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

Comments

[Rick Mitchell]

You know, Fox, William that is, owned MGM for about six months 80 years ago until the combination of an auto accident, the stock market crash, and L.B. Mayer's machinations with the Hoover administration scotched the deal and sent the company down the path that would lead to Rupert's ownership. A history lesson there?

Rick Mitchell
Film Editor/Film Historian

[Arye Michael Bendeer]

Rupert Murdoch has besmirched the name of one major studio, now he's after another once burnished image.

Just out of love for the old dream factories, I hope he doesn't get his paws on the MGM lion.

[Joe]

Surely there's a buyer out there other than Murdoch!? The Bond franchise alone must be worth billions over the long haul.

[K]

MGM was "once" a powerful studio, around 1959. I believe they hired James Aubrey, the ex president of CBS, to rebuild it in the seventies. From my layperson's perspective, MGM hasn't had decent management in years. Whoever owns MGM will probably just use it to release dvds from the libraries they own, like Samuel Goldwyn, Orion, United Artists and post 1985 MGM productions. Time Warner should buy MGM so all MGM titles can be released through Warner Brothers, including pre 1985 and post 1985 titles.