Lion limps away
MGM-Sony deal finalized
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Seven months after a consortium of investors led by Sony paid $4.8 billion to acquire the Lion, the deal has officially closed.
The Lion now exists as a privately held company whose primary function is to exploit a valuable 4,000-title library and co-produce a small number of film and TV projects with new parent Sony Pictures.
Two members of MGM's creative ranks are jumping to Sony: exec VP of production Elizabeth Cantillon and creative exec DeVon Franklin. Cantillon, who has a long relationship with Sony film topper Amy Pascal, will manage MGM's development assets. The role of Franklin, a young exec who worked on the MGM films "Be Cool" and "Beauty Shop," is less clear.
The actual transition will take place over the next few months, but many MGM employees began sending change of address emails last week.
About 250 staffers, of about 1,400, will remain at the Lion under former chief financial officer Dan Taylor, now prexy.
The rest will begin collecting their severance pay and stock options and will exit in waves over the next several weeks, starting today.
About 100 staffers will say goodbye to the Lion this week.
On Friday MGM chairman-CEO Alex Yemenidjian and vice chairman-chief operating officer Chris McGurk resigned and left with multimillion-dollar severance packages.
Exiting MGM this week are the film production and physical production divisions, which have been largely idle since January, as well as top-tier management.
More leaving May 2
Another, more substantial, exit wave will follow May 2. A final wave is scheduled for June 1.
MGM's film marketing and publicity groups will be the last to go, as they must finish up campaigns on the remake of "The Amityville Horror," which unspools Friday, and two put pictures acquired by MGM when it bought Orion: "Madison" and "Jiminy Glick in La La Wood." Those limited-release films will bow April 22 and May 6, respectively. A team will also be retained to handle the marketing transition of MGM films to be released by Sony, such as "The Pink Panther" and "Into the Blue."
The nearly two dozen producers who had production deals at MGM and United Artists were told that their deals would be assumed by Sony until the end of their contracts. Although this had been in the wind, producers on Friday said they were relieved to know for sure that they would not have to start packing boxes yet.
Sources say the mood at the Lion on Friday was mostly somber, with some tears, but that some seemed relieved that the process was finally over. Though not everyone leaving has a job lined up, most are receiving generous severance packages. Some people took long lunches, while others scooted out of MGM's Century City tower early. Some spent the afternoon packing boxes.
For what's left of MGM, it's mostly about DVDs, TV and videogames now. That was confirmed by the senior management the company announced Friday, all of whom are dedicated to managing the Lion's library in different media.
Jim Packer, exec veep of television distribution, will remain in his role selling MGM content on TV. Blake Thomas moves from exec VP of worldwide marketing to exec VP of home entertainment, handling the Lion's lucrative DVD sales. Bruce Tuchman stays atop MGM Networks, which distributes studio content on its own channels in nearly 120 territories around the world. And Travis Rutherford moves from VP of consumer products and interactive to exec veep of consumer products and location-based entertainment, handling licensing deals such as the successful "James Bond" vidgame series.
Charles Cohen, who previously worked under Taylor as exec VP of finance and corporate development, will be the new prexy's top deputy. He's taking the title of executive vice president.
'Exceptional legacy'
"With our strong financial and strategic partners, we look forward to building on MGM's exceptional legacy and capitalizing on emerging technologies and markets to provide consumers worldwide more opportunities to enjoy the world's largest modern library of films and television programming," Taylor said in a statement, emphasizing that the library is now where it's at for MGM.
Once MGM's downsizing and reorg is complete, private company will be housed in one office. It hasn't yet been decided if that will be in the studio's Century City headquarters, its Santa Monica office, or somewhere else. In the meantime, though, the Sony-led consortium has reportedly hired a real estate agent to sublet some of the space Lion leases in Century City.
TV presence
MGM will still have a presence in the TV world, overseeing its "Stargate" skeins on Sci Fi and using a small staff to develop new shows that it will most likely co-produce with Sony. Execs will also focus on mining the MGM library for TV ideas, such as a "Legally Blonde" series that is in development.
It's unclear what role MGM will have in film production beyond co-financing a small slate of films each year with Sony. It hasn't yet been determined if the Lion will have any of its own employees to work on new pics or will cede that responsibility entirely to Sony.
The announcement Friday marked the end of what has been a fairly swift process that began when a consortium of investors led by Sony and including Comcast, Providence Equity Partners, Texas Pacific Group and DLJ Merchant Banking Partners swooped in and outbid Time Warner with a $4.8 billion offer for MGM.
There is talk that Sony chairman Howard Stringer may ultimately buy out the minority investors in the deal and spin off a merged operation of Sony Pictures and MGM as a public company, but this idea has never gone beyond the discussion stage.
Whatever lies ahead, the histories of MGM and United Artists are perhaps the most storied in Hollywood. United Artists, which was bought by MGM in 1981, was formed by Charlie Chaplin, Mary Pickford, Douglas Fairbanks and D.W. Griffith in 1919 as a studio to be run by and for artists. It later became home to Woody Allen and spawned the James Bond and Pink Panther franchises, both of which will live on through Sony.
MGM, founded in 1924, gave the world such classics as "Gone With the Wind" and "The Wizard of Oz," both released in 1939.
