News Corp. talks to acquire MGM reach impasse
News Corp.'s negotiations to acquire troubled Metro-Goldwyn-Mayer Inc. have reached an impasse over the deal's nondisclosure agreement, according to a person close to the negotiations who requested anonymity.
MGM has an unusually restrictive nondisclosure clause that executives at News Corp.'s Fox Studio felt would place the company at risk if they signed it, the person said.
Fox is interested in MGM's valuable 4,000-title film library, which includes the well-known James Bond and "Pink Panther" series. News Corp., or any other buyer, could make new installments of these series. The studio also has an interest in the forthcoming "Hobbit" movies that will be produced by "Lord of the Rings" director Peter Jackson.
MGM, once one of the premiere studios in Hollywood, has released only one film this year: a remake of the 1980s dance film "Fame," which was a box office disappointment.
This summer, MGM Chief Executive Harry Sloan was ousted from the debt-ridden independent studio and replaced by Stephen F. Cooper, a restructuring expert who previously led Enron Corp.
In November, the studio reached an agreement with lenders to forgo interest payments on its crushing $3.7-billion debt until Jan. 31. MGM is trying to restructure its debt to avoid bankruptcy.
-- Dawn C. Chmielewski, Ben Fritz and Claudia Eller