UPDATE: 3 would-be Bond 25 distributors struggle

Image for the official James Bond feed on Twitter

Last month, the blog examined how real-life developments could inhibit two studios from seeking a deal to distribute Bond 25 and future 007 films.

At least one other studio may also encounter problems. So this post is part new and part recap.

Sony (the incumbent): Sony Pictures, through its Columbia Pictures brand, has distributed the last four Bond movies. But there was a management change last year, with Amy Pascal (an ally of Barbara Broccoli, co-boss of Eon Productions) departing.

Well, according to Variety’s James Rainey, things haven’t gone well with the new regime. An excerpt:

A series of personnel complaints and threatened defections by senior executives have raised questions about the leadership of Sony Pictures Entertainment movie boss Tom Rothman, several sources said — a difficult challenge for a studio already fighting to gain traction during a rough year at the box office.

(snip)
The unhappy Sony executives report that Rothman has made their lives untenable with his micro-management and obstreperous manner, which they say has also alienated talent agents, producers, directors and actors, many of whom are now loathe to bring their projects to Sony, the sources said.

Sony didn’t make that much money from Skyfall and SPECTRE because it only got a 25 percent split of the profits, earning far less than Metro-Goldwyn-Mayer and Eon.

Presumably, Sony would want a better deal from MGM if one could be secured. The Variety report suggests things remain unstable at Sony, which suffered computer hacks in 2014 that damaged its reputation.

Warner Bros.: The studio’s parent company, Time Warner, agreed last month to be acquired by AT&T Inc. in an $84.5 billion deal.

That transaction likely won’t be final until late 2017. The question becomes whether Warners is in a position to make a Bond 25 deal until the AT&T acquisition becomes final.

Paramount: The studio’s parent company, Viacom, may end up merging with CBS. Both companies were once joined and then split. Now, it’s looking like they could join up again.

All that figurative paper pushing isn’t conducive to getting things done. Even if the Viacom-CBS re-merger happens quickly, there’s bound to be a period of adjustment.

MGM watch: Will studio be affected by media consolidation?

AT&T Inc.’s pending $85 billion acquisition of Time Warner may kick off a new wave of media consolidations, analysts told Reuters.

So where does that leave Metro-Goldwyn-Mayer, a small fry on the media landscape?

MGM, the home studio of the 007 film series, emerged from bankruptcy in 2010 as a small company. It’s unable to release its own movies and has to cut deals with other studios. It’s also more of a television production company, making shows for cable networks.

Many bigger studios are already parts of conglomerates, including Warner Bros. (Time Warner), Columbia (Sony Corp.), Paramount (Viacom), Universal (Comcast), etc., etc., etc.

With AT&T’s announced purchase of Time Warner, still subject to regulatory review, even more consolidation is expected. Here’s an excerpt of the Reuters story by David Shepardson and Jessica Toonkel:

Media content companies are having an increasingly difficult time as standalone entities, creating an opportunity for telecom, satellite and cable providers to make acquisitions, analysts say.

Media firms face pressure to access distribution as more younger viewers cut their cable cords and watch their favorite shows on mobile devices. Distribution companies, meanwhile, see acquiring content as a way to diversify revenue.

“The industry needs to consolidate,” said Salvatore Muoio, whose firm invests in a number of media companies, including Time Warner. “You have a lot more competition from the likes of Netflix, Amazon and Hulu.”

“Media content companies” include movie and TV studios.

There’s no telling how this will turn out. AT&T doesn’t expect the Time Warner acquisition to be completed until the end of 2017. Also, the purchase is going to be carefully examined by U.S. regulators.

It’s just worth noting the media business is going through new uncertainty. The Bond film series is tied to a small player in MGM. It may be worth watching how the consolidation unfolds.

‘Playing Monopoly with real buildings’

Image for the official James Bond feed on Twitter

For almost a year, there was supposed to be bidding by studios to be Metro-Goldwyn-Mayer’s partner in distributing Bond 25 and other future 007 movies. But real life has a way of intruding.

Two of the expected suitors, Paramount and Warner Bros., have seen their respective parent companies involved with real-life dramas.

Throughout much of this year, there was a fight for control at Viacom, which owns Paramount. Viacom’s CEO, Philippe Dauman, who had wanted to sell a big chunk of Paramount to outside investors, got his walking papers. Now, billionaire Sumner Redstone’s National Amusements Inc. wants to merge Viacom with CBS.

