Goldman Sachs and Deutsche Bank have withdrawn their commitment to underwrite a US$1 billion deal to finance films for Metro-Goldwyn-Mayer, the Financial Times reports.
The FT cited the ongoing credit crunch as the reason behind Goldman Sachs and Deutsche Bank decision to reverse their position on the MGM deal.
The financing would have provided funds for films including The Hobbit, an MGM co-production with New Line Entertainment, and the fourth installment in the Terminator franchise. It is also likely that funds would have gone towards the next James Bond film, an MGM co-production with Sony.
While the financing has not been completely abandoned, the banks have moved from an underwriting commitment to a “best efforts” commitment to complete the financing.
MGM is owned by the Texas Pacific Group, Providence Equity Partners, Sony and Comcast. The four shareholders bought the studio and its 4,000-title library from Kirk Kerkorian for $4.8bn.