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Scott brothers may turn their hands to saving MGM

08-Apr-2010 • Bond News

Tony and Sir Ridley Scott have emerged as surprise contenders to steer Metro-Goldwyn-Mayer back to solvency after submitting a restructuring plan to the Hollywood studio’s lenders, says FT.

The brothers, who between them are responsible for Alien, Top Gun and Gladiator, have expressed interest in running MGM, according to people familiar with the situation.

MGM, struggling under a $3.7bn debt burden, is in the hands of its creditors after it became clear it could not afford to meet its repayments. Companies in the Sony-led consortium that paid $5bn for the studio five years ago, including TPG and Providence Equity , have seen their equity wiped out.

The studio, which owns the James Bond series and produced The Wizard of Oz, is on the auction block.

Time Warner led the bidding with a $1.5bn offer. But creditors were underwhelmed and are leaning instead towards a debt-for-equity swap and an injection of new capital to create a standalone company with a reduced debt burden.

Steven Cooper, the restructuring specialist who oversaw the bankruptcy of Enron, is managing the sale and is acting as interim chief executive.

He is likely to oversee a transition until a new management team – possibly including the Scott brothers – and a new chief executive are in place.

“MGM needs a chief executive that Wall Street knows and respects,” a person familiar with the matter said.

The creditors have not decided whom to approach for the chief executive role.

Jonathan Dolgen, former chairman of Paramount Pictures, has been mentioned, as has Roger Birnbaum, chief executive of Spyglass Entertainment.

The Scott brothers have their own production company, Scott Free, but it is unclear whether their proposal would involve combining it with MGM, or if they are seeking a stake in the recapitalised studio. They could not be reached for comment

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