MGM-Sony Video Merger Still Unclear8 Apr, 2005 By: Kurt Indvik
Sony Corp. of America's closing of its acquisition of Metro-Goldwyn-Mayer Inc. did little to clear up questions about the melding of the two home entertainment businesses and the organization of the executive suite.
Sony led a group of companies to acquire MGM.
Blake Thomas, formerly EVP of worldwide marketing for MGM Home Entertainment, has been named EVP of Home Entertainment Distribution. Meanwhile, Benjamin Feingold remains as head of the home entertainment division for Sony Pictures, a spokesperson confirms. A spokesperson for MGM would not comment on the status of MGM Home Entertainment president and COO David Bishop.
Executives from the home media divisions were not made available for interviews, and spokespeople for both companies would not comment on expected significant transition and merger activity in home entertainment. Speculation that some MGM Home Entertainment senior executives, including Bishop, were going to be taking on senior management roles in the merged home entertainment operation, were not addressed by spokespeople or in the formal announcement.
Under terms of the deal, MGM shareholders will receive $12 per share, or more than $2.9 billion, while acquirers Sony, Providence Equity Partners, Texas Pacific Group and DLJ Merchant Banking Partners assume nearly $2 billion in MGM debt.
“Today we begin a new, exciting chapter in the life of MGM,” said Dan Taylor, president of MGM. “With our strong financial and strategic partners, we look forward to building on MGM's exceptional legacy and capitalizing on emerging technologies and markets to provide consumers worldwide more opportunities to enjoy the world's largest modern library of films and television programming.”
It's that library that analysts cite as Sony's target in the acquisition, and one that MGM Home Entertainment executives have been particularly successful in marketing over the past several years and DVD sales have skyrocketed.
Sony Pictures Entertainment will assume certain distribution responsibilities for MGM's library of 4,000 films and more than 10,000 TV episodes, according to the companies' joint statement, In addition, MGM expects to co-finance new films with SPE and co-produce some of these, though the films will be distributed and marketed by SPE.
MGM content will be available on Comcast's video-on-demand platform and on new cable channels operated by Comcast and jointly owned by Comcast, SPE and members of the consortium.
MGM will continue with films already slated for release by the studio, including The Amityville Horror April 15 and The Woods, The Pink Panther and Art School Confidential in the fall.