What’s going to happen to MGM?

On Tuesday, the Hollywood studio announced it was replacing its chief executive Harry Sloan with a team that includes a turnaround expert. It’s a well-known fact that MGM, which is owned by private equity firms and Comcast, has struggled with a massive debt load. It has payments due on $3.7 billion of debt and the future isn’t looking too good, given the down market and shrinking DVD demand.

Media and entertainment industry analysts believe MGM won’t last much longer as an independent studio, according to a story in the Los Angeles Times:

Most industry watchers believe that MGM will not survive much longer as an independent studio and is likely to be sold to a bigger media company such as Time Warner Inc. or merged with another movie and TV studio like Lions Gate Entertainment Corp. Qualia Capital, a private investment firm headed by Amir Malin and Ken Schapiro, is actively looking at MGM, said a person with knowledge of the situation.

Who else could be a buyer? There were rumors earlier that investor Carl Icahn, who is a major shareholder in Lions Gate, was buying up MGM’s debt in the open market with the intention of forcing a merger between the two studios.

Then, there’s Comcast, which already owns a stake in MGM and could potentially be interested in owning MGM’s rich content librabry, which includes the James Bond films. Reuters’ Yinka Adegoke recently wrote that investors worry that Comcast will make a splashy acquisition soon. Could this be it?

Keep an eye on:

• Travel Channel bids were due on Tuesday. Who’s going to buy it? (CNBC)
• Virtual cooking is a hit on Facebook. (Los Angeles Times)
• The New York Daily News bumped the Wall Street Journal off most-visited sites list. (Editor & Publisher)

Photo: Actor Daniel Craig. the current James Bond/Reuters

Debt-ridden Hollywood studio MGM, whose library is home to such gems as the Rocky and James Bond flicks, has replaced CEO Harry Sloan, appointing a three person team to run the show: famed turnaround ace Stephen Cooper, motion pictures group boss Mary Parent, and CFO Bedi Singh.

Sloan is out as CEO but the veteran Hollywood businessman, who took the helm a few months after MGM’s 2005 buyout by a group of private equity and media investors,  will stay on MGM as non-executive chairman of the studio. The studio has been grappling with a massive $3.5 billion debt load stemming from its 2005 buyout by private equity and media firms.

Along with the debt load, MGM , which has not had a major film release since Tom Cruise’s ”Valkyrie”  in December, has been struggling like other Hollywood studios with  lining up fresh film financing due to the economic crunch and dropping DVD sales.

Cooper,  well-known for  turning around big troubled companies Krispy Kreme and Enron, has been appointed to restructure MGM’s  balance sheet to enable Parent to make movies.

MGM is due next to release a remake of the 1980’s hit “Fame” and to start production on “Red Dawn” another remake, in September.

Sloan left a private law practice in 1983 and has been a media executive and investor since. He invested and ran three media companies, including SBS Broadcasting, Lions Gate Entertainment and New World Entertainment.

Suddenly, after limited news over the past year, Epix has been very much the talk of the town in recent days. A number of publications, including Reuters, have picked up on some announcements out of the pay TV site jointly owned by Paramount, Lions Gate, and MGM.

The key bit of news, of course, was the announcement that it had reached its first distribution deal, with Verizon. Chief Executive Mark Greenberg suggested to us that other deals should be coming soon — that he is talking to everybody and “some are further along than others.”

This is key, in the eyes of Wall Street. Distribution deals are always a bit tricky, and even tougher in the current economic environment. But analysts want to see Epix sign a deal with one of the big players — one with a ton of subscribers. We’re talking about Cablevision, Comcast, Time Warner Cable, DirecTV. So far the reaction has been a little lukewarm from some of the big boys but that could just be a negotiating tactic.

That aside, there have been some other relatively significant bit of news. In case you missed…

• Epix will be launching in October, though hasn’t announced an official date. Sounds like they could be planning some sort of “event” or “special” to kickstart the channel

• The epixHD.com web site, which we’ve seen, is going to launch earlier.  It’s currently in beta, and looks good. Has some of the feel of Hulu.com

• Epix, which will be home to some 15,000 films, including titles like “Iron Man” and “Star Trek” and the James Bond movies, just signed a content deal with independently owned Samuel Goldwyn Films.

• Other content deals will likely follow, but Greenberg seemed doubtful that any full, equity partners would be brought on board.

• While most pay-TV channels air films about 12 months after the hit the theaters, Epix is planning to roll its out in 9-1/2 months (helps to be owned by the studios).

Still, none of this matters all the much without distribution. We’ll keep you posted.

Keep an eye on:

• In other news on Monday, Dish Network’s stock is jumping. The reason? For the first time in over a year the company added subscribers — impressive in the current climate. (Reuters)

• Bon Voyage. As expected, Microsoft has sold the Razorfish ad agency to France’s Publicis. (Reuters)

(Photo: Reuters)

Last week, it had seemed like Lions Gate and Carl Icahn were heading to an amicable settlement (in other words, Icahn was close to getting his way because the independent film and television studio was leaning toward giving him a board seat or two).

But things obviously soured, because talks broke down, raising the specter of a proxy fight for control of Lions Gate.

