Will MGM be another victim of the economy ... or poor financing?
According to a report in today's Wall Street Journal, Metro-Goldwyn-Mayer Inc. has replaced Chief Executive Officer Harry Sloan and hired restructuring expert Stephen Cooper. Cooper joins two other MGM executives in an office of Chief Executive: Mary Parent, the chairwoman of MGM's motion-picture group; and Bedi Singh, the company's chief financial officer. Ousted CEO Sloan will remain as chairman.
Nothing good can come out the latest management shakeup. For a studio which has made so many history and toga movies, it should know better than to be ruled by a triumvirate.
Worse, as reported by the Journal, "The 62-year-old Mr. Cooper's most recent assignment didn't work out well. Carlyle Group hired him last year to rescue Hawaiian Telcom, a land-line business the private-equity firm had acquired from Verizon Communications Inc. Those efforts failed when the company filed for Chapter 11 bankruptcy protection last December."
MGM has a fantastic and valuable film library, but its only active franchise is the James Bond films. The return to the Pink Panther has had limited success. It will be producing Fame for this fall and extending the Stargate franchise with another television series, but frankly it has a weak, recycled slate and crippling debt, generated by the purchase from Kirk Kerkorian. A history of bad financing has bloodied what was once the best Hollywood has to offer.
If MGM hopes to overcome its financial woes, the Triumvirate needs to kick open the doors to the vault and encourage a wide array of filmmakers to explore how best to revitalize these properties, perhaps taking a back-end participation so that new voices and new media can be added to the mix. If MGM follows the same old rules, it will be managing its assets through Chapter 11 in no time.
