MGM Thrown A Lifeline

Following on from last week’s report that Metro-Goldwyn-Mayer Inc., one of Hollywood’s oldest studios was on the brink of bankruptcy, it’s my pleasure to tell FilmShaft readers that MGM have been thrown a lifeline from the very creditors who days ago would have seen the famous studio picked to pieces.

Poetic isn’t it?

MGM has secured the key financing it needed to continue with it’s production slate – which includes the Warner Bros/New Line project The Hobbit, as creditors have agreed to defer interest payments on the company’s $3.5 billion debts.

Just hours after my initial report, J.P. Morgan endorsed MGM’s offer to defer interest payments for three months in order to cover their overheads and move forward with their production slate for the remainder of the year.

Central to the decision was MGM’s 50% share of The Hobbit franchise, which without the vital lifeline may not have seen production. According to The Hollywood Reporter, lucrative franchises including The Hobbit and the James Bond series are needed to continue in order for the studio to maintain market value and investors to see a reasonable return.

Tags: hobbit, mgm