Things were going so well for Ron Grover in his piece about MGM's slow plunge toward insolvency. There was the news that the studio's creditors declined an equity stake in the company as part of its restructuring, and then, once again, there were those mind-blowing figures we're so used to reading in any discussion of MGM's flagging fortunes: $3.7 billion in debt, with the creditors balking at another $1.2 billion in new debt to help get the studio's production slate going. Instead, they want a buyer -- and they're not above selling the Lion for parts, including The Hobbit, the vast film library and the James Bond franchise. Which is where it gets a little tricky.
According to Grover's report, recently installed studio CEO Stephen Cooper expressed doubt that he could "get more than $1.5 billion for the studio, which is roughly what MGM's rights to the James Bond franchise alone might be worth." That stat isn't attributed to any specific valuation data or comparables, but let's just say the number, like its source, is probably high.
Not that you can't appreciate a little modest inflation in the press to help get the bidding started behind the scenes. Still: $1.5 billion? The last five Bond films grossed a combined $2.3 billion globally, which sounds great until you realize it took 11 years to generate it and MGM only keeps roughly half of it. Add on maybe another $50-$80 million annually going forward based on when a new DVD is released (and whatever other reissues you've got), and you're still waiting almost a generation to turn a actual profit -- by which time you've recast the role at least twice, and who knows if a 60-year-old franchise can even work. Nothing's come close. Of course, this all would also imply that the studio -- which was valued at $5 billion in 2004 -- has lost all of its value outside the Bond franchise, which seems like more than a stretch for an institution with more than 4,000 movies sitting in its vault.
So what's Bond really worth? Who knows? $500 million? $600 million? As suggested last week with another high-gloss Hollywood franchise on the block, throw it on eBay and find out. Anything that preserves MGM's magnificent Hot Tub Time Machine for a timely January release is worth it.
ยท MGM Creditors Press for an Auction [BusinessWeek]