As many of you know, each spring I go off to Middle Egypt and do volunteer work on an expedition at the site of Tell el-Amarna. There I deal with the statuary fragments. I’ll be gone for four weeks. For internet access, all the members of the team share a single laptop with a pokey dial-up connection. I’m sure all sorts of news will break when I’m there (second script turned in? MGM’s situation resolved? film greenlit?), but I’m not sure I’ll be able to report or comment on it–though I’ll try! I trust TheOneRing.net and other sources to keep you informed. I’ll be back on the job at the end of April.

There are now only two bidders for MGM left. Yesterday it was announced that Lionsgate had withdrawn its offer, which was rumored to be lower than at least one of the others. Time Warner and Access Industries are the two remaining contenders. Neither has offered the $2 billion that those in control of MGM want as the minimum price.

According to Variety,

The news increases the odds that MGM’s 140 debtholders will blow off the two remaining bidders since their offers also have been described as well below expectations.

Instead, MGM could recapitalize through investment bank Qualia Capital with a cash infusion and a debt-to-equity transaction that would allow it to remain a stand-alone entity.

Lionsgate’s withdrawal comes with MGM debtholders split into two camps — one that wants to accept the best offer; and the other that wants to prolong the process in hopes of keeping the storied studio alive. A person close to the situation said MGM has asked its lenders to extend the forebearance on debt payments until mid-May.

[…]

MGM also said that it’s expecting to work with its lenders to extend the forbearance period for payment on its bank debt, which ends March 31. The lenders have allowed MGM to skip monthly debt payments since September.

MGM carries debts of $3.7 billion. It also plans to seek a forbearance agreement for its revolving line of credit, for which a payment is due April 8.

Variety announced today that MGM has received three binding offers in the second round of bidding for its assets. The studio will take a few weeks to consider them. No official announcements have been made about who tendered the bids, but the rumor mill has been saying that Time Warner, Access Industries, and Lionsgate are the three firms still on board the process.

MGM has revealed that it will request further suspension of the interest payments on its debt. The suspension, in place since September, is due to expire on March 31. A payment on a portion of the debt itself is due April 8, and the studio will request that it be suspended as well.

The story ends: “For Access, gaining control of MGM would enable owner Len Blavatnik to establish his company as a showbiz player. Lionsgate’s interest in acquiring MGM helped provoke a hostile takeover bid Friday by Carl Icahn, who insists that shareholders be allowed to vote on large acquisitions of this type. Lionsgate would be able to use the MGM library — which has more than 4,000 titles — to upgrade its own library. Time Warner would be able to obtain control over the James Bond and Hobbit franchises.”

So we should hear the results of the bidding process within a few weeks. If the bids are too low, however, MGM’s owners and debt holders may decide upon a route other than selling off the studio and/or its assets. Some sort of restructuring–or bankruptcy–would prolong the solution of the studio’s woes.

[March 23: Reuters is now reporting that the three bids ranged from $1.2 to $1.5 billion, and that Time Warner made the highest bid. (Time Warner’s delay in making its bid led to the delay from a Friday to a Monday deadline. The question now is whether MGM’s owners and debt-holders will settle for $1.5 billion when they had been hoping for at least $2 billion. If not, they’ll try refinancing and/or bankruptcy.]

Variety reports today that the deadline for second-round bids in the MGM auction has been pushed from Friday, March 19 to at least Monday, March 22 and possibly beyond. No indication yet as to whether any of the three remaining bidders, Time Warner, Access Industries, and Lionsgate, have actually submitted bids.

It seems quite possible that even if they do bid, the amounts won’t satisfy MGM’s owners. If so, this is what the Variety story says might happen:

If bids fall short of expectations or no bids materialize, MGM could attempt a recapitalization through investment bank Qualia Capital through a cash infusion and a debt-to-equity transaction that would allow MGM to remain in business as a stand-alone entity.

Since turnaround specialist Stephen Cooper came on board as chairman, the debt holders have agreed three times to hold off on receiving debt payments, with the most recent extension going to March 31. MGM’s facing repayment of its $250 million revolving credit line in early April and a $1 billion payment on its $3.7 billion debt in July 2011.

Though this story doesn’t mention it, Rupert Murdoch’s News Corp. has been mentioned as a possible source for a recapitalization.

The media have created a lot of fuss over the past few days over the “June” and “July” dates posted on McKellen.com’s Hobbit entry as the start of shooting for the film.

