Time Warner CEO snubs MGM

Business Week learns that Time Warner Chief Executive Jeff Bewkes has become the second media CEO in two days to pooh-pooh the value of Metro-Goldwyn-Mayer Inc., a struggling studio that is up for sale.

MGM is in the second phase of selling itself through a bidding process. The studio has a 4,000-title movie and TV show library, as well as half the rights to two future movies based on J.R.R. Tolkien's "The Hobbit."

Time Warner Inc., which owns the other half of "The Hobbit" and released "The Lord of the Rings" trilogy, has put in an initial nonbinding bid. Bewkes on Wednesday talked down MGM's value in what may be a negotiating tool.

Estimates put the value of MGM around $2 billion.

On Tuesday, News Corp. CEO Rupert Murdoch said he was being outbid for MGM and can be counted out, and that he also had no interest in buying Miramax Films from The Walt Disney Co.

QUESTION: Rupert said yesterday he was out of the MGM deal and had no interest in Miramax. Is Time Warner the one that drove them out and what your interest is in film libraries?

RESPONSE: "We don't comment on potential deals and we feel comfortable with our strategic position and scale before considering anything like MGM or any of those other libraries. So we don't need to do anything. We'll just continue to be disciplined and opportunistic about these things. Any deal, if we were to do one, would need to provide strategic benefits and a strong return in relation to other choices that we have. And you'd have to figure risk in figuring out what any returns would be on an acquisition."

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