MGM Restructuring, Relocating

1/01/2011 Posted by Admin

MGM Restructuring, Relocating

Movie News

By our guest blogger, Nick Hanover

Variety reported earlier this month that the rumors of MGM undergoing intense financial restructuring were true, with the article shedding light on a $5 billion lending exchange that will leave the studio with $500 million in exit funding and essentially owned by its creditors. As well as the funding, MGM now finds itself led by Gary Barber and Roger Birnbaum from Spyglass Entertainment. Part of MGM's massive debt stems from its acquisition by Sony in 2005 for nearly $5 billion and its harsh terms.

Since its financial troubles began, MGM has only released one film this year and many of its franchises have been seen to be in freefall. MGM's difficulties were theorized to be at least partially to blame for many of the problems behind the production of the upcoming Hobbit films, which MGM co-owns with Warner Bros. The James Bond franchise has already benefited from the restructuring, with MGM apparently making that franchise their first priority. This could mean that other MGM franchises, such as the Pink Panther films, could see a return to the screen relatively soon as well.

The restructuring also has immediate effects for in limbo productions put on hold due to the financial problems, most notably Joss Whedon's upcoming horror film "The Cabin in the Woods," which has been said to have been finished for a year, and a remake of "Red Dawn."

MGM's creditors have also made a huge move towards removing one big chunk of the studio's debt. Literally. Vacating the gigantic space they had occupied since 2000, a piece of real estate that was said to have the most expensive lease in L.A. history at $500 million, the studio will now call a former William Morris Agency office building in Beverly Hills home. MGM's former offices were said by the L.A. Times to look like something straight from the richest parts of Vegas, with outdoor decks for executives, marble pillars, spiral staircases and walls of awards. MGM's new building is considerably less grand but it at least shows the studio is taking their restructuring seriously.

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