Thursday, 8 April 2010

Hollywood Babble On & On #484: A Plan For MGM

Welcome to the show folks...

After a long run of bad luck, including a fizzling movie, and a fizzled auction, Relativity Media and its Wall Street backers have tossed MGM a possible lifeline. Basically, they're offering $500 million in production funding to get the next James Bond movie and
The Hobbit made, and hopefully put the once great studio on the road to fiscal solvency.

They're not the only one. Both Rupert
Murdoch's News Corp., and Amir Malin / Qualia Capital have made similar offers that would provide the production funding MGM needs to start making new movies as an independent company.

Which got me thinking.

Why not work together?

Just hear me out.

MGM has one thing going for it, it has the infrastructure needed to get movies into theaters. What it lacks is the money needed to make fresh movies, and market them successfully.

There are companies out there, independent producers, financiers, and others, who have the resources to make movies, but lack the infrastructure to get them on screens.

Do you see where I'm going with this?

Why don't these independent companies make a deal with MGM's owners and creditors, who should probably swap debt for ownership, where they work together.

Here's how:

1. Restructure the company. First sell the MGM name to Warner Bros. who probably want it for marketing the pre-1986 MGM library. It won't be for much, but any cash is welcome. Then get Tom Cruise & Co. out of United Artists, and re-brand the company with that name.

The MGM brand is only effective selling movie history, it's terrible at selling new movies. United Artists has been effectively moribund for so long, it will be like starting over fresh with an all new company. If that doesn't work, re-brand it as Orion Pictures. Either way, find a new identity not reeking of the stench of corporate death.

2. Form an Independent Producer Consortium. Essentially all the independent producers and financiers interested in saving MGM would get together and basically take over providing content for MGM's outlets, namely theaters, broadcast/cable TV, and home video/online downloads. A simple, straightforward profit sharing deal would be forged, that says that where money is made all partners get paid. No silly games, no shenanigans. MGM's management must be kept deliberately lean, and efficient.

In the 1950s and 1960s, where most of the major studios were floundering, United Artists was flourishing. Why? Because they didn't have a big office, with lots of executives and overhead. They didn't even own a camera. What they had were deals with independent producers and financiers to provide them with content. Why can't they do that today?

I think you could get quite a few independent producers and financiers interested in this deal, because it's better for them to have as many viable studios/distributors around. Because the more competition, the better the deals they can make.

3. Make allies. Now who would ally themselves with this new company? First up Rupert Murdoch's News Corp. which owns 20th Century Fox. Why would they help, like Murdoch's offer, to keep MGM independent? It's a form of enlightened self interest. Fox handles MGM's international theatrical distribution, and domestic home video distribution.

Old Rupert's a canny cat, and doesn't want to lose those deals in some bankruptcy court. He likes the income generated by a viable MGM, and could be approached to aid the consortium help get the company back on its feet, and making new product for him to make money distributing.

4. Make as much money as possible, as fast as possible. Once everything is set up, this new MGM (whatever name it's finally called) They have to do everything they can to make money. That means lean budgets, and projects with either wide commercial appeal, or what I call profitable niche appeal, like low budget horror films, comedies, and action pics.

I hope that something positive does happen to MGM, and that it's literally reborn as a new viable company, because Hollywood does need it.

No comments:

Post a Comment