MGM rub the pennies together to fund United Artists slate

27-Feb-2007 • Bond News

Metro-Goldwyn-Mayer Inc. is raising hundreds of millions of dollars to produce sequels to some of its most popular films, such as The Terminator and The Pink Panther, at a time Wall Street investors are eager to pay for movie making in Hollywood, the company's chairman said.

"We are putting together a fund to finance our franchise movies -- James Bond, The Pink Panther, The Terminator and The Hobbit," MGM Chairman Harry Sloan told reporters, explaining the financing may be raised in more than one single fund - reports Reuters.

The $60 million to $150 million it will take to make each of these movies "is a big enough number to merit bringing in outside investors and outside financing," Sloan said after a luncheon at the Boston College Executives Club.

The independent, privately-held motion picture, television home video and theatrical production and distribution company that counts Gone with Wind among its classic hits and has won more than a dozen Best Picture awards, is also in the throes of negotiating a financing deal for its United Artists unit and may look to arrange similar deals for other units, Sloan said.

The long moribund United Artists studio is being revived by actor Tom Cruise and his production partner, Paula Wagner, who own roughly 35 percent, of the 88-year old studio by four of Hollywood's biggest stars.

"I've always said that United Artists needs to have its own funding and stand on its own and have its own credit line. And that continues to be our goal," Sloan said, declining to give a time frame for when the new financing, will come through. "The announcement will come out when it comes out."

In the meantime MGM, largely owned by Providence Equity Partners, will pay for the slate of UA movies, Sloan said.

"We are financing "Lions for Lambs" a movie starring Cruise, Robert Redford and Meryl Streep that is already filming, Sloan said. Cruise, Sloan said, has agreed to defer his fees up front fees for the movie.

Looking ahead Sloan said it is possible for other of MGM's units to possibly stand alone at some point just like UA.

"MGM is a conglomeration of a number of brands like Orion and AIP and, while they are not as close (to standing alone) as UA, they are good subjects for talking about," he added.

Sloan said the time to raise money for independently made movies is right and that nearly every Wall Street investment bank is raising a fund to finance the industry and satisfy the public's voracious demand for new content.

"Given the demand for new content and that so much money is available to fund it, we will continue to create and arrange funding for independent entities," Sloan said. "The strategies for MGM to be mainly a distributor for independently made movies is our strategy."