Sony considers proposal to sell piece of entertainment unit

Sony Corp.’s board is considering a proposal from a major shareholder to sell as much as 20 percent of its entertainment business, which includes the Sony movie studio, according to various reports, including BLOOMBERG.COM, THE NEW YORK TIMES and THE HOLLYWOOD REPORTER.

The Columbia Pictures unit of Sony has released the last three James Bond movies from 2006 through 2012 and is contracted to distribute the next film, Bond 24, whenever it comes out.

The proposal to sell a piece of the entertainment business was made last week by investor Daniel Loeb and his Third Point LLC, which holds a 6.5 percent stake in Sony. An excerpt from the Hollywood Reporter story citing Sony Corp. CEO Kaz Hirai:

“Firstly, I would like to clarify that the Third Point proposal is to sell off 15-20 percent of the entertainment division, not to spin it off as a separate entity,” said Hirai. “ We take this as an important proposal from one of our shareholders, and we will consider it thoroughly. We will discuss this fully at the board level and present our answer.”

The New York Times ran a MAY 19 REPORT about Sony Studios that said it wasn’t as profitable as other studios. The story cited Skyfall as an example. The Wilson-Broccoli family (referred to as the “James Bond rights holders”) got its cut and then Metro-Goldwyn-Mayer and Sony split the remainder 75-25, according to the story.

To view a Bloomberg Television video about Sony, CLICK HERE.

Sony watch: studio facing challenges

UPDATE (May 21): The Nikkei news service in Japan has reported that Sony Corp. is considering a spinoff of its entertainment business. Nikkei has an English Web site but to access THE STORY you have to be a subscriber. If you CLICK HERE, you can view a Los Angeles Times story that summarizes the Nikkei piece.

According to a BLOOMBERG.COM STORY, Sony shares climbed to their highest levels in more than two years after the Nikkei report.

ORIGINAL POST: The New York Times, IN THE LEAD STORY IN ITS MAY 19 BUSINESS SECTION has a detailed story about challenging times at Sony Pictures, the entertainment arm of Sony Corp.

One problem: it’s not as profitable as other studios, even with Agent 007 in its portfolio. According to reporters Brook Barnes and Michael Cieply, Sony’s operating margin was 6.5 percent and “figures at Warner Brothers, Disney, Paramount and 20th Century Fox were all higher.”

Here’s an excerpt with part of the explanation:

SONY’S $4.4 billion in ticket sales last year was impressive, but shareholders care about profit margins.

The movie studio’s bottom line didn’t look better for several reasons. For one thing, about 75 percent of the “Skyfall” revenue went to Metro-Goldwyn-Mayer after James Bond rights holders took their cut. Revenue from some DVD titles — “Zero Dark Thirty,” for instance — will come in the next fiscal year. But more important, “Men in Black 3” cost an arm and a leg, and when you’re making this many movies some are bound to miss: Sony’s hits were offset by the major flops “Total Recall” and Mr. (Adam) Sandler’s “That’s My Boy.”

Thus, in the case of Skyfall, which Sony distributed, the studio was third in line after the Broccoli-Wilson family and Metro-Goldwyn-Mayer.

Another challenge is investor Daniel Loeb, whose Third Point LLC, acquired a 6.5 percent stake and wants Sony Corp. to sell of 20 percent of its entertainment business and focus on its consumer electronics unit. Loeb, according to the Times, “specifically complained” about profitability of the entertainment unit. Sony said the entertainment business wasn’t up for sale.

Sony’s Columbia Pictures has distributed the last three 007 films (Casino Royale, Quantum of Solace and Skyfall) and is contracted to do so again for Bond 24 whenever it’s made.

For the complete NYT story, CLICK HERE. For more, you can CLICK HERE for a May 16 Bloomberg.com story headlined “Sony’s $100 Billion Lost Decade Supports Loeb Brakeup.” You can also CLICK HERE for a May 14 story by the Deadline entertainment news Web site.

Skyfall sets 007 record for U.S. opening

UPDATE (Nov. 12): The revised final figure for Skyfall’s opening weekend is North America is $88.4 million according to a story at BLOOMBERG.COM.

ORIGINAL POST: Skyfall, the 23rd James Bond film, sold $87.8 million in tickets in the U.S. and Canada this weekend, breaking the previous 007 record of $67.5 million for 2008’s Quantum of Solace.

Daniel Craig in Skyfall scores a 007 U.S. box office record.

Here’s an excerpt of a story at BLOOMBERG.COM

“Skyfall,” the latest James Bond film and the third starring Daniel Craig, led the U.S. and Canadian box office with a franchise-record $87.8 million in ticket sales for Sony Corp. (6758) and Metro-Goldwyn-Mayer Inc.
(snip)

“They’ve done an amazing job keeping the brand strong and relevant,” Gitesh Pandya, editor of BoxOfficeGuru.com in New York, said in a telephone interview. “It’s the oldest brand out there in the movie industry so the fact that 50 years later they’re doing record business shows that they’ve handled the property very well.”

