Dueling Reports: Hollywood Reporter says MGM’s bankruptcy chances increasing; WSJ says Spyglass near MGM deal

Aug. 10 ended up having dueling reports about the future of Metro-Goldwyn-Mayer, James Bond’s home studio, which also controls half of the 007 franchise. The day started off on a gloomy note when The Hollywood Reporter, in a story by Carl DiOrio, analyzed whether MGM may have to declare bankruptcy. Here’s the beginning:

Things are going so badly with MGM’s restructuring review that a forced bankruptcy is a real possibility by Sept. 15….(snip) little more than a month before $400 million-plus in owed debt and interest payments come due, this much is certain: Frustration has never been higher with the more than yearlong effort to heal the ailing Lion.

“It’s kind of become a joke,” said an exec at one of the companies considering a strategic partnership with MGM. “There is a real fatigue among the lenders after all of the forbearance agreements.”

The story, WHICH YOU CAN VIEW BY CLICKING HERE, is more analytical and didn’t break a lot of hard news. But the story indicated that MGM’s hold on the James Bond franchise may have a big impact on how all this turns out.

As for the fear of losing control of 007 rights, there is no legal consensus on whether lenders would lose those rights in the event of a forced bankruptcy. But such concern has been enough to force lenders to agree to the half-dozen debt payment extensions.

That refers to the number of times creditors have extended deadlines for getting repaid money they’re owed. The current extension expires on Sept. 15. It’s doubtful that Bond fans, forced to endure an indefinite delay of Bond 23, will find very much to be satisified about.

Late in the afternoon, The Wall Street Journal reported that Spyglass Entertainment IS NEAR A DEAL TO RUN MGM. Here’s an excerpt. The “they” in the following paragraph are referred to as people familiar with the matter in the story’s first paragraph.

MGM’s creditors have hammered out financial details with Spyglass co-heads Gary Barber and Roger Birnbaum and the two sides have spent the better part of this week negotiating the makeup of MGM’s new board, they said.

The story says a “streamlined” bankruptcy would be involved before Spyglass would oversee MGM. The WSJ REPORTED BACK IN JUNE that Spyglass was the leading contender to take control of MGM.

UPDATE: Bloomberg.com, in a story by Ronald Grover THAT YOU CAN READ BY CLICKING HERE, has additional details. An exerpt:

Spyglass, led by filmmakers Gary Barber and Roger Birnbaum, would receive 4 percent ownership in MGM in return for their rights to films including “Sixth Sense” and “Seabiscuit,” said one of the people, who declined to be identified because the discussions are private.

An accord, which could be announced in days, would involve a bankruptcy filing to convert the debt into a more than 90 percent stake in MGM, said one person. Los Angeles-based MGM has two releases for 2010, according to Box Office Mojo. Spyglass, which is being advised by Deutsche Bank, would need to raise as much as $500 million for production, the person said.

Among the films MGM has on its schedule further out are a James Bond feature and a two-picture installment of “The Hobbit,” a prequel to the blockbuster “Lord of the Rings” series. MGM has the rights to “The Hobbit” with Time Warner Inc.’s Warner Bros.