Spyglass duo mull MGM do-over, deal could still fall apart

12-Aug-2010 • Bond News

The proposal under which Spyglass Entertainment's Gary Barber and Roger Birnbaum would take the reins of troubled MGM is sparking talk in Hollywood that the Lion would likely shutter its domestic theatrical distribution operation if the Spyglass deal comes to pass, reports Variety.

Majors that are a natural fit to handle theatrical distribution for a pared-down MGM include Paramount and Sony, although 20th Century Fox already handles worldwide home entertainment distribution for MGM as well as international theatrical distribution.

For MGM creditors, the appeal of a Barber-Birnbaum team is the duo's track record of working closely for more than a decade with most of the majors, co-financing and co-producing an array of titles. Spyglass also has produced its own films.

Barber and Birnbaum could continue in the same vein at MGM. Among MGM's more lucrative film franchises, Warner Bros. already has domestic distrib rights to "The Hobbit," while Sony distributed the past two James Bond pics for MGM -- though it's possible another studio could become the new Bond distrib for the Lion.

Insiders say one blueprint under discussion is for the newly configured MGM to make four to six films a year. With that volume, it wouldn't make sense to maintain a theatrical distribution operation or a full-fledged marketing division.

Shutting down MGM's distribution operation and dramatically trimming the Lion's marketing unit would save millions in overhead, a plus for creditors looking to resolve the company's $4 billion debt load.

Barber and Birnbaum launched Spyglass in 1998 after inking a five-year distribution deal with Disney. After the Mouse House relationship ended, Spyglass began working with most of the majors.

In recent years, Spyglass has become particularly close with Par, co-financing and co-producing J.J. Abrams' "Star Trek," as well as "G.I. Joe: The Rise of Cobra."

Unlike other majors, Paramount would appear to have the capacity to accommodate four to six titles a year. Par has adopted a lean-and-mean approach of releasing fewer of its own movies and relying on slate distribution deals, such as those with Marvel Entertainment and DreamWorks Animation. Its DWA pact is up in 2012.

MGM and Sony have a close relationship after working together on Bond pics, which Sony distributed. Spyglass has also teamed with Sony several times, as well as with Universal, with which it worked on this summer's comedy "Get Him to the Greek."

In addition, Spyglass is no stranger on the Fox lot, having teamed on films including "27 Dresses."

One wild card is MGM's home-vid deal with Fox, which is up next year. That could become a negotiating point for any domestic theatrical distrib deal MGM strikes with another studio. Ditto for Fox's international theatrical distribution pact with MGM.

Because of all the creditors involved, knowledgeable sources stressed that the Spyglass/MGM negotiations could still fall apart.