December 28 : 2009
Bids on MGM expected soon
Variety reports that bidding for MGM will begin within the next few weeks. The article has a good rundown on the situation: what companies own shares in MGM currently, what assets the studio has, how much it owes, which studios are likely to bid, and so on.
MGM is still considered to be a co-financer of The Hobbit, the rights to which are one of the studio’s major assets. The most salient part of the article is this:
Speculation has focused mostly on Time Warner Inc. as a likely bidder, since it has over than $9 billion in cash from the recent spinoff of its cable systems and would regain full control over “The Hobbit.” Time Warner also owns the pre-1985 MGM library through its 1996 buyout of Turner Broadcasting and made an eleventh-hour bid in 2004 for MGM but was topped by an investor group led by Sony.
Time Warner owns Warner Bros., which absorbed New Line after its financial problems began. New Line is a distinct production unit and will be in charge of making The Hobbit. Still, Warner is the other co-financer on the film, so the simplest solution as far as the production of the two films is concerned would probably be for Time Warner to acquire MGM. The prospect of News Corp. (which owns Twentieth Century Fox) buying MGM and coming in on the project boggles the mind just a bit.



