Harry Sloan signs new three-year deal at MGM
Ever since Harry Sloan was hired to run MGM studios in the fall of 2005, Hollywood has wondered whether the former lawyer and media entrepreneur would be able to transform the beleaguered studio into a viable competitor in the movie business.
So far that hasn’t happened at MGM nor at its smaller sister studio, United Artists, headed by Tom Cruise and his producing partner Paula Wagner. Rumors have continued to plague the hit-starved, debt- ridden MGM that its investors are restless and unhappy with the poor results and that Sloan’s job may be in jeopardy. Yet, despite all the nagging speculation, it was announced today that Sloan signed a new three-year deal to continue as chairman and chief executive of MGM.
In a statement, Jonathan Nelson, chief executive of MGM lead investor Providence Equity Partners, said “We appreciate Harry’s commitment to building value at MGM and believe he is executing the right strategy for the company." Providence was part of a consortium of investors, including Texas Pacific Group, Sony Corp. of America and cable giant Comcast Corp. that bought the then 80-year-old studio from billionaire Kirk Kerkorian for about $5 billion in 2005.
The investors appear to be banking on Sloan’s latest strategy to shift MGM from a mere distributor of movies made by outside production outfits, such as the Weinstein Co. -- a plan that has largely been disastrous -- to a financier and producer of its own films, including sequels and remakes culled from its vast library of titles that include “The Thomas Crown Affair” and “Fame.” To that end, Sloan recently hired former Universal Pictures movie executive Mary Parent, who has been aggressively buying up scripts, books and movie pitches in hopes of turning around MGM’s sagging fortunes. The problem is, Sloan has had trouble securing the hundreds of millions of dollars of new film financing that MGM desperately needs to fund Parent’s ambitious plans.
Earlier, Sloan succeeded in raising a $500 million revolving fund for United Artists after bringing in Cruise and Wagner to revitalize the label. But, UA, which releases its movies through MGM, is also struggling. The company’s debut picture, “Lions For Lambs,” a political drama directed by Robert Redford and starring Cruise and Meryl Streep, was an embarrassing bomb, grossing just $14.9 million domestically. The studio’s next movie, “Valkyrie,” also starring Cruise, was a troubled production whose original summer ‘08 release has been back pushed to next year.
Meanwhile, MGM has managed to maintain an awful track record at the box office with such recent losers as “Charlie Bartlett,” starring Robert Downey Jr. which grossed $3.9 million in the U.S., and the limited releases “Pathology,” which took in $108,662, and “Deal,” which had ticket sales of $57,180. No, those are not typos.
To his credit, Sloan was instrumental in successfully leading sticky negotiations to move forward the production of two movies based on J.R.R. Tolkien’s classic novel “The Hobbit” in partnership with New Line Cinema, now under Warner Bros.; for landing an international theatrical and worldwide DVD distribution deal with 20th Century Fox for MGM movies; and for setting up a global TV sales force.
In partnership with Sony, MGM also has new James Bond and "Pink Panther" sequels due in theaters this year.
So, now that Sloan has just bought himself more time to prove himself, the pressure is on to accomplish what has so far eluded him: making MGM and UA bona fide players in Hollywood. Sloan has never run a major studio before, though he had success in the past investing and leading three media companies, SBS Broadcasting, Lionsgate Entertainment Corp. and New World Entertainment.
Come on Harry, show us your stuff.
-- Claudia Eller
Photo: Harry Sloan
Credit: Associated Press
Questions? Comments? Email: email@example.com