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MGM and Fox extending home entertainment partnership for five years [Updated]

April 14, 2011 | 11:10 am

Marking its second key partnership this week as a newly capitalized independent studio, Metro-Goldwyn-Mayer is on the verge of renewing its worldwide home entertainment agreement with 20th Century Fox through 2016.

Under the pact, Fox will continue to release MGM's catalog of more than 4,000 films and 10,000 television episodes on DVD and Blu-ray around the world, as well as new releases for which it controls the home video rights. Those include the next two James Bond films, which MGM will co-finance with theatrical distributor Sony Pictures.

The renewed arrangement also for the first time gives Fox the right to sell MGM titles on digital platforms, such as Apple's iTunes.

Fox and MGM's current deal was set to expire in September.

The agreement could be announced as soon as today, according to knowledgeable people. [Update, 3:42 p.m.: Fox and MGM have announced that the agreement is completed.]

Since it emerged from bankruptcy in December, MGM's new chief executives Gary Barber and Roger Birnbaum have been seeking theatrical and home video distributors, as the downsized studio doesn't have the capability to do either itself. MGM ultimately didn't sign an overall theatrical distribution partnership, but a more limited agreement announced Wednesday to partner with Sony on the next two "James Bond" sequels and several other pictures over the next five years.

Home video was arguably the most important component, however, as most films generate the majority of their revenue from DVD, Blu-ray and digital sales and rentals, despite a recent downturn in the market. MGM had considered moving its home entertainment deal to another studio, but by early March it became clear it would likely renew the deal with Fox.

Fox has distributed MGM's movies on home video overseas since 1999. In 2006, that partnership expanded to include the U.S. and Canada when MGM ended a domestic deal with Sony Pictures.

MGM retains the ability to distribute its movies on television.

With its theatrical and home entertainment partnerships completed, many in Hollywood will be watching to see what movies MGM develops and produces itself or co-finances with other studios.

It is co-financing "Zookeeper" with Sony and two "Hobbit" movies with Warner Bros. Both films will be distributed in theaters and on home video worldwide by MGM's respective partners.

-- Ben Fritz


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