2:15 PM UPDATE: I’ve just learned from film financing sources that MGM Studios bonds are “running like fucking crazy” today and are suddenly pricing up “very high” in trading. The reason? Because Carl Icahn is now in the game. My sources say Icahn is buying up bonds “like a bat out of hell. He’s in Carl mode: buy first, ask later, and then throw lawyers at it”. In terms of quantity, one best guess is in the 100s of millions of dollars — but could even be higher. (It’s impossible to know for sure because these bonds are privately traded. But, to put this in perspective, the Steering Committee of the creditors is made up of the Top 10 bondholders. The biggest holder right now has about $350M of nominal value of the bonds. The 10th person on that committee has about $75M.)
It’s thought that Icahn may want to take over all of MGM without the studio going through some kind of bankruptcy proceeding. Still, it will be very difficult for Icahn to buy a significant amount of the bonds without the price going up dramatically. Because the bonds are not heavily traded, when they are bought or sold in big numbers there occur steep increases or decreases in pricing. There are $3.7 billion of nominal value bonds out there. Given that big amount, it’s going to be extremely difficult for somebody to buy a sufficient amount of the bonds to have control over MGM’s fate. To do this before any bankruptcy proceeding could mean “he’s going to have a mess on his hands,” an insider sighed to me. His buying follows phone calls yesterday between bondholders and bankers who declared MGM “a disaster” Personally, I’m for anyone or anything that keeps the studio intact and people in their jobs.
As for Icahn’s intentions for MGM, film financing circles think he’s going after the studio because he wants it for his son. True, Icahn wanted to give one of the four Lionsgate board seats he was seeking to his 29-year-old offspring Brett. A Princeton grad like his dad, Brett worked for years under the radar as an analyst for his dad’s investment company. He has been one of 10 young traders moving the firm’s cash and its hedge fund, which the family started two years ago with $1 billion. And he serves on the board of several companies wholly or partly owned by his dadirms. He has shown more than a passing interest in the entertainment biz by raising money (with a chunk from dad) to launch a social network/film production tool that brings film creatives and movie fans together to make movies, and by founding an interactive software publishing company which is controlled by his dad.
Don’t forget that Icahn is still a huge shareholder and debtholder of Lionsgate and sought seats on that board but was rebuffed by management. That’s because the company thinks of Icahn as the proverbial Barbarian At The Gate, the guy who masquerades as a shareholder activist when he’s really a corporate raider, the father who wants Lionsgate as a showbiz future for his son. Icahn, on the other hand, sees a mismanaged mini-major not fully exploiting its potential (like that huge library) to get its share price out of the doghouse, and then led an unsuccessful tender offer for Lionsgate debt, didn’t wage a proxy fight for the September shareholders meetings, and is now nowhere with that studio. Maybe he can get somewhere with distressed MGM now.
I hope Icahn and his son intend to do something productive with MGM, like rebuild it as a functioning film producer and distributor. Because deep down, I don’t really care who owns it, as long as it’s a viable competitive company.
I agree. It’s all about execution and turning MGM into a viable competitive enterprise. Icahn has a huge impact on Yahoo and other companies he’s been involved in. I’d be bullish on MGM is the Icahn clan becomes more deeply involved.
Brett sounds like a spoiled prick. What does he know about running a studio? He will run MGM into the ground.
Really? Do you know him?
Didn’t think so.
Good point Teddy.
No one seems to know much at all about Brett Icahn outside of a few basic facts about his family, education and employment. I don’t see him in the tabloid media with the other spawn of the wealthy, which at least earns him the benefit of the doubt in my book.
Besides, it’s not like he can do any worse than some of the folks that turned MGM from the number one movie company in the world into the broken shell it is today. I hope he turns out to be a studio-savant who makes MGM a success. Because the movies, as both a business and an art, needs a variety of active competition to thrive.
MGM has already been run into the ground.
Too late. Its already been run into the ground.
easy…it doesn’t matter if he knows how to run a studio in particular or not if he knows how/has the resources to manage a big business and if he can just find the right people to work under him.
I’d love to see another studio financing stuff so we can have more movies and TV shows to work on (webisodes for a copy and credit aren’t exactly cutting it for me right now)
As opposed to the current owners?
The Lion will ROAR again… this town needs to keep buyers and studios alive — or the town will end up having ONE studio, called The Studio — which controls everything… and creativity will really be dead. So, let’s not name call… and let’s call for keeping hope alive.
“He will run MGM into the ground.”
Hasn’t MGM already been run into the ground and that is why MGM is in this current financial peril?
It is a great play for CI. The bondholders will ride the tide for long term value. His basis is way below the current value of the bondholders. Where are they going to go? No real risk capital in the market, and what is sitting on the sidelines is waiting for the trucks to back up with realesate to unload. As far as the BK. Bring it on…In this market it will give him the time he needs. Sell the parts and keep what he wants. Mr. Icahn is not about to make a mistake with this play. When Comcast is finished they will want and need new content…The lion will roar on cable.
