After suffering more trauma than the average teen-ager, Metro-Goldwyn-Mayer finally gets to prove that the lion's curse has been lifted next month, when it starts to release the first batch of movies that have been largely supervised by the studio's new management.
Leading the pack is "Clean Slate," a Dana Carvey comedy produced by Richard and Lili Zanuck. Then comes the real test as MGM rolls out two of the most high-profile movies of the summer--"Getting Even with Dad," a comedy starring mega-child celebrity Macaulay Culkin and Ted Danson, and "Blown Away," a thriller with Oscar-winner Tommy Lee Jones and Jeff Bridges.
Hollywood is closely watching all three projects for proof that there's more than high hopes behind the revival, which started in July when Frank Mancuso was named chairman and the company's disastrous finances were restructured. MGM already has flexed its muscle in the marketplace by becoming a serious buyer of material and by assembling a strong team of senior executives. But in some quarters there are lingering doubts about its staying power.
One concern is that Credit Lyonnais, which owns MGM, will bail out before the studio has fully recovered, and before the 1997 deadline for unloading it under U.S. banking laws. Credit Lyonnais helped add to those worries over the weekend when its new president, Jean Peyrelevade, told the Financial Times of London that the studio could be had now for $2.5 billion. Sources later said Peyrelevade was just trying to discourage bottom fishers by tossing out an obviously exorbitant figure.
Hollywood also worries that MGM is suffering a cash crunch, with many believing that the studio already has eaten through the $400 million that was supplied by Credit Lyonnais last July. The studio contributed to that perception, inadvertently it seems, when word got out earlier this year that it was trying to round up $300 million in additional financing.
In an interview on Monday, however, Mancuso said that everything is on track as far as he's concerned. Mancuso said the bank remains fully committed to reviving MGM, despite the political problems it is suffering over a series of bad loans.
"The policy is that maximum value can be obtained for the company when it is fully competitive in the marketplace," said Mancuso, who last week attended a quarterly Credit Lyonnais board of directors meeting in New York. "We have an exceptionally straightforward relationship with the bank. I've seen absolutely no change in that since I arrived."
Credit Lyonnais, for its part, said: "Nothing has changed in the bank's policy of rebuilding MGM to its full production and distribution capacity. The comment from (Peyrelevade) to the Financial Times only emphasizes that the bank will never sell MGM for peanuts."
Mancuso also shot down widely circulated rumors that the studio has run out of cash, and that Credit Lyonnais is financing it on a month-to-month basis. He said that there's still money left over from the original $400-million commitment and that MGM merely is seeking more financing as a way to bolster production and become less reliant on the bank's support.
The Hollywood Reporter first revealed that MGM was trying to raise about $300 million in working capital from a syndicate led by Chemical Bank two months ago. While there's been little progress since then, Mancuso said he hopes to have the financing secured by summer.
"The $300 million would be added financing," Mancuso said. "Hopefully, some of our movies will do some business, so we'll have that too. . . . We believe we will be able to deliver exactly what we set out to do with financing put in place some time ago."
Credit Lyonnais inherited the studio in 1991, when Italian financier Giancarlo Parretti defaulted on about $1.3 billion in loans. The studio operated under severe financial constraints until last summer, when Creative Artists Agency Chairman Michael S. Ovitz, a consultant to the bank, helped persuade Credit Lyonnais to revive the operation as a prelude to selling it.
Most industry observers agree that Mancuso has gotten the studio off to a strong start by naming former talent agent Michael Marcus to head the MGM production wing and veteran Hollywood executive John Calley to run the newly revived United Artists wing. MGM also has bolstered its industry standing by signing distribution deals with Carolco Pictures and Polygram Filmed Entertainment, and by actively competing for strong material.
MGM plans to release eight movies this year and as many as 20 next year. Despite the scattered rumors surrounding the studio, most of the industry is rooting for it to succeed, since it represents a significant buyer of material and a cherished part of Hollywood history.
"They have not been wildly profligate spenders, but they certainly have been part of the mix," said entertainment attorney David Colden.
"They also have a fairly active production slate. Given that the newly constituted team has only been there a short period of time, it's an impressive operation."