From Icahn: “Discussions have been terminated because agreement could not be reached concerning certain aspects of the standstill agreement that Lions Gate demanded as a condition of installing those board members.:

From Lions Gate CEO Jon Feltheimer and Vice Chairman Michael Burns: “Over the past three weeks, our board of directors has been in discussions with Mr Icahn to consider how we could accommodate some of his requests, including the possible appointment of his designees to the board of directors. However, the board ultimately concluded that it could not meet his requests…”

It seems Icahn wanted too much.

Last year, when the billionaire investor wedged himself in between Yahoo and Microsoft and threatened a proxy fight against Yahoo, the Internet company caved and gave him board seats. We haven’t heard a peep out of Icahn since on that front.

But clearly, things are going to be different for Lions Gate. There have been press reports lately that the corporate raider had begun buying up MGM debt in hopes of forcing a merger between rivals MGM and Lions Gate. That kind of back-door entry didn’t work for EchoStar’s Charlie Ergen in his pursuit of Sirius XM, because Liberty Media’s John Malone rode in on his steed at the nick of time.

If a similar scenario unfolded at Lions Gate, who’d be the white knight?

Keep an eye on:

• PR firms grow amid marketing gloom. (Financial Times)
• No one knows which will be the first big city without a large newspaper, but there are candidates across the U.S. (The New York Times)
• AOL closes China R&D unit, sheds 56 jobs. (Reuters)

(Photo: Reuters)

The New York Times confirmed this morning that it’s looking to get rid of its stake in the Boston Red Sox baseball team, something previously reported by a number of news outlets.

The Times could raise at least $200 million selling its stake, analysts have said, though it should be noted that selling anything these days — even part of a first class baseball organization — is no easy task.

Check back to MediaFile for more on the sale shortly.

Meanwhile, here’s a recap of the New York Times decline in quarterly results:

The Times’ fourth-quarter net income fell 48 percent to $27.6 million, or 19 cents a share, compared with $53 million, or 37 cents a share, in the quarter a year earlier.

Excluding a writedown related to the International Herald Tribune, its European newspaper, the Times reported earnings of 26 cents a share. The average analyst estimate was 27 cents a share, according to Reuters Estimates.

Revenue fell 10.8 percent to $772.1 million, beating the average Wall Street forecast of $761.1 million.

In the fourth quarter, advertising revenue fell 17.6 percent. Ad revenue at the news media group — which includes its namesake newspaper, The Boston Globe and other local papers throughout the United States — fell 18.4 percent.

Online revenue, including About and its newspaper websites, fell 2.9 percent to $92.5 million.

Keep an eye on:

• Only days before the National Football League’s championship game, Pepsi executives are still debating which advertisements they will run during NBC’s broadcast of the Super Bowl on Sunday, which will likely be viewed by nearly 100 million Americans (Reuters) 
• Union moderates fighting for control of the deeply splintered Screen Actors Guild on Monday ousted the hard-line chief negotiator they blame for months of stalled contract talks with Hollywood studios (Reuters)
• A cable channel from Paramount Pictures, MGM, and Lionsgate that is intended as a competitor to HBO and Showtime will be name Epix and wil launch online in May (New York Times)

(Photo: Reuters)

NBC is once again stuck in last place in prime-time ratings; its much-hyped Olympic coverage is over, so are the elections; advertising across media is under pressure; and dishing out $67 to hang at the Universal Studios theme park probably isn’t as appealing when you could soon lose your job, house, car, etc.

Still, NBC Universal would seem more secure within parent General Electric than it has been for some time. Indeed, most of the talk about a possible sale has faded away. Here’s what analysts told us for a recent article.

“I’ve struggled with it forever, in terms of why GE has it, especially now in a situation like this where ad revenues are down,” says Mike Gandrud, senior analyst at Optique Capital Management. 
“I’d love to see them do something with it … Do I expect it to happen? No.”

“Eventually, I believe, they want out and have decided it doesn’t represent the kind of upside growth of some alternatives,” says Steve Ridge, president of media strategy at research firm Frank N. Magid Associates. ”For now, I think they missed the window.”

Why not sell? Get out of media at a time when media is under heavy pressure? A number of reasons, ranging from NBCU’s recent strong performance to its ability to generate cash. Oh, and of course, it’s next to impossible to sell anything these days at a reasonable price.

Daniel Holland, an analyst at Morningstar,  says, “The last time you want to sell something is when the price you’re going to get is below what it would generally command.”

He points to the trouble GE is having getting rid of the appliances division.  ”That business may not be the greatest business in GE’s portfolio but it’s a really solid business. If you’re trying to get into North America and you’re an appliance manufacturer, that’s an incredible brand to have. And so when you see how difficult it’s been for GE to get rid of something as attractive as that” you can imagine how hard it might be to get a decent price for NBC.

Keep an eye on:

• Radio companies, facing heavy debt and a depressed advertising market, are facing huge challenges (WSJ.com)
• Shari Redstone has resigned as chairwoman of Midway Games to concentrate on the troubled National Amusements (WSJ.com)
• YouTube is set to announce a deal to show some full-length television shows and films from MGM (NYTimes.com)

(Photo: Reuters)