4,000+ titles goes a long way.
these mgm stories are like watching a slow motion fatal car accident.
i hope it’s brief and quick to put the staff and investors out of their misery.
there is no functioning business at MGM any more, and there hasn’t been for many years.
does anyone with a script take it to MGM? Does any agent get an “attaboy” from his clients for setting something up there?
this is a carve up the body game for the lenders and none of us in this town have anything to gain, and most of us don’t even have a stake in the outcome.
“He will run MGM into the ground”???
Ummm, that already happened dude. That’s why MGM is on the verge of being sold off piece by piece, like charred scrap metal from a plane crash. If the guy wants to bring his duct tape and a cash infusion to get the old beauty flying once again, more power to him. He can’t do any worse than the last 3 or 4 regimes.
Bond$, James Bond$
His daughter also has an interest in film… look at “The Reader” credits.
no one has mentioned Carl Icahn’s close ties with Frank Biondi, who certainly wants to run a studio again… bet his name starts to pop up soon…
the bane of jon feltheimer’s existence
“He has shown more than a passing interest in the entertainment biz by raising money (with a chunk from dad) to launch a social network/film production tool that brings film creatives and movie fans together to make movies,”
Hell, by trying to open up the industry production pool, he’s showing some smarts right there. Now if Brett can prove he’s got some real studio-head creative instincts–in that he knows what projects to green-light and who to make deals with–MGM might have a ghost of a chance.
Do bats in hell typically purchase a lot of bonds?
You guys are experts aren’t you? Have all the inside information? I guess that’s why you’re all hiding behind aliases on a comment board.
Get a life, wannabes.
“queed” is an alias, isn’t it? Why are YOU hiding behind an alias?
What, you’ve not heard of the “South of Pico Queeds”?
The problem with MGM isn’t who runs the company. It’s finding someone who is going to give the studio a couple of billion dollars just to get them taken seriously again.
The simple fact of the matter is MGM’s pedigree means it will forever think of itself as being on par with the Warner Bros and Paramount’s of this World. But with a single theatrical release this year (that unsurprisingly bombed) it’s nearest competitor is probably the likes of Overture Films.
MGM ‘died’ five years ago. It’s just it’s zombie corpse that’s still stumbling around moaning and rotting away quietly.
Better to have a kid with a passion for the biz and a wealthy father to indulge him running things than a bunch of lawyers and accountants (which is what every other studio has). Bring it on, Brett and Carl. Let’s see whatcha got.
I would like to see MGM in capable hands. Make some pictures that do not cost an arm and a leg, but are very marketable. Make some family films that the entire family will go to see and be able to discuss them at the dinner table. I knew MGM when we made 52 pictures in one year. I would love to see that happen again.
I second that –!! I just so happen to know they have a few gems in development — so have faith. And it’s not a remake…
This is called showbiz and there’s “so-called” evil execs everywhere, but there’s also creative people fighting the good fight. So, watch the generalizations and never listen to the nay-sayers… if those folks won out, Hollywood would’ve been dead years ago.
I agree, it was one of the best studios in Hollywood, it would be great to se it get back on top. This would give more competition in the movie bussiness. Go brett and Carl
“M” – LOL!! love your post.
I Hope he does revitalize MGM to what it had been in it glorious days of years ago, rather than an asset play as other investors have done. And more importantly I Do hope Icahn can use creative talent to energize this studio and not drive it into the ground as he had done with TWA….
MGM has been getting gutted for two decades. It’s not even MPAA anymore. The fact that it no longer even has a studio lot is probably the BEST thing that can be said about its recent history.
In a fantasy world, somebody, maybe Icahn, will strip it from the claws of bankruptcy and rebuild it into a major studio, maybe even rejoining the MPAA as a player.
Hell, maybe MGM will buy NBC network from GE (let Comcast have the cable) and rebuild NBC, too. (Does anyone have the balls to cancel Leno and try to save network TV?)
Leno being one of the only viewing anchor saves on network, would you cancel your life jacket on the Titanic?
Till better talent comes in and comes through, Leno is here to stay, so send me talent worth the wait.
why doesn’t Time-Warner/AOL buy up MGM because they own most (if not all) of the film library of the studio!
MGM is still a great brand. But it needs new management and it needs it quickly. You talk to anyone over the age of 35 and they’ve heard of MGM, they don’t care what goes on behind the scenes. If anyone can do something here it’s Icahn. God knows the current group have run the studio into the ground.
The worst thing was selling MGM to the Sony consortium. People like Kirk and Carl are destructive individuals who like to rip companies to shreds. Keeping only what they want and killing American icons. These people are the reason why companies like Chrysler and Pan Am are know more. Because Carl sold MGM twice before is the reason MGM could not be the company it once was. Time Warner has show that the MGM library is worth something. When they distributed the library for Panthe Corporation they gave equal treatment and high status to the name brand. Even the Wizard of Oz under Turner/TimeWarner has kept it’s luster. Shame the on greedy people like Carl and Kirk. Give MGM to TimeWarner. As for Lionsgate, they are good. They have grown too fast and will fall even faster. They can’t keep pace with the giants. Lionsgate should remove itself from the bidding before it too will be the next MGM.
the best for mgm if to become a j.v. with warner and have the most intersting film library of the world, in fact the real mgm titles are in the hand of warner, and they are doing a poor job with it.