year in 2004 when it missed the mark on some of its adult-oriented live-action films, including "The Ladykillers," "The Alamo" and "The Life Aquatic With Steve Zissou." In 2005 Disney fell to No. 5 in domestic box-office market share bringing in $962 million, down from No. 1 in 2003, when it led with $1.5 billion in domestic ticket sales.

Some of the people apprised of Disney's plans, who requested anonymity because the review was continuing, estimate Disney could lay off 5 percent of the studio's staff, although that could climb to 10 percent. International distribution and home video are expected to be the divisions hit hardest, they said.

Mr. Cook said in a recent stock analyst meeting that Touchstone, which has released movies like the offbeat and quirky "Ladykillers," directed by Ethan and Joel Coen, and "The Life Aquatic" from Wes Anderson would release fewer movies.

With those films, Nina Jacobson, who oversees live-action movie production at the studio, sought to bring into the Disney family highly stylized filmmakers more commonly found at independent film studios, like Focus Features and Fox Searchlight.

Mr. Cook, speaking of coming Touchstone Films, told analysts, "We will be kind of picky on which ones we decide to make."

Mr. Marshall, who produced "Raiders of the Lost Ark" and "The Color Purple," said such movies were hard for Disney to market. "They stretched too far out of their comfort zone, not for them, but for the audience," he said. "It's tough for them to sell those movies that are out of the box for them."

By contrast, "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" from Walt Disney Pictures, which opened in December, was a certified hit. The tale of four young children battling an evil witch brought in $292 million at the domestic box office. It also gave the studio a much needed boost because it was one of the few bona fide blockbusters in recent years not produced by Pixar or Jerry Bruckheimer.

Since Disney first joined with Pixar on "Toy Story" in 1995, Pixar — recently acquired by Disney — has produced most of Disney's animated hits, including "Monsters, Inc.," "Finding Nemo" and "The Incredibles."

Mr. Bruckheimer, has been a steady supplier of live-action popcorn films as well, including "Pearl Harbor," "National Treasure" and the "Pirates" trilogy. He recently renegotiated his contract with Disney, a process that took two years, a person involved in the negotiations said.

"Disney is doing far better than before," said Richard Greenfield, a research analyst at Pali Research who has followed the studio for years.

In the April conference call, Mr. Cook said the studio would continue to tinker with its mix of movies, picking projects that can be marketed across all Disney divisions. Since Mr. Iger took over at Disney, such cross-marketing has been a high priority.

Disney "is the name on the door and when we do a 'Pirates of the Caribbean' or a 'Narnia' or a 'National Treasure,' it just lifts the entire enterprise up," Mr. Cook said. "It helps what our parks are doing. It's creating new characters or new stories."

But just because Disney is dabbling in PG fare, does not mean the studio will stray far from its traditional sensibilities. There still will not be much swearing, Mr. Cook said of Walt Disney Pictures movies. "We're not going to deal with sexual issues. But we are not afraid to take on the intensity or the fun or whatever. We can have a Captain Jack Sparrow in a PG-13 movie, but he's not doing anything that we think is inappropriate to be in a traditional Disney movie." (Captain Jack Sparrow is Johnny Depp's character in "Pirates.")

Whatever the changes, the studio is not expected to overhaul management. Twice already — in December and this month — layoffs were expected, but they were called off after studio executives said they needed more time to figure out who would be reassigned, the people said. In December, executives were waiting to see if "Narnia" fared well enough to spawn a sequel, the people said.

Both Mr. Cook and Ms. Jacobson recently renegotiated their contracts, these people said. And Mr. Iger has sought to bring executives even closer into his fold. Mr. Cook, who kept his office on the second floor of Disney's Burbank headquarters to be near his staff, recently moved to the sixth floor, where Mr. Iger and other division leaders are.

Mr. Cook is not expected to trim the studio's movie production staff, the people said. Instead it is their focus that will change. Mr. Marshall said it was unlikely the studio would do more sports-themed movies in the near future after the middling showing of "Glory Road," the tale of a basketball coach who inspired his team. Disney had success in recent years with the genre, including "The Rookie" and "Remember the Titans."

The studio is trimming individual movie budgets, too, although Mr. Cook told the analysts that the overall studio budget remained the same. Mr. Marshall said the budget for "Eight Below" was reduced by 30 percent before Disney agreed to make it. Initially, the studio "pulled the plug on the movie" because the budget was too high, Mr. Marshall said. When he later joined the project, Mr. Marshall said he agreed to a budget of about $40 million.

"I think they are going to be a little bit safer," Mr. Marshall said of the studio.

[MacGuffin]

Pixar's Lasseter Plans To Revive Hand-Drawn Animation

Hand-drawn animation may not be dead, after all. Pixar's creative chief, John Lasseter, has told Time magazine that he may restore Disney's traditional animation unit, which the studio dismantled in response to the success of computer-generated animation, like that employed by Pixar. "Of all studios that should be doing 2-D animation, it should be Disney," Lasseter said in an interview with film critic Richard Corliss. "We haven't said anything publicly, but I can guarantee you that we're thinking about it. Because I believe in it."

[jigzaw]

Put some of the story people from Pixar to work on a hand-drawn film and it may be good.  The last few hand-drawn Disney films really weren't very memorable, were they?