Today the Los Angeles Times reported that Lionsgate has taken a step toward a possible merger with debt-ridden MGM:

Independent studio Lions Gate Entertainment’s chief executive, Jon Feltheimer, and vice chairman, Michael Burns, on Tuesday made a formal merger presentation to the steering committee of creditors overseeing the future of struggling studio Metro-Goldwyn-Mayer, people familiar with the situation said.

The meeting marks a major step forward for the two sides since they started to engage in merger talks last month.

The meeting comes just days after Lions Gate agreed to a 10-day detente with activist investor Carl Icahn, who owns 37.3% of the movie and television studio and launched a hostile takeover of the company. The parties agreed that during the truce they would jointly explore potential mergers and acquisitions.

As the story points out, there are all sorts of problems with this proposal. Icahn, Lionsgate’s largest stockholder, objects to such a move, and Lionsgate has about half a billion dollars worth of its own debt.

Still, as far as I know, this is the first formal plan of any sort to be offered since the round of bidding for the acquisition of MGM fell short of the creditors’ demands (though Time Warner’s reported bid of $1.5 billion remains on the table).

Variety has a shorter story on the meeting, adding its own take on the situation:

Neither company confirmed the talks, first reported Tuesday by the Los Angeles Times, but a knowledgeable source indicated that a meeting had taken place.

MGM’s expected to announce a sixth extension of payments on its $3.7 billion in debt on Wednesday when the current extension expires.

Liongate has been in informal talks about an MGM-Lionsgate merger in recent weeks. A combined MGM-Lionsgate would include a library with more than 7,000 titles and the ability to produce and distribute MGM titles — such as new James Bond movies and the two “Hobbit” films, which MGM co-finances with New Line.

At this point, all this remains unconfirmed, but it could suggest that some movement may actually be occurring.

(The studio’s name is Lionsgate, not Lions Gate, as written in the LA Times story.)

You probably have read this news on TheOneRing.net itself. Still, since Xoanon was kind enough to send me the official press release, I’ll pass it along:

We have been spreading unofficial rumors that TheOneRing.net would be presenting a panel at Comic-Con but the official website confirmed it today: At 10:30 a.m. on Thursday, July 22, in room 7AB founder Calisuri, the incomparable Quickbeam and fan advocate MrCere will present the latest unofficial new about ‘The Hobbit’ movies and everything else there is time for. Guests possible but not promised. If you haven’t heard, returned tickets are now available to the general public from the previously sold out Comic-Con. TORn will also be sharing space with Weta at the Dark Horse booth (#2615) and selling really cool shirts! We hope to see you there.

I was lucky enough to participate in the equivalent panel with these same worthy gentlemen two years ago and thoroughly enjoyed the experience–that and meeting John Howe and signing copies of The Frodo Franchise. I’d love to be there again, whether on the panel or in the audience. ‘Tis not to be this year, though I hope next year there will be official Hobbit hype beginning at Comic-Con, and maybe then I’ll get myself out to San Diego to observe and report.

If you have or can manage to get hold of a ticket, do get in line early for the TORN event. It fills up quickly!

Variety reports that, as expected, MGM today asked its approximately 140 creditors for a sixth extension of its principal and interest repayments, which are due July 14. The situation remains pretty much as it was, with MGM rumored to have talked with Lionsgate, Summit, and Spyglass as to whether one of them might partner with the studio to restructure it. Its current debt is $3.7 billion. Time Warner’s bid of around $1.5 billion to buy the struggling company remains on the table.

The new move was expected. I was interested in this comment, though: “Peter Jackson’s been in talks to take over as director for the two “Hobbit” films in the wake of Guillermo del Toro departing. Co-financer has denied del Toro’s assertion that the delays in getting a “Hobbit” greenlight were due to a lack of a resolution to MGM’s ownership situation.”

“Co-financier” here must mean Warner Bros. New Line, now a production unit under Warner, has been denying all along that the Hobbit delays are connected to MGM’s financial woes. I’ve been skeptical all along that Warner Bros. would get itself into a co-production deal with MGM, already known at the time as a company in trouble, without building all sorts of contingency arrangements into the contract. Maybe I’m sticking my neck out too far here, but I still think that whatever happens to MGM, The Hobbit will get made. There may be other causes for the delay that we know nothing about.

On July 1, The Dominion Post (Wellington’s newspaper) ran a story about the friendship between Guillermo del Toro and Ian McKellen. I suppose this story has been linked elsewhere, but I didn’t see it on TORN, so I thought I’d mention it. It’s partly about how Ian is staying at Guillermo’s 2nd house, his “man cave,” in Wellington, while performing in Waiting for Godot.

Ian also let drop one crumb of information: “He understood Sir Peter Jackson was in Britain casting for The Hobbit, while negotiations continued on who would direct the two-part film in Wellington. Though nobody has been officially cast in The Hobbit, Sir Ian and Andy Serkis, who plays Gollum, have said they will star.”

I suppose this statement has to be regarded as a rumor until we get some sort of confirmation, but it’s more hopeful than the other information, also mostly rumors, that I posted about yesterday.

