8799 – The MGM mess continues!!

MGM revamps DVD, TV distribution
LOS ANGELES (Reuters) – Metro-Goldwyn-Mayer Inc. on Tuesday unveiled new plans to revitalize the movie studio by ending video and DVD distribution pacts with Sony Pictures Entertainment and reestablishing a TV sales division.
MGM said it signed a new worldwide video and DVD distribution pact with 20th Century Fox to consolidate sales efforts under one company. Previously MGM split video and DVD distribution between Fox overseas and Sony in domestic arenas.
For Sony, MGM’s decision cuts both ways. Sony’s home video business will lose lucrative distribution fees it would have earned for releasing titles from MGM’s library of 4,000 movies and 10,000 TV episodes. However, Sony will benefit if MGM makes more money because Sony owns 20 percent of the company.
Sony also secured a deal to extend a film co-production and distribution pact with MGM for one more James Bond film beyond November’s release of “Casino Royale.” Sony and MGM further agreed to co-produce and distribute a new “Pink Panther” comedy and other yet-to-be determined films.
Finally, MGM will continue supporting Sony’s blu-ray DVD technology by releasing DVDs in the new video format.
“We have identified another important opportunity to build out our business by returning our worldwide television sales operations in-house and by consolidating our home entertainment releases with a single distributor,” MGM chairman and CEO Harry Sloan said.
Sony has a seat on MGM’s board, meaning it had a say in the decision.
The moves follow MGM’s March announcement to again begin distributing movies to theaters on its own, and it comes about seven months after Sloan took the reins of the company.
Venerable MGM, known for producing movies like “The Wizard of Oz” and “Gone with the Wind” during Hollywood’s Golden Age, was acquired last year by the Sony-led consortium for roughly $3 billion in cash, plus assumed debt.
Private equity investors Texas Pacific Group and Providence Equity Partners together own roughly 50 percent of MGM, Sony and cable TV company Comcast Corp. each own about 20 percent. Other major investors include DLJ Merchant Banking, Quadrangle Group and Sloan.
Sony Pictures is part of Japanese electronics company Sony Corp, and Fox is part of News Corp.