World News – US – Breaking MGM’s Costly « No Time to Die » Dilemma

In early October, with COVID-19 cases on the rise in Europe, Metro-Goldwyn-Mayer decided to end its plans to release « No Time to Die » on Thanksgiving

The studio made a similar decision last March as the coronavirus first gripped the world, pushing back the release of James Bond’s 25th adventure by eight months only to find it hadn’t operated long enough before a worsening public health disaster The move was financially painful, given that the studio had already spent $ 66 million in marketing costs Bringing « No Time to Die » to the screen was already an expensive proposition – the film, which marks Daniel Craig’s final round. in 007, had a net budget of $ 301 million Additionally, Craig and producers Barbara Broccoli and Michael G Wilson, who controls the rights to the series, have generous backend and profit-sharing agreements, limiting the amount of money MGM can make on the film.

MGM was at an impasse, and it was a dilemma that may soon be shared by other small and medium-sized studios such as Lionsgate and STXEros, as they try to wait for the pandemic to end. Postponing « No Time to Die » until April 2021, as MGM ultimately chose to do, meant the studio would have had to bear an additional $ 1 million in interest per month. And few in the industry think ‘No Time to Die’ is done moving. Public health officials say a vaccine is unlikely to be widely available in the spring and as audiences for the film get older, fans of Bond are more vulnerable to coronavirus

Before moving to « No Time to Die, » MGM president Kevin Ulrich took part in a fishing expedition, letting large-scale streaming services know he could license them exclusively for the film for a year or even sell it outright Netflix and Apple have engaged in exploratory talks, but never made a formal offer or even drafted the type of financial analysis that typically accompanies such a sale This was in part because MGM and the parties were far apart MGM was hoping for a bid of between $ 600 million and $ 850 million, which could have been an impressive enough number to convince Broccoli and Wilson to forgo a theatrical release. Instead, the streamers indicated that they would not exceed the $ 400 million, which was more than what MGM had already spent on making the film when Craig and the producers’ backends were factored in (Universal, who oversees overseas distribution, was also to be paid)

A spokesperson for MGM said the studio would not comment on the rumors, but all planned films have been moved in an effort to preserve the theatrical experience

Many competitors have pointed out that MGM’s predicament in Bond would have been less complex had the company chosen a major studio partner in 2017 as a distributor MGM entered into a joint venture with Annapurna Pictures, which was eventually dubbed United Artists Releasing, almost four years ago after turning down offers from majors including Warner Bros. and Paramount Pictures While other insiders insist UAR has the cash on hand to release both « No Time to Die » and a sequel to MGM’s « Tomb Raider » by Alicia Vikander, many have agreed. that a media giant would be better placed to weather this particular storm A spokesperson for MGM challenged a bond rights auction and reaffirmed the studio’s commitment to UAR, stating, “We have enormous confidence in the UAR team, which is led by veterans of UAR. this industry who have worked on several Bond films during their career »

The failed deal for Bond came at a time when streaming services were aggressively capturing major movies from mainstream studios Over the past few months, Amazon has spent hundreds of millions to buy « Without Paramount’s « Remorse » and « Coming 2 America », Apple swept and captured Sony’s « Greyhound », and Netflix picked up Paramount’s « Trial of the Chicago 7 » This wasn’t the first time MGM had received incoming offers from streaming services on her films she had been forced to delay The studio had numerous requests to unload ‘Candyman’ on Netflix, Amazon or Apple, but producer Jordan Peele insisted on a theatrical release for the remake of horror

This week, MGM chose to move another high-profile film, « Respect, » to 2021 The drama, which stars Jennifer Hudson as Aretha Franklin, was seen as a contender for the season. rewards However, MGM has found that with the increase in COVID-19 cases worldwide, a release is unlikely, if not dangerous His decision to push the film has led to speculation that the studio may be feeling financial pressures

This does not appear to be true… at the moment MGM had $ 790 million in cash and cash equivalents on its balance sheet at the date of its most recent financial disclosure It is not known if the pandemic forced it to eat away at it its cash reserves However, a spokesperson for MGM said the studio had a « liquidity profile » north of $ 1 billion, with $ 700 million in operating cash.

But MGM has other issues to tackle in the coming months EPIX, the company’s cable channel, has proven to be an expensive drain and may be exceptionally vulnerable to cord cuts The premium channel has no still enjoying success The company has also spent a lot on its slate of films Last winter MGM brought in Oscar-nominated producer Michael De Luca to oversee their film group with a mandate to find sensational projects He delivered, lining up films like Thomas Kail, George Miller, Joe Wright, Kenya Barris, Ridley Scott and Paul Thomas Anderson The activity made a statement to the industry that MGM was getting ambitious

However, De Luca also wrote big checks to land the films Anderson’s untitled coming-of-age drama cost $ 40 million, about $ 10 million more than what the other bidders were willing to spend on a project with limited commercial potential Likewise, De Luca is said to have far outstripped other bidders to catch Scott’s film, « Gucci, » and wrote a check for $ 3 million for the rights to « Project Hail Mary, » a sci-fi film shot. to star Ryan Gosling A lot of these movies may eventually pay off, but they’ve been developed for an extended theatrical release Given the pandemic, it is not known when this type of distribution strategy will be viable again

An MGM spokesperson rebuffed any suggestion De Luca was debauched, saying 2021 will be one of the company’s biggest years for new films

“The studio has made a commitment and has built a solid theatrical slate MGM has several high profile projects that have been brought to the studio since De Luca took over as head of the cinema division,” said the head of the society

Again, however, MGM’s relatively small size means that the slate De Luca has built must deliver commercially Unlike large studios, such as Warner Bros and Disney, MGM does not have an in-house streaming service. like HBOMax or Disney Plus, where it can place films that face indefinite theatrical release, at least allowing them to monetize the content instead of racking up interest payments. He also doesn’t have the luxury of be part of a sprawling conglomerate that might allow it to better withstand a protected theater closure

Before COVID-19 rocked the film industry, the smart money was that MGM was looking to sell to another studio or streaming service Ulrich, insiders say, was hoping to close a $ 8 billion deal dollars for the company That’s a princely sum, and while it is true that MGM controls a library of 4,000 titles that includes everything from « The Silence of the Lambs » to « Rocky », it has also largely operated a much of this intellectual property MGM’s most valuable asset, and the reason an Apple or Netflix would even consider spending billions to buy it is Bond

During the coronavirus, however, ‘No Time to Die’ doesn’t turn out to be the financial lifeline the studio needs Instead, every delay only costs more money and leads to more gossip that MGM begins to feel the heat

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