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MGM Profit Drops in Q4

25 Feb, 2005 By: Erik Gruenwedel

Despite strong sales of Walking Tall, Saved, television’s “Stargate SG-1,” and catalog titles The Good, the Bad and the Ugly and The Pink Panther, Metro-Goldwyn-Mayer posted a decreased fourth-quarter (ended Dec. 31, 2004) net income of $38.5 million, or 16 cents per share, compared to $60.3 million, or 25 cents per share, during the same year-ago period.

The legendary studio, which in September entered into an agreement to be acquired by a consortium of companies led by Sony Corp. and Comcast, had quarterly revenue of more than $453 million compared to $543.1 million the previous year.

MGM does not separate home entertainment revenue from theatrical and television.

MGM shareholders, who in December approved of the acquisition, will receive $12 per share, or more than $2.9 billion, while Sony and Co., including Providence Equity Partners, Texas Pacific Group and DLJ Merchant Banking Partners, assume nearly $2 billion in MGM debt.

The deal, which assumed $2.1 million in quarterly charges and has received clearance from the Department of Justice, remains subject to approval from the European Union.

When completed, MGM would continue to operate as a separate entity, with Sony Pictures and Sony Pictures Home Entertainment, respectively, distributing first-run films, TV and DVD catalog of more than 4,000 titles.

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