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Peter Chernin yearnin' for MGM

January 13, 2010 |  5:42 pm

Peter Chernin would love to get his paws on Metro-Goldwyn-Mayer.

To do that though, Chernin might have to team up with his former employer, Rupert Murdoch's News Corp., where Chernin served for years as president and chief operating officer until leaving that post last June.

CHERNINMURDOCH While News Corp., which owns the Fox movie and TV studio and bankrolls Chernin's new production company, has not formulated any plan to bid for MGM, with or without Chernin's involvement, there is one possibility that could see the two unite.

According to people close to Chernin, under such a scenario, he would fold his recently launched production deal at Fox and its existing slate of movie and TV projects into MGM and oversee all new productions made under the historic trademark including any James Bond sequels and movies based on "The Hobbit."

Chernin would have an equity stake in the entity, but News Corp. would be the primary owner with or without a financial partner(s) if it were to fund an acquisition of MGM, which has about 4,000 titles in its library.

As one person with knowledge of the potential arrangement explained, this would give Chernin a way to leverage his production assets and revitalize new production at MGM, whose only release in 2009 was the remake of "Fame," which bombed. MGM no longer has the funds to greenlight new movies. Fox, which already releases MGM's movies on DVDs around the world and in theaters overseas, would distribute all new films and TV shows.

News Corp. declined to comment, and Chernin was traveling and unavailable for comment today.

So far, News Corp. has refused to sign the nondisclosure agreement required by all potential bidders who want access to MGM's books. The agreement as written is too restrictive for the company's liking. But MGM, struggling with nearly $4 billion in debt, is desperately trying to get News Corp. in the bidding game and may be willing to relax the provisions to attract bids from the media giant and other companies that have objected to its restrictive terms.

An auction for MGM is expected to get underway shortly. Initial nonbinding bids are due Friday, and no party has made an offer. 

MGM would like nothing more than to have a bidding war on its hands between Fox and Time Warner Inc., which is considered the most likely buyer because its Warner Bros. studio owns the older MGM library, which does not include the United Artists titles, and half the rights to the "Hobbit" movies through its New Line Cinema unit.

Time Warner is among more than 13 companies, including Lions Gate, Summit Entertainment and Relativity Media, that have signed nondisclosure agreements

-- Claudia Eller

Photo: Peter Chernin and Rupert Murdoch. Credit: Daniel Acker / Bloomberg News