MGM Moving Domestic Distribution to Fox30 May, 2006 By: Thomas K. Arnold
MGM announced Tuesday it will move domestic distribution of its home entertainment releases to 20th Century Fox Home Entertainment, striking a blow to Sony Pictures' U.S. home entertainment division, which had been distributing MGM titles for nearly a year.
MGM's vast library of more than 4,000 movie titles and 10,000-plus episodes of TV series was a critical reason why Sony in September 2004 led a consortium of investors, including giant cable firm Comcast Corp., in a $5 billion deal to purchase MGM.
Sony, which wound up with about 20% of MGM, was said to be hungry for more product for its nascent Blu-ray Disc technology, which is slated to materialize later this year as one of two rival high-definition optical disc formats vying to replace DVD as the public's home viewing format of choice.
But since the deal was struck, investors had second thoughts about unraveling the MGM organization and in October approved the hiring of longtime media executive Harry Sloan as chairman and CEO. The studio subsequently announced it was getting back into movie production and now says it also will re-establish its worldwide television distribution efforts.
To further control its library, the studio is consolidating home entertainment distribution under 20th Century Fox, which already distributes MGM product internationally and is known for its smooth third-party distribution structure in the United States. Fox also is a Blu-ray supporter. In addition, Fox distributes MGM movies theatrically in international markets.
“MGM's motion picture distribution business is growing rapidly,” said Sloan, noting that the studio plans on releasing some 80 new feature films in North America over the next four years.
“We are now ready to turn out attention to our television and home entertainment distribution business,” he said. “In so doing, we have identified another important opportunity to build out our business by returning our worldwide television sales operations inhouse and by consolidating our home entertainment releases with a single distributor.”
Sony Pictures Home Entertainment executives were not available for comment. A statement from Sony corporate, however, noted that both MGM and Fox “are key supporters of the Blu-ray Disc format, which will be of tremendous benefit to consumers as well as the entertainment community overall.”
The changes do not affect Sony's distribution of the upcoming “James Bond” feature Casino Royale, slated to open theatrically in November. Sony and MGM also have extended their “Bond” bond by agreeing to co-produce and co-distribute the next Bond movie.
Additionally, Sony and MGM, along with Revolution Studios, have struck a co-financing arrangement on Rocky Balboa, which is scheduled to be released theatrically by MGM in December.
The Sony statement further said the two companies will “pursue other [joint] ventures, including scan-based distribution, and vigorously support our continuing relationship with our partners to preserve and enhance the value of the MGM brand.”