By Indiewire | Indiewire April 11, 2005 at 2:0AM
MGM Deal Concluded as Studio Merges Many Operations With Sony
by Eugene Hernandez
Friday essentially marked the end of the road for legendary Hollywood studio Metro-Goldwyn-Mayer. MGM announced the completion of a deal selling the company to a consortium that includes Sony Corporation of America and the leading U.S. cable company Comcast. Under the sale, valued at nearly $5 billion, MGM is being transformed into a private film, TV, and home video business; studio chiefs, Alex Yemenidjian and Chris McGurk have resigned. Its film projects will now be released by Sony and in an announcement Friday, MGM said that the company would co-produce its pending projects with Sony.
MGM, a label more than 80 years old, maintains a library of some 4,000 films and some 1,400 employees, including the storied United Artists unit. Its recent history has been marked by significant instability due to numerous ownership and leadership shifts. About 250 employees are expected to stay on, with the rest leaving MGM in waves over the coming weeks. Many employees were notified of their departure debates late last week as the deal closed.
In a time when rival studios have become parts of much larger conglomerates (News Corp., Sony Corp., Viacom, NBC Universal, the Walt Disney Company and Time Warner), the 80-year-old MGM has existed as a much smaller, but still prestigious studio. It was re-acquired about 9 years ago by Kirk Kerkorian and its United Artists specialty unit was re-vitalized in 2001. The Sony and Comcast deal to buy MGM from Kerkorian, first announced in September, includes investors Providence Equity Partners, Texas Pacific Group and DLJ Merchant Banking Partners, officially closed on Friday.
"Today we begin a new, exciting chapter in the life of MGM," said Dan Taylor, the new president of MGM in a statement. He previously served as MGM CFO. "With our strong financial and strategic partners, we look forward to building on MGM's exceptional legacy and capitalizing on emerging technologies and markets to provide consumers worldwide more opportunities to enjoy the world's largest modern library of films and television programming. We look forward to a very bright future for MGM."
Other executives tapped for key posts at the new MGM include Charles Cohen (EVP), Jim Packer (EVP of TV distribution), Blake Thomas (EVP of home entertainment), Bruce Tuchman (EVP of MGM Networks), and Travis Rutherford (EVP of consumer products and location-based entertainment.