MGM, the source of that classic lion’s roar embedded in our cultural consciousness is drowning in debt. There have been pieces of news over the last year that allude to MGM’s financial difficulties, it’s become standard for any news on an MGM film to include some reference to the studio’s hopes that this will be the film to start to turn it all around. Cabin in the Woods got delayed unexpectedly for a year in order to convert it to 3D. Bond 23 and The Hobbit have both been nudged further and further down the pipeline, because there simply isn’t any money available to start work in earnest. The studio only managed to release 3 films in 2009 and 3 are slated for 2010, after releasing over a dozen in one capacity or another in 2008. One begins to wonder if even essentially completed projects are being pushed off in order to make the studio more attractive to potential buyers.
Here’s the basic financial rundown: MGM has over $3.7 billion in debt, and the best offers to purchase the company have come in at just $1.5 billion. Those two numbers are pretty damned far apart.
Just to put things in perspective, here’s a rough rundown of all the films that MGM has put out over the last decade, with budget, revenue and net. This is very rough since the incestuous nature of Hollywood releases means that you’ll often see a half dozen different companies with hands in the mix due to production, distribution, etc. Additionally, this doesn’t include the other dozen things a company like MGM does on the side, like straight-to-video, television series, and money laundering. The numbers are culled from Wikipedia and IMDB and as such shouldn’t be used for any book reports, but they give a good idea of the scale of MGM’s operations. Numbers are all in millions.
|2000||Return to Me||24||8||-16|
|2001||Josie and the Pussycats||22||15||-7|
|2001||What’s the Worst that Could Happen?||45||32||-13|
|2002||Die Another Day||142||432||290|
|2003||A Guy Thing||20||17||-3|
|2003||Agent Cody Banks||28||59||31|
|2003||Legally Blonde 2||45||125||80|
|2003||Jeepers Creepers 2||17||63||46|
|2004||Agent Cody Banks 2||26||28||2|
|2005||The Brothers Grimm||88||105||17|
|2005||Into the Blue||50||18||-32|
|2005||Yours, Mine and Ours||45||53||8|
|2005||The Amityville Horror||19||108||89|
|2006||The Pink Panther||80||182||102|
|2006||Basic Instinct 2||70||39||-31|
|2006||School for Scoundrels||35||24||-11|
|2007||The Flying Scotsman||11||1||-10|
|2007||Who’s Your Caddy||7||6||-1|
|2007||Death at a Funeral||9||47||38|
|2007||Lions for Lambs||35||63||28|
|2008||Vicky Christina Barcelona||15||96||81|
|2008||Quantum of Solace||200||586||386|
|2009||Taking of Pelham 123||100||150||50|
Ah, some of those bombs bring back memories, and you can see the blockbuster mentality buried in that profit column. A full 45% of the profits came from the three James Bond films alone.
So they’ve managed to rack up more debt than they even had expenditures in making films, even though the films themselves have made money overall. Just what the fuck are they spending all that money on? Somewhere in the ballpark of $2.7 billion spent making films, and $3.7 billion of debt. It’s largely a rhetorical question, it doesn’t really matter if the money was lost because the MGM Grand fell into a sinkhole or they borrowed money in order to finance their secret underground war with Disney’s cybernetic mice. The point is that one of the big original film companies has managed to detonate its eighty-year-old self by doing stuff other than making films.
They’ve got the rights to the James Bond franchise and the two films of The Hobbit, which is basically a license to print money. Owning the rights to those and going bankrupt is like dying of scurvy when you live in an orange juice factory. There’s mismanagement, there’s incompetence, and then there’s truly epic level stupidity.
(source: The One Ring)