MGM to be rescued by another studio; future projects at risk?
In times of economic hardship, every industry feels the pain. One example of the depression in the entertainment industry lies with MGM Studios. MGM has fallen on hard times and is seeking a buyer. We're not really sure whether this means that the buyer will simply acquire the company and its assets or if whoever purchases it will keep it running as a standalone company. More information, as well as my informed economic analysis, after the jump.
Among the interested buyers are several familiar names. Lionsgate Entertainment Corporation is expected to still be in the running, though analysts don't expect the smaller company to match Time Warner's massive bid which is rumored to be around $1.5 billion. MGM has been seeking a $2 billion bid in order to stave off its estimated $4 billion in debt.
Buyers are particularly interested in MGM, as it has a large library of films under its belt including a few future projects that could prove financially viable. Of course, one of the more bankable franchises out there, the James Bond series has been a major draw for outside companies. Also of major importance is the upcoming adaptation of Tolkein's The Hobbit. MGM's latest release is the buddy comedy, HOT TUB TIME MACHINE which hits theaters this Friday.
So what does this mean for movie geeks? Well, nothing just yet. If MGM can't find a buyer that meets its needs, it may have to file for prearranged bankruptcy. Now, I'm not a financial professional, but I assure you that such a move would be disastrous for the company. If MGM were to file for prearranged bankruptcy, its creditors would take over operations in order to recoup the debt owed. This could definitely place future MGM projects, including the next Bond movie under Sam Mendes, as well as THE HOBBIT, in danger.
Seeing MGM bite the dust would be a sad day for cinephiles everywhere, as they've always shown a commitment to funding some of the better films out there. The latin phrase atop their logo, ARS GRATIA ARTIS, means "Art for Art's Sake." Needless to say, any company which features this saying so prominently shouldn't have to leave the industry.
Source: Associated Press
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