The legendary Metro-Goldwyn-Mayer, which once was the reigning studio in Hollywood, has officially been sold to a consortium headed by Sony Corp. of America.
(The Hollywood Reporter) -- The legendary Metro-Goldwyn-Mayer, which once was the reigning studio in Hollywood, has officially been sold to a consortium headed by Sony Corp. of America.
On April 8, Sony and its partners -- which include Providence Equity Partners, Texas Pacific Group, Comcast Corp. and DLJ Merchant Banking Partners -- paid $12 per share for MGM and assumed $1.9 billion in debt as part of a deal valued at $4.8 billion.
The acquisition closed nine days after the European Commission gave its blessing to the transaction, which first was unveiled in September.
According to the agreement, MGM will continue to operate as an independently owned motion picture, television and home video company under the control of the consortium -- albeit on a greatly reduced scale -- with Sony taking over the distribution of MGM films and TV episodes as well as its home video library. About 250 of its 1,400 employees, mostly connected to the library, are expected to stay with MGM.
"Today, we begin a new, exciting chapter in the life of MGM," said Dan Taylor, who became president of MGM with the completion of the acquisition. He takes over from Alex Yemenidjian, chairman and CEO, and Chris McGurk, vice chairman and chief operating officer, who are leaving their posts now that the deal is complete.
However historic the deal -- the latest in a long string of financial transformations engineered by the company's majority shareholder, Kirk Kerkorian -- its completion felt almost anticlimactic to some.
"The vibe is very interesting over here today," one studio source said. "It's oddly quiet. Some people are happy, and some are sad. There have been tears and there have been smiles."
As part of the deal, Sony Pictures Entertainment will "assume certain distribution responsibilities" for MGM's library of 4,000 films and 10,400 television episodes. MGM also will distribute material through Comcast's video-on-demand platform and on new Comcast cable channels operated by the consortium.
MGM expects to co-finance and co-produce a limited number of films with Sony Pictures Entertainment. MGM also will continue to develop new original television programs. Sony Pictures Television will assume production management for certain MGM television content.
According to Taylor, MGM's development slate of about 100 titles will continue in development. A number of those titles could be produced through the partnership with Sony. The consortium also is acquiring MGM's existing production pacts.
Although key players among MGM's existing senior management are expected to leave over the coming weeks, the company also promoted several execs within its ranks to new posts.
Charles Cohen, who has served as executive VP finance and corporate development, has been named executive VP. Jim Packer, who has served as executive VP television distribution for North America, is becoming executive VP television distribution. Blake Thomas, executive VP worldwide marketing, is becoming executive VP home entertainment distribution. Bruce Tuchman, head of MGM Networks, has been appointed executive VP MGM Networks. And Travis Rutherford, senior VP consumer products and interactive, has been named executive VP consumer products and location-based entertainment.