Bond 25: Why MGM has to get bigger or sell out

Image for the official James Bond feed on Twitter

Image for the official James Bond feed on Twitter

For the James Bond film franchise, Metro-Goldwyn-Mayer is a millstone.

MGM is not big enough to compete with other major studios by itself. Since a 2010 bankruptcy, the home studio of 007 films has needed studio partners to distribute and market Bond movies.

For the past two Bond films, 2012’s Skyfall and 2015’s SPECTRE, MGM negotiated a sweet deal with Sony Pictures. Sony co-financed the movie but only got 25 percent of the profits. Sony ended up in third in line behind MGM and Eon Productions for the 007 spoils.

But good fortune like that only lasts so long.

The Sony deal expired with Skyfall. “There’s no rush,” MGM CEO Gary Barber said of reaching a new Bond distribution deal with Sony or another studio. “We’re evaluating all of our options. We will advise on the deal when we actually make it.”

MGM logo

That was eleven months ago. No hurry, indeed.

In reality, other studios — Sony, Warner Bros. and Paramount among them — have their own issues.

Sony’s parent company wrote down the value of its movie business by almost $1 billion, an indication that things aren’t going well. Warner Bros.’s parent company, Time Warner, is in the midst of an $85 billion acquisition by AT&T. Also, Warner Bros. is struggling with its “extended universe” of movies based on DC Comics characters. Paramount is struggling, period.

Under those circumstances, cutting a deal with MGM to distribute Bond movies might not be the top priority. Even more stable studios, such as 20th Century Fox and Universal, probably want a better deal than Sony got for Skyfall and SPECTRE.

These days, MGM mostly makes television shows while producing a few movies.

Bond, however, remains MGM’s biggest property, going back to when MGM acquired United Artists in 1981. 007, which not that long ago had his first $1 billion box office movie (Skyfall), is a major league property, or at least can be.

For that promise to be fulfilled, however, Bond needs to be at a major league studio.

MGM isn’t that. It hasn’t been for a long time.

To be a big-time studio, MGM needs to be able to release its own movies and be in more control of its destiny.

It’s fine to cut deals with other companies for financing (other studios do). Ultimately, however, Bond’s home studio needs the ability to distribute the movies.

MGM’s Barber wants the company to sell stock to the public in the next three to five years. Maybe it can become big enough to be a real studio again.

But if it can’t, the 007 franchise will suffer. From the selfish standpoint of Bond film fans, a better option might be for MGM to sell to a studio that has big league status.

More turmoil at would-be Bond 25 studio partner Paramount

Paramount logo

Paramount logo

Paramount Pictures, one of the would-be studio partners for Bond 25, may be experiencing some more turmoil.

Bray Grey, the studio chief, is in talks with parent company Viacom about taking a different post at Viacom, the entertainment news website The Wrap reported, citing two people familiar with the situation it didn’t identify. Paramount and Viacom did not comment, The Wrap said.

The Los Angeles Times, which also reported on the talks, said Paramount could announce Grey’s exit as early as next week.

Paramount is among the studios that is supposed to be interested in striking a deal with Metro-Goldwyn-Mayer to release Bond 25. MGM isn’t big enough to release its own films.

Sony Pictures has released the last four 007 films but its most recent two-picture 007 film contract expired with 2015’s SPECTRE. Paramount has done business with MGM, releasing MGM’s 2016 Ben Hur flop.

Paramount has struggled and Viacom was hobbled by a fight where the controlling Redstone family ousted CEO Philippe Dauman last year. The Redstones also control CBS and for a time wanted the companies to consider a merger. Those talks ended in December.

The talks with Grey “come nearly two weeks after” Viacom’s current CEO, Bob Bakish, “made a public mandate for improved financial performance at the studio,” The Wrap said.

Other would-be Bond 25 studio partners also have issues.

Sony Corp., parent company of Sony Pictures, last month wrote down the value of that studio by almost $1 billion. Sony Corp. has said it’s not planning to sell the movie business. Warner Bros.’ parent company, Time Warner, is being acquired by AT&T, but that $85 billion deal is pending regulatory review.

Long-term issues confronting the 007 franchise

Daniel Craig in 2012 during filming of Skyfall.

Daniel Craig in 2012 during filming of Skyfall.

Here are some long-term issues confronting the James Bond film franchise that extend beyond purchased helicopters or even the next 007 film (whenever it comes out).

MGM needs to get bigger or sell out: Metro-Goldwyn-Mayer, Bond’s home studio, is in a no man’s land in Hollywood.

It’s not big enough to release it’s own movies. In fact, it’s more of a television production company than an actual studio. What few movies it makes annually require cutting deal with another studio to distribute. The last four 007 films were released by Sony, with other MGM projects released by other studios.

Time Warner, which includes Warner Bros., has agreed to be acquired by AT&T. If that deal receives U.S. regulatory approval (not a sure thing), other deals may result.

That leaves MGM to decide whether it’s present strategy is adequate. If a new wave of deals develops, MGM probably has to move one way or another — get bigger or sell off to a buyer.

Eon’s succession plan: Eon is a private outfit that doesn’t discuss such subjects. Maybe it has one, maybe it doesn’t. Regardless, it needs a succession plan if it doesn’t have one.

Michael G. Wilson, one of the Eon principals, turned 75 last month. His half-sister, Barbara Broccoli, is only 56. But, as the saying goes, nobody lives forever.