Today the date of filming in that entry was changed to “at a time to be announced.”

Thus we are back to more-or-less where we were in December, waiting for a greenlight and some official announcements. I must say that this is why I try to avoid posting speculations on casting and start dates and so on. The July date seemed significant, but the official word will ultimately have to come from the studio.

Today is the deadline for the second round of bidding for MGM. Variety has published a good summary of the situation. Here’s the most relevant portion:

Debt-laden MGM invited a half-dozen suitors last month to participate in a second round of bidding, which included allowing those that qualified to pore over MGM’s internal financials. Though no one has announced a formal bid, the most likely candidates are Time Warner, Lionsgate and Len Blavatnik’s Access Industries.

People close to the situation believe Access has indicated it is willing to make an offer of as much as $2 billion. Lionsgate’s offer is pegged in a range between $1.4 billion and $1.8 billion while Time Warner’s offer is expected to be in the $1.5 billion range. Potential bids by John Malone’s Liberty Media and Ryan Kavanaugh’s Relativity Media with hedge fund Elliott Management aren’t expected to materialize.

Each bid contains unique challenges. Access would establish itself as a showbiz player but would likely sell off MGM’s rights to the James Bond and “Hobbit” franchises. Time Warner, sitting on a wad of $5 billion in cash from the recent spinoff of its cable systems, would be able to fully exploit Bond and “Hobbit” (which it is already co-producing through New Line) but probably has little use for the 4,000-title library. Lionsgate, which has historically grown partly through library acquisitions, isn’t set up to do tentpoles such as the Bond movies and would likely seek a partner or sell off the franchises.

The submission of binding bids means that MGM will meet within the next week or so with its debtholders to sort out what to do next. Possibilities include picking one of the offers, starting a third round of bidding or going the route of recapitalizing. A recapitalization bid could bring investment bank Qualia Capital or News Corp. into the picture.

Qualia, operated by former Artisan exec Ken Shapiro and Amir Malin, is believed to have proposed a combination of a cash infusion and a debt-to-equity transaction that would allow MGM to remain in business with its existing management. The Lion has said that one of its options for dealing with its crushing $3.7 billion debt load is to find a partner or remain a stand-alone entity.

It’s uncertain if the numbers being bandied about as the price for MGM assets — which include MGM and United Artists names and logos and MGM’s TV operations — will be high enough to meet expectations of the 140 MGM debt holders. And since MGM’s privately held, there’s no specific sale deadline as long as the debt holders go along.

Since Cooper came on board, the debt holders have agreed three times to extend the debt payments, with the most recent extension going to March 31. MGM’s facing repayment of its $250 million revolving credit line in early April and a $1 billion payment on its $3.7 billion debt in July 2011.

One bit of important news here is that the bidders seem to be down to three, while five or six had been invited by MGM to submit bids. Time Warner is one of the three. It sounds as though even if one of the other bidders actually buys MGM or its assets, it might be willing to sell the Hobbit rights to Time Warner.

I had not expected a third round of bidding to be a viable option, since none of the firms still in the process seems to want to go over the $2 billion that seems to be the minimum amount MGM is expected to find acceptable. With so few bidders still in the game and none of them likely to go much higher, a third go-round seems unlikely to benefit MGM.

Since my last post, the entry on The Hobbit in McKellen.com filmography has changed. Instead of predicting a June date for filming, it says July. Given that the brief run of Waiting for Godot in Wellington ends on July 2, it’s looking more as if the play’s tour has been timed to allow Ian to be on the spot just in time to don his Gandalf the Grey costume. Let’s hope.

The Dominion Post, Wellington’s local newspaper, has posted a short item on its website. It announces that:

Though the cast for Rings prequel The Hobbit has yet to be officially announced, Sir Ian has said that he will reprise the role of Gandalf the wizard and expects shooting to begin in June this year.

While in Wellington, Sir Ian will also perform in Samuel Beckett’s classic play Waiting for Godot at the St James Theatre from June 30.

I think some people are interpreting this to mean that Ian has just announced that The Hobbit will start shooting in June. My impression is that that information has been posted in his filmography on his website for some time now. (Did anybody notice when that date was added?) The entry also says the first script is finished and the second progressing, that Guillermo del Toro is in New Zealand, and so on, all information we have known for some months now. The release date is given as 201?, which suggests no breaking news.