Pandya expects the installment to gross more than $900 million globally in theaters.

For some perspective, Skyfall’s U.S. opening was higher than some recent popular comic book-based movies, including Captain America ($65 million), and Thor ($65.7 million), both released in 2011. If Skyfall can secure $900 million in worldwide ticket sales, that would get it close to the likes of The Dark Knight and The Dark Knight Rises, each of which generated $1 billion in ticket sales. Sam Mendes, the director of Skyfall, has said The Dark Knight helped influence Skyfall.

Meanwhile, the Box Office Mojo Web site estimates that Skyfall has total worldwide ticket sales to date of $518.6 million, including $428.6 million outside the U.S. and Canada.

Marvin Hamlisch, an appreciation

A preliminary version of the poster for The Spy Who Loved Me

Composer Marvin Hamilsch has died at age 68 (click here for the Associated Press’s Hamlisch obituary via the Huffington Post). He is being remembered for a long career of film scores. He also has a special place in 007 movies despite only working on one.

Hamlisch scored two Oscar nominations for his work on 1977’s The Spy Who Loved Me: for best score and for the title song, “Nobody Does It Better,” the latter with Carol Bayer Sager.

Hamlisch’s music is often noted for introducing a 1970s sound to the movie, including his “Bond 77” track in the pre-titles sequence. But Hamlisch also worked in an homage to John Barry. There’s a scene where Roger Moore’s James Bond and Agent Triple-X (Barbara Bach) are searching for Jaws at some Egyptian ruins. Hamlisch’s score for the scene, while using the ’70s sound of the movie, was based on Barry’s music for the pre-titles sequence of From Russia With Love.

“Nobody Does It Better,” meantime, would become one of the most popular songs of the Bond series. Even people who didn’t care for Bond appreciated the song. “Nobody Does It Better” took on a life of its own; if you glance at the “soundtrack” section of the composer’s BIO ON IMDB.COM, you’ll see it pops up a fair amount. Hamlisch may have just been “passing through” the 007 franchise, but he was still a big contributor to the Bond film legacy.

UPDATE I: Here are some other obituaries for the composer: from BLOOMBERG NEWS, from THE NEW YORK TIMES and from the LOS ANGELES TIMES.

MGM watch: It ain’t over till it’s over

The fate of Metro-Goldwyn-Mayer Inc., which controls half of the 007 franchise, remains unsettled as one Indian company and a well known corporate investor figuratively kick the tires.

First, from a Sept. 19 Bloomberg.com story about Sahara India Pariwar:

Sahara India Pariwar is in discussions on “mutual interest” with Metro-Goldwyn-Mayer Inc., a spokesman for the Indian company said in response to reports that it had bid for the studio’s debt.

“It’s too early to comment on the issue,” Abhijit Sarkar, head of corporate communications at Sahara India Pariwar, said in an e-mailed statement today. He didn’t give details.

You can read the full story BY CLICKING HERE. Two days earlier, the Associated Press had a story a version of which YOU CAN READ BY CLICKING THIS LINK. The story began like this:

LOS ANGELES (AP) – Sahara India Pariwar, an Indian conglomerate with real estate and media holdings, says it has made a $2 billion bid to buy the debt of struggling Hollywood studio Metro-Goldwyn-Mayer Inc.

It was unclear how MGM’s committee of creditors views the offer. A spokeswoman for the studio declined to comment.

All of this comes when Spyglass Entertainment has been reported by various media outlets as having a tenative to take control of MGM THAT WOULD INVOLVE MGM MAKING A “PREPACKED” BANKRUPTCY FILING. So far, there has been no official announcement from MGM, other than a Sept. 15 statement that the studio got another extension on making debt payments.

But that’s not the only potential complication. On Sept. 17, THE LOS ANGELES TIMES REPORTED THAT INVESTOR CARL ICAHN WAS BUYING UP MGM DEBT.

Here’s an excerpt:

Icahn previously accumulated and then sold debt in MGM earlier this year. In the past few weeks he has acquired what one person close to the situation described as a single-digit percentage in the studio’s nearly $4 billion worth of debt.

There’s no indication that Icahn wants to play a role in MGM if the company goes ahead with current plans for the top executives of Spyglass Entertainment to take over following a pre-packaged bankruptcy. The investor may just believe he can make a profit given the current trading price of the company’s bonds.

We don’t know precisely what all this means other than MGM’s fate, along with that of the cinematic James Bond, isn’t settled. Don’t make plans for attending the premier of Bond 23 yet.

MGM watch: Spyglass deal may be moving forward; would who distribute 007 films?

A deal where Spyglass Entertainment ends up running Metro-Goldwyn-Mayer Inc., which controls half of the James Bond franchise, may be moving forward. Here’s the start of a Bloomberg.com story by Michael White:

Metro-Goldwyn-Mayer Inc. signed a non-binding letter of intent to hand over management of the film studio to Spyglass Entertainment Group’s Gary Barber and Roger Birnbaum, a person with knowledge of the situation said.

