Sony finalizing distribution and co-financing deal with MGM, including next two 'Bond' films
Newly relaunched Metro-Goldwyn-Mayer is finalizing a deal for Sony Pictures to handle worldwide distribution of its movies and DVDs and for the two studios to co-finance upcoming films, according to people familiar with the situation.
As part of the arrangement under discussion, Sony would fund half of MGM's next James Bond movie, which is planned for release Nov. 9, 2012, and 25% of a potential follow-up. Sony co-financed and released MGM's last two Bond movies, "Casino Royale" and "Quantum of Solace," making it a logical home for Hollywood's longest-running franchise.
Sony would also release all future films made by MGM and the studio's already completed movies "Red Dawn" and "Cabin in the Woods," as well as handle sales of its 4,000-title library on DVD and digital platforms.
Though talks are far along, people close to the discussions cautioned that there are a number of complex terms still to be hammered out and that it's not certain a deal will be completed. MGM has talked to several other studios, including Paramount Pictures, 20th Century Fox and Warner Bros., but Sony has been more aggressive in negotiations, the people said.
Since MGM emerged from bankruptcy in December and secured a $500-million credit facility, one of the top priorities for its new chief executives, Gary Barber and Roger Birnbaum, has been landing a distribution partner. The CEOs have laid off staff and opted not to release and market movies with the studio's reduced resources. MGM, which stopped developing and producing movies because of its financial woes, does not have its own slate ready to be made.
As a result, Barber and Birnbaum have been seeking an overall deal with a partner that includes not only distribution but also an opportunity to co-finance movies already in the works. MGM will probably not have any movies ready for release until late 2012.
MGM is hoping to co-finance several Sony movies that are already in or headed to production. One under discussion is director David Fincher's remake of the Swedish hit "The Girl With the Dragon Tattoo." MGM executives also wanted to invest in Sony's 2012 reboot of "Spider-Man," one person familiar with the situation said, but were rebuffed.
Sony, however, has agreed to accept a low distribution fee of about 8% to secure the agreement with MGM, according to a person close to the matter. An 8% distribution fee is on the low end for the industry, where typically the range is 8% to 12%.
Sony previously distributed MGM's DVD library after it acquired a stake in the studio when it was sold to a consortium of investors in 2005. However, a year later it lost control of the library to Fox after MGM management was disappointed by the sales of its titles, which include such classics as "Dr. Zhivago" and "Rocky."
Fox's deal to distribute the MGM library worldwide expires in September.
Last month, MGM made a separate deal with Warner Bros. to fully finance and release two movies based on "The Hobbit," for which MGM owns half the rights.
Spokespeople for MGM and Sony declined to comment.
-- Ben Fritz
Photo: Daniel Craig in the James Bond movie "Quantum of Solace." Credit: Sony Pictures.