The main point of the article is that Ian will be playing in Waiting for Godot in Wellington for four performances only, June 30 to July 2 at the St. James Theatre. That sounds as though it’s timed to allow Ian to be in New Zealand during June–but in fact he’s going to be performing the same play in Sydney’s Opera House from June 15 to 27.

Of course, there could be some filming involving Gandalf earlier in the month, or after the Wellington run, in July. But whether Ian’s scheduled presence in the Antipodes this summer is timed to coincide with the commencement of Hobbit shooting or is just a coincidence remains to be seen.

Having seen Godot during its first London run last June, I heartily recommend it to fans in Australia and New Zealand!

[March 17: Actually, Waiting for Godot is touring Australia beginning with Melbourne, May 6-23, then Perth, May 28 to June 3, on to Adelaide, June 9-11, and ending in Sydney, June 15-27. So no shooting involving Gandalf will go on during that period, it seems fair to assume. Not to say that there couldn’t be filming with other characters, but we just don’t have any information.]

According to an article posted on Stuff.co yesterday, the habit of calling the Miramar Peninsula (or Wellington in general) “Wellywood” is about to become official. Wellington Airport, which is 34% owned by the Wellington City Council, will erect its own version of the famous Hollywood sign in a position where people on incoming flights can see it. (Those that land from the north, anyway.)

This is an artist’s depiction of what the sign, scheduled to be erected in June, will look like. For those who know Wellington, this view looks more or less east across Evans Bay, over which incoming flights pass. (If you’re traveling to Wellington, try to get yourself a window on the left side.) The old headquarters of 3 Foot 6 is off to the right a short distance, and on the other side of this ridge sits the Stone Street Studios. The airport owns the land on which the sign will sit.

Peter Jackson said of the sign, “It’s Kiwi tongue-in-cheek humour at its very best, but beneath the leg-pulling is genuine pride. Several of the most popular films ever made were form in Miramar. Within a mile of the sign is the birth place of Middle-earth and Pandora.” (That mile would include Park Road Post and Weta Ltd. as well as the studios.)

Mayor Kerry Prendergast (whom readers of The Frodo Franchise will remember as one of my interviewees) said, “The sign will be one of the first things people will see when they arrive in Wellington. They will be left in no doubt that this is the heart and soul of New Zealand’s film industry.”

A mere 44% of 9000 residents polled by Stuff.co in an online survey approved of the sign, and the comments on the story are mostly negative. Some don’t want the sign as part of the view, and some object to the expense (an undisclosed sum) in a bad economic situation. Still, as the story points out, the film industry pumps about $285 million (NZ dollars) into the city’s economy, and that doesn’t count the tourism benefits. About 100,000 people are reported to have visited the Weta Cave last year.

[March 11: More controversy on the already controversial sign. The New Zealand Herald reports:

Wellington mayor Kerry Prendergast has said local movie mogul Sir Peter Jackson was adamant it should be “an exact copy” of the Hollywood sign.

However, Hollywood Chamber of Commerce president and chief executive Leron Gubler said the staggered Hollywood lettering was trademarked.

“If they do that with the Wellywood sign then I would think that would be a violation of our trademark…I am checking that with our attorney,” he told The Dominion Post.

Wellington Airport said it a statement yesterday: “We are confident we will meet all our legal obligations in relation to the sign.”

I for one hope they can go ahead with the project. Of course, I don’t have to look at the sign on my daily commute. On the other hand, that area is already disfigured by smaller but noticeable signs warning pet owners about poison set out to combat the pesky local possums (unless those have been taken down since my last visit). ]

[March 18: I’m getting pretty tired of the “Hitler is angry” reworkings of the scene in Downfall where Hitler erupts in a savage tirade. It’s just too easy to adapt to any situation by adding a bunch of subtitles unrelated to what’s actually being said. But I have to admit,  “Hitler is angry about the Wellywood sign” is pretty funny. Lots of in-jokes for those who know the city, including a couple that mystified me. There are also references to the giant Gollum that climbed over the airport for a few years and to the lengthy epilogue of The Return of the King. (Thanks to Harriet Margolis for alerting me to this clip!)

Celebriel over on TheOneRing.net alerts us to the fact that there are new bobbleheads of LOTR characters coming out, apparently timed to coincide with the Blu-ray release of the theatrical version of the trilogy.

Lots of people don’t like bobbleheads, especially people outside the U.S. who aren’t familiar with the concept. (I discuss the original bobbleheads briefly on p. 196, where I quote Ian McKellen on his destruction of the Gandalf the Grey bobblehead he was sent.) more »