Lenders to MGM, which owes more than $3.7 billion, have endorsed the plan, said the person, who asked not to be identified because the agreement isn’t public.

You can read the entire story BY CLICKING RIGHT HERE.

Meanwhile, assuming the MGM-Spyglass deal happens, there may be a competition among studios to actually release future Bond films because Spyglass would turn MGM into strictly a maker of movies. Here’s part of a Mike Fleming story on the Deadline Web site:

The situation on 007 will be more feverish. Warner Bros, Sony Pictures Entertainment and 20th Century Fox are the obvious outlets, but don’t count out Paramount. That studio has been co-financing partners with Spyglass on Star Trek and the upcoming sequel. That has grown into a strong relationship. I’m told that Paramount is making an aggressive push to win that franchise, much the way that it captured the Marvel Entertainment deal before that enterprise was sold to Disney.

You can read the entire Deadline story CLICKING HERE.

MGM watch: Studio gets another debt extension

For James Bond fans who don’t like Metro-Goldwyn-Mayer Inc., July 14 wasn’t a good day. The studio, coping with $3.7 billion of debt got another extension where it doesn’t have to make payments. MGM put out this news release indicating the company would live to die another day:

MGM said today its lenders agreed to extend the forbearance period and
therefore will not seek remedies in connection with the nonpayment of interest
and principal due on the company’s bank debt, including the revolving credit
facility, until September 15, 2010.

That’s the sixth extension granted by lenders and would indicate the fate of the studio, which owns half of the 007 film franchise, won’t be settled until nearly the end of summer. As things stand now, no more work on Bond 23 will occur until MGM’s situation is resolved.

However, this week, there were other developments. Bloomberg.com, in a story by Ronald Grover and Michael White THAT YOU CAN VIEW BY CLICKING HERE, reported that Lions Gate Entertainment is sniffing around at acquiring MGM.

Lions Gate Entertainment Corp., the independent film and TV producer, has approached creditors of ailing Metro-Goldwyn-Mayer Inc. to help shape a plan to acquire the studio, two people with knowledge of the situation said.

Lions Gate Vice Chairman Michael Burns has been meeting in New York with investors who hold some of MGM’s $3.7 billion debt, according to the people, who requested anonymity because the discussions are private.

Lions Gate has its own issues. The company has been feuding with one shareholder, Carl Icahn. The Bloomberg story adds this detail:

Any agreement to buy Los Angeles-based MGM, which won another loan reprieve from creditors today, would have to be approved by Carl Icahn, Lions Gate’s largest shareholder. He took a 10-day break from efforts to gain control of Vancouver- based Lions Gate’s board so the company could make a case for certain acquisitions. That standstill agreement expires on July 19. Debt-hobbled MGM is co-owner of the James Bond franchise.

Last month, the Wall Street Journal reported reported that Spyglass Entertainment may be a leading contender to gain control of MGM. Meanwhile, Time Warner Inc. earlier this year submitted a bid and said as recently as May that it was still interested at the right price.

The bottom line: MGM’s future, and James Bond’s, are still unsettled.

MGM update: more wheeling and dealing

There were reports this week that Metro-Goldwyn-Mayer Inc., which controls half the James Bond franchise, is examining alternatives to selling itself after initial bids came in lower than MGM creditors would have preferred.

An April 8 Bloomberg.com story by Ronald Grover and Andy Fixmer reported this:

April 8 (Bloomberg) — Ryan Kavanaugh’s Relativity Media LLC offered Metro-Goldwyn-Mayer Inc. $500 million to make movies as part of a management-led plan to keep the studio independent, two people with knowledge of the situation said.

Part of the motivation, according to the story, is this:

Kavanaugh, 35, is seeking MGM’s rights to the James Bond franchise, according to the people. He also wants the studio’s interest in “The Hobbit,” a future film based on the novel by “Lord of the Rings” author J.R.R. Tolkien that MGM shares with Time Warner Inc.’s Warner Brothers, they said.

Meanwhile, the Financial Times reported that brothers Tony and Ridley Scott had submitted their own MGM revamping plan. The FT is a pay site, so to read a short Bloomberg.com summary of the FT piece you can CLICK HERE. Meanwhile, the Commander Bond Web site did a cut-and-paste on the FT story (which probably wouldn’t make the FT happy if they saw it). You can view that by CLICKING HERE.

What to make of all this? We’ll see but it’s unlikely there will be any Bond 23 until it all sorts itself out.

No surprise: MGM wants to study bids

MGM received bids and, no surprise, wants to study them before proceeding. Here’s an exerpt from a Bloomberg.com story:

The company will start a second phase of its strategic review after evaluating the proposals, Los Angeles-based MGM said today in an e-mailed statement.

To look at the (short) story, CLICK HERE.

UPDATE: Here’s Nikki Finke’s take from the afternoon of Jan. 15, with a few, but not many, additional details.