Media Money with Julia Boorstin

What's Next for MGM?


MGM was hoping to snag a $2 billion offer for its library of films and some big titles like 'The Hobbit' and 'James Bond.' The most MGM drew was a $1.5 billion bid from Time Warner ,  which simply wasn't enough for MGM creditors to sell.

But today a new development: Sources tell me that Time Warner and MGM representatives have had phone conversations about alternative options to Time Warner's straight up bid. They haven't yet met to discuss these alternatives, and they haven't set a meeting time, but the phone interactions seem to have opened the door to a potential new solution.

MGM rejected an offer from Lionsgate as too low — Time Warner was MGM's only viable buyout offer. But a couple of private equity players, including Lee Blavatnik's Access Industries have proposed major investments in MGM. Access wants to infuse several hundred million dollars in cash in order to help restructure the company's heavy $3.7 debt load, to keep it operating, and try to grow cash flow.

MGM did not bite on this offer; we'll see how Time Warner structures its proposal.

Time Warner could partner with MGM, tapping into its intellectual property, and lending its moviemaking expertise, while MGM restructures.

And without a buyer to save it, MGM will have to restructure. It's expected to file for bankruptcy — its plan will have to be approved by a majority of its approximately 150 creditors.