Gary Barber may yet make MGM a real force in movie-making.
Jonathan Stuart-Brown for Save The British Film Industry.
MGM was once the biggest, boldest, most profitable and the best Hollywood Studio.
Its decline through loss of nerve in the 1960s is a lesson that a wise British Government would heed.
MGM pulled thirty major lavish big budget productions which would have been groundbreaking, believing the industry was in decline and that TV would kill off cinema-going on large scale. In fact cinema-going revived massively and DVD, pay-on-demand, ever newer technological versions of DVD and online, merchandising, videogames, and crucially remakes and reboots have made any big brandname movie a stellar cash cow for generations to come.
MGM would have many more huge brandname movie franchises if it had not lost its nerve in the 1960s.
There followed in the 70s and 80s massive miscalculation and mismanagement, selling off the crown jewels and yet, and yet, MGM still has a great back library and still has a few staggering brandnames which can mint money (although now mostly for rivals SONY and WARNER BROS for bailout loans they made to MGM).
“The Hobbit” and “Skyfall,” will both make comfortably over $1 billion from cinema run, with perhaps treble from DVD, online, TV, merchandising over the next twenty years. Moreover the next few 007 movies and the two Hobbit sequels will keep the billion dollar movies flowing nicely. To get these made, MGM had to let Sony and Warner Bros. take much of the international cinema and video revenues, in exchange for lending MGM the money to finance the 2012 movie hits.
If only MGM still had the thirty big franchises it should have greenlit in the 1960s to go alongside them.
It gets hard to get back in the game after you miss big opportunities.
Nonetheless on the back of Skyfall and The Hobbit, MGM is refinancing its debt in a deal that will give it the opportunity to invest more in its own films and generic viagra cost possible new media acquisitions.
JP Morgan, Bank of America, Royal Bank of Canada and private lenders are extending MGM’s current credit line from $500 million to about $650 million enabling MGM to pay off SONY and WARNER BROS which lent it the money to finance Skyfall and The Hobbit.
The point is that MGM has not been banking the vast profits from the movies made with its brandnames because it could not finance their production. The main upside of it getting more movies made – and their box office success – is that MGM can now borrow on better terms to finance more projects on its own, rather than co-financing or borrowing from competiter studio partners.
MGM may also try the Facebook, Linkedin, Twitter route to financial well-being. This is to float the company and sell shares to the public.
If only the company had not been bankrupt just a few years ago, if only it had not been in a sorry financial mess in the late 80s and early 90s, if only it had not lost its nerve in the late 1960s. How many more 007 and Hobbits it could have now.
Gary Barber has been the boss since 2010 and just may get the funds to give MGM a new golden age, in which it makes hit movies and keeps the funds to re-invest.
Of course if he wants free lands to build a film and tv studio production facility in the UK, he only needs to talk to us.