By the way, the brief clip that accompanies the story makes no mention of The Hobbit.

Over the past several days there have been some hints that the Hobbit film project is not only being delayed but that there is a serious possibility that it may be abandoned.

On July 1, The Hollywood Reporter ran a story saying that MGM will request a sixth extension on its current July 15 deadline for a payment of $250 million principal payment on its debt, as well as $200 million in interest. The request would come about a week before the deadline. One bit of news here is that MGM might end up selling its rights in The Hobbit:

Meanwhile, speculation continues about whether the studio will sell off its share of rights to “The Hobbit” to co-production partner Warner Bros., whose New Line is overseeing project development with director Peter Jackson; shooting is set to begin in January. MGM executives would like to hold onto its share of the “Hobbit” rights as long as possible, but some lenders are lobbying for a sell-off to raise funds.

The story also points out that although a sale of MGM has seemed unlikely, Time Warner still has a pending bid in: “Before its restructuring talks, MGM held an auction that drew a handful of underwhelming offers to buy the studio outright. Warners placed a top bid of $1.5 billion that was deemed too low by lenders but remains on offer.”

I would think that allowing the Hobbit project to fail would cause a pretty serious decline in MGM’s value, since its share in the rights to the novel’s adaptation is one of its main assets. MGM’s owners reportedly have been holding out for a bid of $2 billion before they would consider selling–but maybe the studio wouldn’t be worth that if there were no Hobbit on the horizon. (Presumably no potential buyer thinks that even with the Hobbit project the studio is worth $2 billion, since no offer approaching that was forthcoming.)

On July 3, Ian McKellen caused a stir by mentioning on a morning talk show in New Zealand that he is not firmly committed to playing Gandalf. (The interview is posted on TheOneRing.net.) Further delays might cause him to move on to other projects: “Frankly, I would like to race after doing Waiting For Godot, get on with doing another play but we’ll have to see. I don’t give the producers the impression that I’m sitting waiting.”

Today stuff.co.nz posted a story about how the lack of major film projects in Wellington is causing some filmmaking talent to move elsewhere, notably to long-term contracts on television projects in Auckland. It includes this interesting quotation:

Jackson’s spokesman, Matt Dravitzki, said: “We are working very hard to get The Hobbit made.

“In the event that The Hobbit did not go ahead, [Jackson's] Wingnut Films has a number of other projects in development. Tintin is currently in post-production at Weta Digital and the second Tintin film will be shot in Wellington in the future.”

That might be of comfort to people in Wellington who need filmmaking jobs, but it certainly sounds ominous to those interested in seeing The Hobbit get made.

Of course, there is always the possibility of bringing in film personnel from elsewhere. Australians frequently work on Kiwi films, as when cinematographer Andrew Lesnie shot the LOTR trilogy. And although film productions are required to try and hire New Zealanders and people from abroad with work permits, if no such people are available within the country, the studio can hire from outside. That process, if needed on a large scale, could easily cause further delays.

Ian said in his interview, “An announcement is imminent, but what it will be I genuinely don’t know. It’ll either be that we’re going ahead or that we’re not.” We have heard that sort of thing for a long time now. (Things seemed pretty rosy at Comic-Con last year, and now that event has nearly rolled around again, and we’re still waiting for a greenlight.) Let’s hope he’s right and that we’ll get some real news soon.

I’m in Bologna, Italy at the moment, attending a wonderful annual festival of restored films called Il Cinema Ritrovato. I’ll be home next week and blogging more regularly.

In the meantime, here’s an interesting little item. Show-biz commentator Anne Thompson has posted the Harry Potter and the Deathly Hallows trailer under the title “Trailer Watch: Harry Potter Finale Looks Very Lord of the Rings.” (The first part comes out in November.) She remarks that it “looks dark, dangerous and epic: Lord of the Rings scale.” A few of the shots do indeed remind me of the trilogy.

The first part of Deathly Hallows is due out in November, nine years to the month after the first HP film premiered. The Fellowship of the Ring followed closely on Sorcerer’s Stone, coming out in December of 2001. At the time the two “wizard” films were seen as competitors, though both were put out by studios owned by Time Warner. Now it appears that with the delays on The Hobbit, the Tolkien film franchise will outlast the HP series. But it’s interesting to see the latest HP installment being measured against LOTR.

There have been reports that Spyglass Entertainment and Summit Entertainment were in the lead to take over the running of a restructured MGM. Now Variety is reporting that Lionsgate is another candidate for that role. Since Variety is behind a subscription walls, here’s the story:

Lionsgate has re-entered the mix of possible partners for beleaguered MGM.

Informal merger talks between MGM and Lionsgate — which have been held off and on for years — have taken place recently, according to people with knowledge of the situation.

Both companies had no comment. Lionsgate CEO Jon Feltheimer and Vice Chairman Michael Burns, who would probably run the combined studio, have participated in the discussions but haven’t made a formal proposal.

The interest from Lionsgate comes with MGM seeking to survive, possibly via a partnership, as a way of dealing with its massive $3.7 billion debt. MGM’s believed to have met recently with other candidates who could run the studio and bring in production funds, including Spyglass Entertainment toppers Gary Barber and Roger Birnbaum and Summit Entertainment.

