Sony roars....
 

SONY BUYS MGM
Raised offer seals the deal
By Michael Learmonth 9/13/2004

--------------------------------------------------------------------------------

SEPT. 13 | NEW YORK--A group led by Sony Corp. agreed in principle to terms with Metro Goldwyn Mayer to acquire the studio, hours after presumed frontrunner Time Warner ankled the bidding.

Time Warner pulled out of the auction early Monday, saying the bidding for the Lion, which owns the James Bond, Rocky and Pink Panther film franchises, had gotten too high.

Sony agreed to pay $12 a share for the studio, which amounts to $2.94 billion plus the assumption of $2 billion in debt. Sony, backed by Texas Pacific Group and Providence Equity Partners, raised its bid during the weekend, triggering Time Warner's withdrawal.

The debt financing for Sony's renewed bid was led by J.P. Morgan Chase and joined by Credit Suisse First Boston.

Key to Sony's apparent victory is the involvement of Comcast Corp., which put no money into the deal but agreed to package Sony and MGM content into a number of as-yet-undetermined movie channels and video-on-demand offerings.

The agreement allowed Sony to justify a higher price for the Lion. In return, Sony offered Comcast the opportunity to become a minority investor in the Sony-MGM entity at a later date.

Time Warner had been negotiating with MGM since April and had, at certain points in the process, assumed it had a deal. But in the end, Time Warner was unwilling to budge above its $11-per-share offer and decided not to participate in a drawn-out bidding process that could last for weeks.

Sony raised its offer during the weekend and proposed exclusive negotiations with MGM and a $150 million payment in the event a deal could not be reached.

Until the weekend, MGM management had been expected to greenlight Time Warner's $4.5 billion bid. Although Time Warner's bid was lower, it was thought to have an advantage because of its simpler structure.

The consortium led by Sony initially had problems agreeing on a structure for the deal, and MGM topper Kirk Kerkorian was said to want a single check to cover the cost of the deal.

Michael Learmonth writes for VB sister publication Daily Variety.



Sony now has one of the biggest movie libraries. Looks like we'll get those James Bond superbits afterall...

Not sure if this is a good thing or not. Warner already has the classic MGM library and I really don't think there was much other than the Bond Library worth paying that kind of money for.

If anything it just means that many more films released in Sony's HD-DVD format. Can't wait for all that confusion to start.

Unfortunately, it probably also means more MAR bare-bones releases to fill Walmart's $5.50 bins (and people were complaining before about non-anamorphic 1:66 releases from MGM.)

It would have been really strange if Sony had let it slip out of their hands. I've foreseen that :) Sony perfectly knows what it wants and what it aims at.

Well looks like we can forget the Hobbit ever happening, unless NL and Sony can come up with an agreement to split costs/profits, but that seems unlikely. Bummer.

Looks like Sony is instantly ahead in the next-generation DVD race. Bummer about The Hobbit, though...

I don't think it was any particular title (although MGM does have Pink Panther, Rocky, 007 series)... I think it was the large number of catalog titles available. Thousands of them. Of course, a lot of them are crap and/or have very small fan bases. But Sony's thought was that they now have thousands and thousands of titles to help them win the DVD format war.

Warner is so much better with their releases of classic film. This is a big negative in my opinion.

Will they keep the MGM name or will they call everything Sony movies?

Hmm, finally looks like this deal is going through.

And yes, it seems that the main reason that Sony wanted MGM is to increase their film library before they start releasing Blu-Ray discs (probably starting next year). This gives them quite a large catalogue of titles as they get ready for the upcoming format war.

Holy Hell!

Okay, the possibilities...

- dts on MGM films that deserve them. MGM have done dts twice - one for Die Another Day, and one for the Universal co-production, Hannibal.

- CTHV are, as you may have guessed, happy to do rereleases. This might mean better versions of some MGM DVDs - especially the ones that were non-anamorphic 1.66:1.

This isn't to say it'll happen of course. Why touch what isn't broken? LGF have yet to do another Terminator 2 disc, after all... or do a Signature Series release of an Artisan movie...
I hope they keep the MGM name. It's iconic.

If you bought Disney, wouldn't you still call the theme park "Walt Disney World"? I would.

Sony sucks. Get ready for over-priced crap re-re-re-re-releases.

wow, this is such a big event. Really.. wow.

I wonder who pushed this inside Sony. There is a big fight internally between the hardware and the content people. I've hard stories that the content people are scared of piracy and are pushing to cripple a lot of the hardware that is designed. I wonder if the content people pushed this in order to control the content for future DVD and next generation technologies?

Die Another Day has a DTS track.

Indeed they did, db. How silly of me.

Golden Eye (DTS) laserdisc also by MGM.

pssst... this is a DVD forum. :D

Keep in mind that Warner Brothers had already acquired the "lion's share" of all MGM films made before 1986 when it swallowed up Turner Entertainment (Ted Turner had purchased the MGM library in that year).

AFAIK, MGM/UA's major holdings include:

- MGM films made from 1986 onward
- All of the United Artists films (including the Rocky, James Bond, and Pink Panther films, Rain Man, and Woody Allen's early films)
- Orion films
- Polygram films made before 1996

This sucks. I know Blu-Ray is technically a better format than HD-DVD, but Sony is arguably the worst major studio around right now. WB might not support DTS, but otherwise they consistently put out some of the best discs around, and the thought of them gaining access to MGM's classic film library was enticing.

Now we're on the verge of a major format war, and I don't know who to root for.

They already own MGM's classic film library.

DJ

Woohoo James Bond in Superbit, I'm all there!!!

Not all of it. There are plenty of classic MGM flicks that WB doesn't have the rights to. The Apartment and Sweet Smell of Success are two that come to mind.

This won't harm the Wild at Heart SE this december will it?

Warner doesn't own the United Artists film library which includes The Apartment and the Bond films. However, Warner does own the MGM library which combined with their own and the RKO library makes them unsurpassed in classic cinema.

Regarding DTS and MGM- the two Thunderbirds movies have DTS and the new SE of Species and Rocky will have DTS.

As far as Sony aquiring MGM is concerned, I think that this will help launch a HD format quicker.

Just my .02