June
8Has MGM's boss figured out the game?
When I first met Harry Sloan nearly three years ago, he was about to make his move to take over MGM. He seemed like a calm, thoughtful guy who was trying to figure out a complicated new game.
The last time I talked with him a couple of weeks ago, he reminded me a bit of Alex Yemenidjian, the former CEO of MGM, who thought he had it all figured out. He was mistaken, and his regime capsized.
The perceptive article by David M. Halbfinger in Sunday’s New York Times should remind Sloan that the entertainment business is intensely difficult to master. The piece depicts a company that boasts big plans for a new production program at a time when it is “choking on $3.7 billion in debt,” losing about $400 million a year and dependent on an aging film library that is surrendering the last of its guarantees from a video distributor.
The Times quotes Sloan as declaring that “we’ve begun the turnaround,” but it also points out that “bargain hunters are circling the company as it continues to bleed cash.”
Sloan has tried to create an optimistic aura around MGM by luring Mary Parent from Universal with a $6 million pay package and a mandate to produce as many as 12 MGM movies a year by 2010. Parent in turn has been blowing through several million dollars in book and script acquisitions.
Sloan also has a couple of his hoped-for tentpoles ready for liftoff, including “The Hobbit” with Guillermo del Toro directing. Warner Bros. likely will cash flow the picture at least through its early stages, which is good news for Sloan.
The MGM CEO remains confident that he can make it all work, but as the Times piece reflects, the community is casting a wary eye.
Since the 1960s a curious undertow has been in evidence at MGM. Whenever the company started to make progress, unexpected forces would bring it down.
Kirk Kerkorian had the perspicacity to sell the company whenever he sensed the downturns were about to occur, and he made billions through his good timing.
Harry Sloan might do well to study Kirk’s rule book.
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Peter Jackson is not directing The Hobbit - Guillermo del Toro is. Jackson is executive producing.<br><br>Your own fine publication has reported this. ;-)<br>*Corrected, thanks*
Posted by: John Whorfin | 6/9/2008 4:15:32 PM