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Time Warner, the world's biggest media company, were named
the favourites to take over MGM by industry experts up until
yesterday, when the media giant pulled out of the race and
took their $4.6 billion offer off the table after Sony sweetened
it's proposal.
MGM, the 80-year-old studio that owns the James Bond movies,
said that the unit of Japanese electronics giant Sony Corp
would be joined by Providence Equity Partners Inc., Texas
Pacific Group and DLJ Merchant Banking Partners. Sony said
it had reached a separate agreement with the top U.S. cable
TV operator, Comcast Corp. for Comcast to offer Sony and
MGM movies over its video-on-demand systems and on new cable
channels that it would form with the Sony group.
"We are very pleased with these new content agreements,
which confirm the value of our scale and distribution platform,"
said Brian L. Roberts, Chairman and Chief Executive Officer
of Comcast Corporation. "This represents our first major
studio deal for VOD content and will enhance the attractiveness
of our VOD platform. The agreement also provides us with
some very interesting channel creation opportunities."
"This will obviously help diversify earnings and it's an
important library, an important source of content," said
Marc Desmidt, head of Japanese equities at Merrill Lynch
Investment Managers in Tokyo. "But I've got no idea (right
now) if they've overpaid or not -- whether it's the right
price."
MGM's film library is considered an industry gem, generating
a stream of revenue in the DVD market. Sony could also harvest
the MGM library for sequels, and MGM's trademark Leo the
Lion is a globally recognized brand. Including the titles
owned by Sony Pictures Entertainment, the Sony group will
now control about 40 percent of all movies ever produced
by Hollywood, according to some estimates.
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What Does This Mean For
007?
Ongoing MGM film and television productions are
expected to complete "as is", but the MGM brand
will be retired on any new projects after 2005.
Trade paper Variety has reported that the "James
Bond franchise will be negotiated under a separate
deal with the Broccoli family" and the Bond
series will be handled uniquely, still releasing
films under the familiar "Leo The Lion" roaring
MGM logo.
Despite most 007 fansites reporting the deal as
done, the MGM board still have to sign-off on the
buy-out, which could take a further two weeks. Worse
still, sources believe that the deal will take about
six months to close because of legal constraints;
until that time MGM and Sony must operate separately.
As Bond 21 could be considered a "new production",
official announcements on the film may now be stalled
until the Sony deal has been completed.
Due to Sony's past interest, and attempts to create
a rival James Bond series, industry watchers expect
the studio to give 007 a new lease of life for the
21st century. MGM granted "Die Another Day" a reported
budget of $142m, whereas Sony has been known to
splash around even larger cash sums, such as $200m
for "Spider-Man 2". Contrary to earlier reports
that Bond 21 was to have a smaller production than
"Die Another Day", sources say Sony are likely to
bank-roll an even bigger budget for 007's next adventure.
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