National Amusements controls both. At one time, CBS was part of Viacom. Then, they were split into separate companies. Now, they may be one again. (This FORTUNE.COM STORY has a summary of all this.)

On Thursday, Bloomberg reported that Time Warner, parent company of Warner Bros., has had talks with AT&T Inc. concerning “various business strategies including a possible merger.” According to the Bloomberg story, citing “people familiar with the matter,” Time Warner would be willing to sell for the right offer. The company rejected an offer from 21st Century Fox, parent company of 20th Century Fox, in 2014 for $75 billion.

Why should 007 fans care? Change of ownership or major structural change tends to be unsettling. It’s harder to make long-term moves if your company’s ownership may change. The separate intrigue at Viacom and Time Warner, may affect the ability of Paramount and Warner Bros. to do a Bond deal with MGM.

For now, there is nobody to release Bond 25. Sony Pictures, through its Columbia brand, has released the last four 007 films. But its most recent contract expired with SPECTRE.

At this point, neither the Viacom-CBS merger nor an AT&T-Time Warner deal have occurred (AT&T and Time Warner declined to comment on the Bloomberg story).

Still, all this wheeling and dealing recalls a line from Diamonds Are Forever about how reclusive billionaire Willard Whyte was said to be “playing Monopoly with real buildings.”

UPDATE (Oct. 21): The Wall Street Journal reported today that AT&T is in “advanced talks” to acquire Time Warner and that a deal could be reached as early as this weekend.

UPDATE II (Oct. 21, 10:20 p.m. ET): Reuters reported Friday night, citing people it didn’t identify, that AT&T has reached “an agreement in principal” to acquire Time Warner for $85 billion.

UPDATE III (Oct. 22, 7:40 p.m.ET): AT&T announces it has agreed to acquire Time Warner for $107.50 per share for a total of $85.4 billion. Time Warner shareholders will receive half in cash and half in AT&T stock, according to the statement disclosing the sales accord. AT&T said it expects the deal to close before the end of 2017.

EPILOGUE: The U.N.C.L.E. movie that wasn’t

Solo and Kuryakin in peril in The End Of The World Affair

The other day, this blog published a POST about the storyline for a late 1970s-early 1980s movie version of The Man From U.N.C.L.E. that was never produced. It turns out that wasn’t the entire story.

About 20 years ago, the Robert Short-Danny Biederman story was almost adapted into a comic book — except it wasn’t published. Deja vu all over again, as Yogi Berra might say.

Background: In 1993, Millenium Publications, an independent publisher of comic books, came out with a two-part comic book based on The Man From U.N.C.L.E. called The Birds of Prey Affair.

Millenium planned a second U.N.C.L.E. foray, to be based on the aborted Short-Biederman movie, The Man From U.N.C.L.E.: The Feature Film. The title would have been The End Of The World Affair.

The project ran into problems. There were management changes at Millenium while the project was underway. Eventually, the art was completed. However, the studio that controlled U.N.C.L.E., which would have been Turner Entertainment at the time, wanted an increase in the licensing fee. (Turner was acquired by Time Warner, the parent company of Warner Bros., in 1996). As a result, nothing was published.

Thus, the imaginative story line again was denied an audience. The tale involved an all-out assault on U.N.C.L.E. by Thrush, the villainous organization of the original 1964-68 series. Also, the story revealed that Thrush already exerted control over the world through economic means, including controlling ownership of multi-national conglomerates.

Two decades later, a new U.N.C.L.E. movie is scheduled to begin production in September. This one will be a 1960s period piece, with Henry Cavill and Armie Hammer as U.N.C.L.E. agents Napoleon Solo and Illya Kuryakin. It remains to be seen what the new film, to be directed by Guy Ritchie, has in store or whether it can match the scope of the Short-Biederman story.

007 questions about how the MGM-Spyglass deal affects James Bond

We may not be able to provide the answers but we’re good at asking questions about James Bond. Here’s our special MGM financial restructuring edition.

001. How long will MGM be in bankruptcy court? Metro-Goldwyn-Mayer Inc. is going to file for bankruptcy as part of a plan that MGM creditors approved on Oct. 29. The filing will be what’s known as a “prepackaged” bankruptcy, meaning creditors are agreed on terms ahead of time to try to minimize time in bankruptcy court.

