Could “The Hobbit” franchise AND James Bond be heading to Warner Brothers or Sony?
Ooooh, what a fascinating story….
First off, full plugs and credit for this story to Nikki Finke over at Deadline Hollywood.
Here’s the link to her story:
MGM Makes Phone Plea to Bondholders
Ok, so what’s the gist? Here’s your MediaViewer view in a nutshell.
MGM wayyyy overestimated its profits this year, and as it turns out they don’t have enough money to cover their current costs and production calendar (they need about $165 million).
PLUS, they’re already $3.5 BILLION in debt to creditors.
So, MGM decided to have a little conference call with their bondholders and creditors. And from the rumors, it was a very vocal call, lasting anywhere from 2 1/2 to 6 1/2 hours. The call was basically to ask creditors to waive interest payments on their debt until February of 2010. But since the company’s so in debt to begin with, the creditors ain’t so happy to miss out on that dough. This, in turn, has raised the ire of the bondholders, whose stock is already worth almost half of what is was went it went public. So, they say, if the creditors won’t forbear payment, then let the company go bankrupt. That way, they’d get their money first and get a somewhat better return on their investment.
MGM, of course, thinks this is the worst possible outcome. By going bankrupt, they’d automatically lose control of the James Bond franchise, which has become a huge moneymaker with Daniel Craig. They’d of course lose out on “The Hobbit” films, which stand to generate $2-3 billion on their own in ticket and DVD sales.
I’m inclined to think that the creditors will eventually relent. With Bond and “The Hobbit” guaranteed moneymakers, they’d be foolish not to. Of course, the situation does make MGM ripe for a takeover bid. But who’d be big enough to assume that much debt?
Enter Warner Brothers (Time Warner) or Sony. Finke speculates in the article that if MGM went up to auction, it would fetch maybe $1.8 billion. Either of those two companies would sign that check in a heartbeat to get those two franchises.
Regardless, it’s hard to tell what effect this will have on Bond and Hobbit. Both are scheduled to start up production next year (which in movie studio terms is like saying tomorrow).
If there’s a delay in getting these films out, I’m fine with that. What I don’t want is MGM pinching pennies or rushing the process to push out substandard products to make the quick, albeit lucrative buck.
What do YOU think?
