Will THE HOBBIT save MGM? I guess they’re counting on it. We told you about MGM’s financial woes last week. The short of it is that the 85 year old studio is about $3.7 billion in the hole.

Last week, we reported that bondholders were considering letting the company go bankrupt and selling off the assets to cover the debt. THR reports that “a recent proposal by MGM’s new CEO Steve Cooper to defer interest payments on its debt load for the next three months on Thursday won a crucial endorsement from J.P. Morgan.” MGM has three months where they won’t have to pay interest payments ending in mid-December. THR also reports that “the move to delay interest payments until Dec. 15 wasn’t motivated by any immediate fears of insolvency at MGM, as a recent company audit showed cash flow should be sufficient to keep the lights on for at least another year.”

The studio needed $150 million to see them through the year and to begin production on THE HOBBIT. So I’m guessing they have at least that much stored away and it appears that they are banking on (no pun intended) THE HOBBIT to be a huge money generator. The report lends (again no pun intended) that keeping the film in development will be good for MGM as “keeping its 50% hold on HOBBIT would bolster interest in bidding on the Lion.”

The first installment of THE HOBBIT is intended for theatrical release in 2011, with Guillermo del Toro on board to direct. Two HOBBIT films are currently in the works. Peter Jackson, Fran Walsh, Philippa Boyens, and del Toro are all writing scripts for both films.