MGM Reportedly Weeks Away From Being Auctioned

Over the past couple of years, the movie studios have really started to feel the effects of a bad economy. Not necessarily our bad economy, but certainly their own. Boutique brands like Paramount Vantage have gone under, indie start-ups have suffered the same fate, Miramax barely exists, and now it looks like MGM will finally be put out of its misery. One of the longest running and most recognizable brands in show business is billions of dollars in debt, but Variety cites several sources that The Lion will be sold off in the coming weeks. While it does have Bond and The Hobbit in its back pocket, the studio only released Fame this year. And it didn't alleviate much of that debt. There's no official word that MGM is coming to an end, and Variety says that because of the way all this debt is structured, one prominent option is that the studio would be auctioned, stripped for parts as it were. So that could mean one company buying the catalog of old films and another one picking up the name MGM. Wiping away $3.7 billion in debt is complicated business. Writes Variety, "Any sort of auction would need approval of a two-thirds majority of the bondholders...Some sources believe a pre-packaged bankruptcy is still an option, and there is still an expectation that Time-Warner might make a last eleventh hour bid." You may also know that NBC/Universal carries a $30 billion pricetag, and it could also have new custodians in the coming months. Obviously, with the debt at MGM, if the bondholders could get this wrapped up in 2009, that's the better alternative. And because this is a buyer's market, if it's going to happen, it probably will come to pass fairly soon.