Perhaps Gregg Wilson, one of Wilson’s sons who has been working on recent films, is being groomed to take more responsibility once his father retires. At this point, nobody really knows.

Is it time for new marketing ideas? There are recurring themes in marketing Bond films over the past two decades.

One of the most repeated is having the lead female actor talk about his character is Bond’s equal. It was uttered most recently by actress Lea Seydoux in an interview with Empire magazine in early 2015.

We get it. Bond women are now strong and independent. Maybe it’s time to come up new marketing points. Strong women in Bond films are now a given.

Our rants about Bond 25

James Bond, feeling sad after examining his back story one more time.

James Bond, feeling sad, yet again.

Bond isn’t at the same level as other film franchises: You’ve bought an old helicopter. And we should care, why?

The Man From U.N.C.L.E. movie in 2015 acquired a lot of old cars. More than three years after filming began, it didn’t really matter in the movie’s ultimate success (or lack thereof), did it? Buying vehicles and props is, at the end of the day, a minor enterprise.

Real film franchises have studios that distribute them. Bond doesn’t have one.

The most recent 007 film, SPECTRE, came out in the fall of 2015. Sony Pictures released the last four Bond movies. SPECTRE concluded Sony’s most recent two-picture contract.

If Bond were a fantastically profitable film franchise, other studios would be beating down the doors of Metro-Goldwyn-Mayer, 007’s home studio. But MGM hasn’t yet reached a new deal.

Of course, Sony got taken with the last two films (Skyfall and SPECTRE), providing 50 percent of the financing but only 25 percent of the profits. That might, just might, be a factor in MGM’s delays in finding a new studio partner.

Meanwhile, real film franchises actually seek publicity. Marvel Studios releases two movies a year. But it successfully gets publicity year round. Ditto for Warner Bros.’ DC Comics film universe, despite the fact it’s not as successful as Marvel.

The Bond franchise is more like the Kremlin. I know, Ian Fleming would spin in his grave at that reference.

Seriously, though, there are parallels. Both provide little tiny bits of news that require the knowledge of long-time followers to interpret. Why else, do you suppose, there has been so much attention to the purchase of a helicopter?

Carry on.

Sony writes down value of film unit by almost $1B

Sony Pictures logo

Sony Pictures logo

Sony Corp. wrote down the value of its film business by $962 million, The Hollywood Reporter said.

Essentially, Sony said its film business is worth far less than what it listed on its financial books. In accounting that’s known as a “goodwill impairment charge.”

The writedown stemmed from “a downward revision in the future profitability projection for the motion pictures business,” according to a Sony statement quoted by THR.

Sony also said its commitment to the film unit “remains unchanged.” The New York Post earlier this month said Sony “is listening to bank pitches about a potential sale of its film and TV operations.”

Sony has released the past four James Bond films. The company has said it would like to extend the relationship but it has no deal in place with Metro-Goldwyn-Mayer, 007’s home studio.  Under its most recent two-picture deal, Sony co-financed Skyfall and SPECTRE but only got 25 percent of the profits.

At the moment, Bond 25 has no distributor, much less a release date.

NY Post says Sony considers selling film business

sonylogo

Sony Corp. is “listening to bank pitches about a potential sale of its film and TV operations,” the New York Post reported Jan. 19, citing sources it didn’t identify.

That includes Sony Pictures, whose Columbia brand has released the past four James Bond films. Sony’s most recent two-picture contract to distribute 007 films for Metro-Goldwyn-Mayer expired with SPECTRE.

On Sept. 13, Sony Corp. CEO Kazuo Hirai said in a statement that, “As we look ahead, we see our entertainment businesses as essential parts of Sony.”

The comment was part of an announcement that Michael Lynton, the head of Sony’s entertainment division is departing the company, effective Feb. 2. Hirai is setting up a second office in California “to oversee the management of the entertainment companies,” according to that announcement.

Tom Rothman, a Sony Pictures executive, told the Hollywood Reporter last year the studio is interested in continuing its Bond relationship.

Sony says it won’t sell movie business

sonylogo

Sony Corp.’s chief executive officer said Friday that the Japanese electronics company is not selling its movie and entertainment business, according to a report in The New York Times.

The Times’ story is mostly about how Michael Lynton is stepping down as head of Sony Pictures Entertainment.

Lynton is departing effective Feb. 2. Kazuo Hirai, the Sony Corp. CEO, will take a more active role at the entertainment unit, according to The Times, including keeping an office at Sony Pictures offices in Culver City, California.

Here’s an excerpt from The Times’ story:

Mr. Hirai also emphasized that the studio was not for sale — a persistent topic of Hollywood speculation — calling movies, television and music “essential parts of Sony.”

Here’s why James Bond fans should care: Sony has released the last four James Bond films. Its most recent two-picture deal expired with SPECTRE. The company has said it wants to continue its 007 relationship with Metro-Goldwyn-Mayer, Bond’s home studio.

For now, MGM has no distribution deal for Bond 25. Under terms of its most recent Bond deal, Sony’s profits were low compared with MGM and Danjaq LLC, parent company of Eon Productions.

The departing Lynton was embarrassed by the 2014 Sony hacks. But he survived, unlike studio executive Amy Pascal. Pascal, in turn, had a close relationship with Barbara Broccoli, the Eon boss. Pascal ended up with a producer’s deal at Sony.

Pascal was a producer of last year’s Ghostbusters movies, which Sony hoped would become a franchise. That’s now considered unlikely after generating worldwide box office of about $229 million.