MGM: Lots of debt, few movies

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Debt-burdened Metro-Goldwyn-Mayer Inc. has hired investment banking firm Moelis & Co. to advise the studio in attempts to restructure its $3.7-billion loan.

MGM chief Harry Sloan is conducting a conference call with MGM’s lenders today -- there are some 140 in total, but all weren’t on the line -- to discuss the company’s fiscal year-end results and, the studio disclosed in a statement, is ‘exploring options for optimizing its capital structure.’ In other words, MGM is drowning in debt and needs, like Sumner Redstone, to refinance.

To dampen fear that the studio must be on the verge of BK as many have speculated, the privately held company whose investors include Sony Corp. and cable giant Comcast Corp., stated that cash flow for the fiscal year ended March 31 ‘was in line with its budget and that the company is in compliance with all loan covenants.’ MGM also said it is ‘committed to its business plan, which calls for it to remain independent, continue its motion picture and television activities and leverage the value of its film library.’

Meanwhile, MGM has not had a film in theaters since last December when it released the World War II drama ‘Valkyrie,’ starring Tom Cruise, which despite being widely mocked generated nearly $200 million in worldwide ticket sales. It won’t have another film out until the fall, when it releases a remake of ‘Fame.’

-- Claudia Eller