The Wall Street Journal, in a story about the vote by MGM creditors, said the studio might get out of bankruptcy court in “a month or two.” The Los Angeles Times said it might be as little as one month.

If these reports are correct, MGM would get out of bankruptcy court in December or early 2011. But given the twists and turns in the MGM financial saga, you might avoid betting on a specific date.

002. But Bond 23 will get back on track pretty soon, right? That depends on your definition of soon.

003. Once MGM gets through bankruptcy court, what else might hold up Bond 23?

For one thing, the revamped MGM will be smaller and no longer release films itself. MGM, which controls half of the 007 film franchise, will be run by Gary Barber and Roger Birnbaum, the co-founders of Spyglass Entertainment. The duo will have to cut deals with other studios to release films. There’s a lot of change ahead at the studio.

Meanwhile, there have been signs that Eon Productions, the other half of the Bond film franchise, didn’t exactly move quickly on Bond 23, even before it said in April development of the film was suspended indefinitely because of MGM’s financial ills. The production company issued a press release last year about how Peter Morgan, writer of Very Important Films such as Frost/Nixon, would help do Bond 23’s script. Morgan has disclosed he never got past the treatment stage while questioning the basic Bond concept. That raises the question whether Eon wasted its time before MGM’s situation worsened.

004. Can the revamped MGM properly finance a Bond movie? 2008’s Quantum of Solace, released by Sony’s Columbia Pictures, had a reported budget of $230 million. MGM’s business plan calls mostly for much-more modestly budgeted projects with occasional big projects. Presumably, Bond 23 would be one of those. The actual budget may depend on what studio ends up doing a deal with MGM to release Bond 23.

005. Does (and should) 007 face some budget tightening? Chances are unlikely Bond 23 would be a bargain basement production but it remains to be seen whether it’s as pricey as Quantum of Solace. A somewhat less expensive Bond 23 might not be a bad thing; Quantum, despite its ample budget, was seen by many fans as not being as good as the previous 007 film, Casino Royale. A major unknown is what studio actually ends up releasing Bond 23 and the terms of its deal with MGM.

006. What studio will release Bond 23? According to Mike Fleming of Nikki Finke’s Deadline.com Web site, there will be a lot of interest among major studios:

If MGM isn’t a distributor, the next installment of James Bond will be a jump ball. Expect Sony (which distributed Casino Royale) to battle it out with Warner Bros and Fox, but watch Paramount emerge in the thick of it because of the close relationship that the studio has developed with Spyglass since that company became co-financier of Star Trek and the followup that is in the works.

007. Is the MGM creditor vote good news or not for Bond fans? Assuming MGM gets out of bankruptcy court quickly, it’s a positive step — but it doesn’t appear to jump start Bond 23 by itself. The Spyglass deal is complicated and was arrived at only after MGM couldn’t sell itself at a price debt holders wanted. The new MGM management team’s job is just starting. We also don’t know what kind of relationship the new regime will have with Eon boss people Michael G. Wilson and Barbara Broccoli.

MGM watch: the soap opera continues — Indian conglomerates, Carl Icahn, Time Warner

Metro-Goldwyn-Mayer Inc. still has no completed deal with Spyglass Entertainment yet while Sahara India Pariwar continues to hang around, after originally being rejected. UPDATE I: And this morning there’s a New York Post report that investor Carl Icahn and Time Warner may make some moves. All of which means the fate of Bond 23 remains unsettled.

First, this week on the Sahara India Pariwar front: here’s how AN ASSOCIATED PRESS STORY ON YAHOO’S FINANCE WEB SITE published on Sept. 28 began:

LOS ANGELES (AP) — Indian conglomerate Sahara India Pariwar says that the creditors of struggling Hollywood studio Metro-Goldwyn-Mayer Inc. have agreed to reconsider its $2 billion cash offer for the company.

The development marks a reversal from last week, when Sahara said the creditors committee rejected the offer within hours of a conference call with Sahara chairman Subrata Roy Sahara.

The story quotes a Sahara spokeswoman as saying MGM initially rejected her company’s bid because it had submitted “documentation of its assets in rupees.” Oops.

