MGM have less than a month left
MGM, after asking six times for an extension on the debt forbearance agreement it has with its large number of lenders, could be asking for a seventh, and that request has to come soon for in less than a month they are due to pay some US $400 million, an amount that they probably had hoped would have been eased with profits from the first Hobbit film already.
One of the big agreements with the lenders was to keep the company going so that they could make the two Hobbit films and claw some money back, hopefully enough to keep the company going, and that hasn't happened yet.
This, I believe, was the wrong decision. The Hobbit was not going to be a simple production and with two films planned and some huge talent, it was set to be a very expensive one too, but all that seems to have happened is a very lengthy production schedule and the loss of the intended director. A production schedule that should have come as no surprise considering the work involved.
Personally I thought the easier option was to go with the tried and tested formula of a Bond film, a definite crowd pleaser and money earner. Get the third in the current Bond trilogy made to really build up or complete the Quantum organisation story and cap off the first two, and perhaps even make another one to put Bond on a new story. Even if the Bond films were bad you would be guaranteed a profit at the box office, and that's what MGM needed.
There has been a lot going on behind the scenes in the organisation, as The Hollywood Reporter points out in its article, but that's all corporate management work and what they should have been doing is getting Bond made in the background with the time that the lenders have given them.
Now comes the time for repayment and they don't have a film to show them. There's this insane talk of producing an Outer Limits series, something that I can't understand for the life of me when they have the Hobbit films, Bond and a potential RoboCop remake from a huge director.
The article suggests that MGM could be forced into bankruptcy very soon, but that the lenders might find more money to keep them going as no one wants to lose the rights to the Bond franchise – in that case, shelve Hobbit and make a Bond film! It's obvious!
Corporate options seem to be a partnership or a buyout, although offers to date have been deemed too low and partnerships have failed to raise the needed capital. That was a major bid of US $1.5 billion by Time Warner, and there are thoughts that the lenders might just turn back to that offer and sell the company. Really, we'll have to wait and see until the end of the month.
However what is clear is that the reliance on the extended and stagnated production of the Hobbit films has been a waste, and while they may have restructured, found partners, and sketched out all sorts of deals, they have not produced anything they can sell and make a profit on.
Call me naive, but that's how business works isn't it? They had producers desperate to make a Bond film, actor, writer, director, all ready to start work on it, and Sony would have surely been a major partner for the film.
Ah well, what do I know. MGM could well outlive the end of the month and we could see two new Hobbit films and a Bond film within the year.