MGM on the Market

[Galahad]

Reports are today that MGM's market cap has dropped significantly and that Disney is expressing interest in buying them. Good idea or bad?

 

[Mop]

I haven't heard anything about this yet, but you never know.

It all depends on the price. Disney doesn't need a film studio. They already have one. But for the right price, they might buy it if only to get their hands on properties (James Bond!) and a massive film archive.

Mop

 

[Galahad]

Here's the story:

Kerkorian May Be Willing To Sell MGM For $15/Share -NY Post
Updated: Thursday, October 3, 2002 07:37 AM ET

NEW YORK -(Dow Jones)- Kirk Kerkorian, the billionaire in control of Metro- Goldwyn-Mayer Inc. (MGM, news) , may be willing to sell the company for $15 a share, or $3.76 billion, the New York Post reported Thursday, citing sources familiar with the matter.

The report says would-be purchasers balked at the $30-a-share price that was asked when MGM retained Goldman Sachs to arrange a sale last December.

Kerkorian has cut the price after seeing the company's market value cut nearly in half, and Walt Disney Co. (DIS, news) is once again showing interest, the Post reported. Previous talks between the two companies - which already have some business ties - broke down over price.

The report cited sources as saying the most recent talks were preliminary, and no deal is imminent.

Other suitors include Viacom Inc. (VIA, news), AOL Time Warner Inc. (AOL, news) and News Corp. (NWS, news), the report said.

MGM shares closed Wednesday at $11.80.

 

[mrtoadslastride]

I may be completely wrong, but MGM seems like a pretty good deal at $15 a share. MGM would cost Disney less than Fox Family!!!

 

[Bob O]

I would perfer that disney not acquire anything until they get rid of the sports teams(hopefully abc) and get the rest of the company running properly and profitably before buying something else that im afraid they will also mismanage.

 

[doubletrouble_vb]

Wasn't there also an article today about AOL/Timewarner acquiring Disney? MGM might make a nice poison pill or maybe it would sweeten the pot to create Disney/MGM/AOL/Timewarner... Or maybe just Disney-Time.

 

[Planogirl]

MGM would be a nice acquisition. I just hope that Disney doesn't get in over their heads if they go ahead with it. But this would be a wise purchase IMO....finally!

 

[wdwguide]

It would be a great acquisition, but with Disney's bad credit rating and their already excessive debt, the time just isn't right - unless they buy MGM to break it up and sell it off piece by piece, just keeping the film library and name for themselves (which would be quite ironic). I agree with Bob that Disney should get rid of some excess fat first.

 

[Harryo]

I'd like to see them aquire the Jim Henson company also.

 

[OnWithTheShow]

Bob, I am curious as to why you think Disney should sell ABC. Television is a notoriously flip-floping business with regards to ratings. Just because one channel has done poorly for two years does not neccessarily mean it has been mismanaged. With the advertising market the way it is right now all the networks are suffering. I think ABC needs to be given a chance to recover. I also believe that it is crucial that Disney owns one of the broadcast networks.

 

[HB2K]

Show, please....of all the things to defend, ABC is not the one.

ABC not mismanaged? How about the Millionaire franchise? Where is it now? Why isn't it still on the air making people millionaires, and making it's contestants rich too?

Because Disney had no freakin idea what to do with ABC, then stumbled into this suprise success. So they just beat it to death.

Disney is not a distribution company....they are a content company. While it is nice to own your own distribution channel, if you can't manage it correctly to the point that it affects your core business, in this case content, you don't keep it. Sell it to someone else who knows how to run a distribution channel.

ABC is single handedly KILLING the Walt Disney company. Pure and simple. To say that Disney is not mis-managing the channel, to say that it's the economy and ABC is just in a slump is hiding the main problem.

While other channels may struggle selling advertising, which I don't think is the case, at least they have the numbers to try to sell with. How does ABC goto any company to solicit advertising when they have such poorly performing television programs?

 

[*Robin*]

Actually, not that I'm a huge ABC fan, but they just turned millionaire into a daytime gameshow...

 

[EUROPA]

Originally posted by *Robin*
Actually, not that I'm a huge ABC fan, but they just turned millionaire into a daytime gameshow...

which is way downhill from leading the ratings in primetime.

 

[*Robin*]

No argument, he just asked where Millionaire had gone...

 

[Horace Horsecollar]

Originally posted by Mop
Disney doesn't need a film studio. They already have one. But for the right price, they might buy it if only to get their hands on properties (James Bond!) and a massive film archive.

Just a few things to consider...

Ted Turner bought the bulk of the MGM movie library in 1986. Yes, MGM still has a library of MGM and UA movies and TV shows, but that "massive film archive" isn't nearly as massive as one would think.

MGM doesn't have a "film studio" any longer either. MGM's former Culver City production facilities are now known as Sony Pictures Studios, home of Columbia Pictures and TriStar -- at least the parts that weren't sold off to real estate developers.

By the way, MGM Mirage, which owns most of the top casino resorts in Las Vegas, is a different company entirely.

So what does MGM do? MGM, which had pretty much gotten out of movie business 25 (or so) years ago, got back into the business by buying United Artists (UA) around 20 years ago. That's where "MGM/UA" comes from. Think of MGM as a virtual studio (kind of like Miramax) and movie distributor.

The long term success of any movie company depends on its ability make movies that people want to see (and that bring in revenue that exceeds costs) year after year. It's a combination of smart creative decisions and smart business decisions. If Disney bought MGM, they would the same issues they now face, only on a bigger scale.

I don't see how Disney would benefit from buying MGM.

 

[manning]

Disney doesn't need another poison pill !!!

 

[Bob O]

The whole idea of buying ABC for all the so-called synergy hasnt worked at all!!! Their is no reason at all that disney needs to own a network and nothing has been shown it is to the companies betterment that they bought ABC. They should do what they were good at and that is running their theme parks and making decent movies and ABC detracts from what their core business was.
And i would be all in favor of getting rid of abc just for the sole reason of having their pr BS show in MGM!!!
They have totally mismanaged ABC from day one and have shown no ability to run a network and it has been a big financial drain on the company!! One hit show for a short amount of time doesnt make a network. I guess disney should realize that bigger isnt always better!!
Why is it crucial they own a network of their own??? They suceeded wildly without one and have suffered greatly while owning one and all the so-called syngery hasnt worked at all!!

 

[RoutemanDan]

Originally posted by *Robin*
Actually, not that I'm a huge ABC fan, but they just turned millionaire into a daytime gameshow...

Millionaire airs on NBC at 4pm in the Tri state area.Why isn't it on ABC?

 

[*Robin*]

Originally posted by RoutemanDan
Millionaire airs on NBC at 4pm in the Tri state area.Why isn't it on ABC?

http://www.millionairetv.com/

I believe it's just Buena Vista Television, and is picked up by who wants it. Though I have no idea how this works.

 

[scooby-the-doo]

I can't believe Disney paid over $3.5 billion for Fox Family. They already have the Disney channel -- surely they both go after the same audience.

And I do believe that MGM would be a good aquisition. Ignoring the nostalga factor that comes from the historic property, gaining control of the James Bond franchise is an immediate and obvious plus. Synergy could actually work for once?! Bond in the theatres and Bond the ride(s) in the park.