Carl DiOrio of the Hollywood Reporter followed up the next day. YOU CAN READ THE STORY BY CLICKING HERE. Here’s an excerpt:

Lenders-side sources are uncertain how seriously to take Sahara, in part because the Indian company has dealt only with management so far and has had scant contact with the debtholders. But it’s clear the lenders would be open to reviewing a bid of $2 billion or more for MGM by Sahara or anyone else.

Early Sept. 30, News Corp.’s New York Post weighed in. You can read the entire story BY CLICKING HERE. Here’s an excerpt:

There is renewed interest in movie studio MGM from Time Warner and Carl Icahn, The Post has learned.

Time Warner last week, through back channels, told the hedge funds controlling the studio it could be willing to raise its offer to $1.7 billion from $1.5 billion. The hedge funds rejected the idea, a source with direct knowledge of the situation said.
(snip)
Meanwhile, Icahn, who already owns roughly $500 million of MGM’s $4 billion in debt, is buying more, the source with direct knowledge said, adding that he would not be surprised if Icahn, through Lionsgate Entertainment, soon offers a new proposal.

These stories need to be read carefully. Note the Post’s unnamed source is quoted as saying he wouldn’t be surprised if Icahn would make a bid, but that’s not the same thing as *knowing* the investor would make a bid. Interestingly, even though the story by Josh Kosman and Claire Atkinson begins with Time Warner, the online edition headline is, “Icahn mulls new proposal for MGM.”

If Time Warner is really interested, as the Post says, it would mark a change of attitude. Recently, Time Warner didn’t have kind words for MGM.

UPDATE II: On The Wall Street Journal’s Web site, there’s a Dow Jones News Service story quoting Time Warner AS DENYING THE NEW YORK POST STORY. The Journal and Dow Jones News Service are also owned by News Corp., the New York Post owner.

Like other Bond fans, we’re suffering from MGM fatigue. (The way we had to update this post twice today is an example.) But until it gets settled, fans will have to be content with re-watching their 007 DVDs or checking out new Bond books and video games.

Time Warner criticizes MGM, 007’s home studio

Time Warner has been reported as one of the potential buyers for Metro-Goldwyn-Mayer, the studio that controls half of the James Bond franchise. But Time Warner’s reported bid was far less than the $3.7 billion MGM owes. Anyway, Time Warner’s CEO, Jeffrey L. Bewkes, was asked about the ongoing MGM saga during an Aug. 4 conference call. Here’s part of what he had to say, according to a transcript that Time Warner filed with the Securities and Exchange Commission:

“From what we read in the paper, it sounds like they’re moving in a different
direction and it sounds pretty inept to us.

All along we’ve said we didn’t need this. We feel comfortable of course with
our strategic position….We haven’t really had the kind of instructions that would enable us to confirm whatever the value of MGM is because we’d have to go into a more constructive process than been invited into.”

Those comments suggest that Time Warner is, at the very least, tiring of dealing with MGM. How does this affect 007? Well, back in June, Bloomberg Businessweek, in a story by Ronald Grover and Michael White, said Eon Productions and its leaders, Michael G. Wilson and Barbara Broccoli, were wanting Time Warner’s Warner Bros. unit to stay in the hunt to acquire MGM. An excerpt:

The Broccoli family has urged Warner Bros. to stay in the bidding, said three people with knowledge of the situation. Scott Rowe, a spokesman for Warner Bros., declined to comment, as did Susie Arons, an outside spokeswoman for MGM. Stephanie Wenborn, a spokeswoman for Broccoli and Wilson’s London-based Eon Productions, also declined to comment.

If that’s correct, it wouldn’t be much of a stretch to wonder if Wilson and Broccoli would have found the Time Warner CEO’s comments disappointing. Still, the MGM situation — which led to development of Bond 23 being indefinitely suspended — hasn’t been resolved. For Bond fans, there are still far more questions than answers.

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 watch: Time Warner still interested

Time Warner reported first-quarter results on May 5. During a question-and-answer session, the company said it’s still interested in acquiring Metro-Goldwyn-Mayer Inc. but only at the right price.

The company said little else, but you can read a bit more by CLICKING RIGHT HERE to view a short sidebar story on Bloomberg.com. The Web site ran a longer story on Time Warner’s financial results.

As we all know by now, MGM controls half the 007 franchise and MGM’s financial ills (too much debt, too few hit movies) have caused work on Bond 23 to be suspended.