For Lionsgate execs, making an official offer for MGM would require that Carl Icahn support such a deal — even though Icahn’s promised a proxy fight for control of the Lionsgate board. Icahn has recently boosted his stake in Lionsgate to 31.8% via a hostile tender offer.

Earlier this year, Icahn criticized Lionsgate management for making an official bid for MGM, believed to be $1.4 billion. Lionsgate withdrew as a bidder in March when MGM asked for a sweeter offer and Time Warner remains the only official bidder.

Lionsgate also disclosed in a regulatory filing this year that it had held talks with Icahn last year about possibly combining forces for a takeover bid for MGM but those talks went nowhere.

The combination of Lionsgate and MGM would result in a studio with a library of more 7,000 titles. MGM’s assets include the James Bond franchise and half of “The Hobbit” films. Lionsgate, which is nearing $2 billion in annual revenues, would bring in a film production operation that focuses on low- and mid-budget projects such as Tyler Perry and “Saw” films with 13 to 14 titles a year; and a TV producing arm that includes “Mad Men,” “Weeds,” “Nurse Jackie”;

MGM put itself up for sale last November. Its debtholders are expected to need at least several more weeks to sort out MGM’s future, which will probably require the company to reorganize in a pre-packaged bankruptcy.

Lionsgate needed only three business days to persuade its lenders to amend terms of the revolving credit facility after Icahn increased his stake in the company to 31.8% through his tender offer. Icahn’s move had placed Lionsgate in the position of a possible default but the company was able to negotiate terms that carry a “favorable” interest rate of the London Interbank Interest Rate plus 2.5% with other key financial terms and provisions unchanged.

As the story mentions, Time Warner’s bid, apparently in the neighborhood of $1.5 to 1.7  billion, is still in play, in case MGM’s debt-holders decide to sell the studio rather than restructure it.

Today’s Los Angeles Times has an interesting story on the influence of Richard Wagner on film scores. The Lord of the Rings score gets mentioned, with a quotation from Doug Adams.

I was alerted by Magpie over on the Message Boards of TheOneRing.net that Doug Adams has revamped his blog site in preparation for the publication of his long-awaited book on the music in the LOTR trilogy. Have a look here. Doug specifies that his book will come out this fall. Even those who don’t want to read close analysis of the musical tracks may want to buy the book anyway to get the accompanying CD (which I gather won’t be sold separately). It contains: “unused, alternate, and early-draft music from FOTR, TTT, and ROTK … and even a little discussion with Howard Shore and myself.” Doug has long had access to Shore for interviews, and there’s no one better qualified than he to create the definitive book on the subject: The Music of the Lord of the Rings Films.

I know a lot of us are eagerly looking forward to seeing this book at last. Some of the delays have been due to the formidable challenges of putting together an elaborate publication like this.

Doug has been very mysterious about the publisher. I’m curious, since of course this is a late entry in the continuing LOTR franchise, which this blog in part exists to update. Is this one of the official tie-in books licensed by New Line? Or is it an independent book that had isn’t licensed but has had to pay for the individual rights to reproduce the various musical notations, illustrations, and other material from the films? I’ll of course post a notice when the book becomes available, but in the meantime, you can follow Doug’s blog, which contains a link to his Twitter page.

On June 10, Variety broke the news that another prominent child’s fantasy will take advantage of the filmmaking facilities in Wellington, New Zealand:

“The Wind in the Willows” is being developed in a live-action and animatronics version by RG Entertainment for a fall shoot in New Zealand, with Peter Jackson’s visual effects company Weta Workshop onboard.

Ray Griggs (“Super Capers,” “I Want Your Money”) will direct and produce the $30 million feature, based on the 1908 tale by Kenneth Grahame. Richard Taylor will handle special effects, and Kim Sinclair will be production designer.

This isn’t exactly a big-budget spectacle, but it comes at a time when political controversy is again heating up over the government’s 15% rebate for foreign productions spending significant amounts of money within the country. The New Zealand Herald posted a story about it yesterday. It states that the government has paid out around NZ$200 since 2003, including NZ$45 to Avatar’s producers and NZ$49 in King Kong’s producers. (The higher figure for Kong presumably comes from the fact that more of the filmmaking went on within New Zealand.) The loss to the people of New Zealand comes to NZ$36 million over that time. It’s not clear what kinds of calculations went into those figures. Do the critics take into account the amount of money spent by the productions within the company and the taxes consequently paid by the people who work directly or indirectly for the productions?

Given that other countries, including Australia, provide similar rebates, tax breaks, and other forms of support, New Zealand would be likely to lose a fair amount of business from overseas without the rebate scheme.

The Lord of the Rings trilogy was made before the scheme went into effect. Its success and the prospect of having the first Chronicles of Narnia film made in New Zealand both had a major impact in the government’s decision-making process. (I discuss the situation as it developed until about 2006 in the last chapter of The Frodo Franchise.) The Wind in the Willows has been named by some of the people arguing against the rebate.