Another roar from MGM's tired lion, which is struggling under a $4 billion debt load.
I've confirmed that Spyglass founders Gary Barber and Roger Birnbaum have signed a letter of intent to make them Co-CEOs of MGM.
Metro-Goldwyn-Mayer Studios
The letter is non-binding, but is a key first step to putting these two execs atop the troubled, slimmed-down studio. MGM's 100 creditors still need to figure out their financial restructuring and their long-term business plan for the studio, but this means that when they sort out a bankruptcy plan, Spyglass' chiefs will be on board.
This news comes exactly one week before MGM's next interest payment is due after six extensions. MGM's leadership now needs to get its 100 credit owners and its board of directors to approve the deal and file a pre-packaged bankruptcy. At this point it's unlikely for this to happen in the next week, so MGM will likely ask for another extension to its debt payments.
For MGM to work as a mini studio under Barber and Birnbaum, it's going to need some cash. Back when MGM was courting potential buyers like Time Warner and Lionsgate, Qualia Capital proposed infusing $500 million into the studio to keep it operating. That offer still stands, so we'll see if Qualia is part of MGM's new plan.
Check out my blog from two weeks ago predicting this move
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