MGM Cleared to Start Production on 'The Hobbit'

It has already been a long road for The Hobbit to make it to theaters. Thanks to the New Line/Tolkien Trust lawsuit that dragged on for a few years, the project couldn't actively move forward until this summer, even though development and pre-production has been going on for a while. Once that was resolved, MGM found itself almost $4 billion in debt, possibly resulting in a sale of the property and/or James Bond just to stay afloat. The Hollywood Reporter detailed last night a plan to keep The Hobbit at MGM. The company's CEO, Steve Cooper, announced a plan to defer payments on its debt load for three months to start bankrolling the project, a move backed by J.P. Morgan Chase. In return for the defered payments, the lender will exert a few changes to the existing terms of the debt, probably putting MGM over a barrel in the short term in hopes of taking some of that Hobbit money to cut into the unworkable amount of money the studio owes. While there's no exact timeline for when the production will start - because, after all, there was really no movie to start until now - it is expected that Peter Jackson and Guillermo del Toro will have the script where they want it by Thanksgiving or so, after which the studio will pass it or request changes. At this stage, I would think Jackson and del Toro are in the best possible position. The release date (unless that's some part of the collateral damage in all of this) is November 2011, so the creative team really can't do too much work on the script the further we go into 2010, especially with both films in the series slated to film concurrently or consecutively.

Comments

[beatnik2]

This is a tragic tale of Hollywood's greatest, yet woefully mismanaged studio. MGM was the mightest movie studio in Hollywood, but the continual rivolving door of owners, who sold off bits and pieces of the the studio to line their own pockets, has left a fabled studio that is too small and week to survive in the conglomerate world of Hollywood today. MGM no longer owns the Culver City lot. Sony, with deep pockets to maintain the studio lot, now owns it. The MGM film lab (remember Metrocolor?) was sold off to Technicolor thirty some years ago. MGM records, a highly profitable record company, was sold off in the early 70"s. The backlot was sold off to make condos also in the early 70's by the biggest robber baron of them all, Kirk Kerkorian to finace and build his casino empire. Ted Turner and now Warner Bros. owns the greatest asset of all, the pre-1986 MGM film library consisting of some of the greatest movies every made, including the RKO and pre-1948 Warner Bros film library. All the selling off of these profitable assets has left the once mighty MGM lion looking more like the stuffed head of a lion on the wall of some mogol's den.
I hope the Hobbit is made by MGM (and Warner Bros.) and is a success, if only so that the wrongs done to this once might studio are righted, and MGM will exist for another 75 years.