Sony Corp. struck a tentative deal Monday to buy Metro- Goldwyn-Mayer Inc. for about $4.8 billion, promising to spell the end of MGM's 80-year run as a stand-alone movie studio.
The agreement with Sony and three investment partners, which together have offered to pay about $2.9 billion in cash and to assume $1.9 billion in debt, came after five months of negotiations and a bidding war orchestrated by MGM.
Sony and media conglomerate Time Warner Inc. jockeyed for position to acquire MGM and its valuable library of more than 4,000 movies, which includes the James Bond franchise, the "Rocky" film series and such recent hits as "Legally Blonde" and "Barbershop."
Sony's victory came at the eleventh hour over the weekend, after the Japanese company enlisted cable giant Comcast Corp. in a venture to launch new channels featuring Sony and MGM movies. Sony and Comcast also will team to showcase these films on Comcast's video-on-demand system.
The deal with Comcast, which also is expected to invest in MGM down the line, was the impetus for Sony's sweetening its bid and trumping Time Warner's $4.6-billion offer. Time Warner said Monday that it was dropping out of the race, hours before the Sony-MGM agreement was announced.
If the sale goes through, MGM would become the first of what some call Hollywood's "seven sisters" -- including 20th Century Fox, Paramount, Disney, Universal, Warner Bros. and Columbia Pictures -- to disappear as a major studio.
"It was once the premier studio of all time," said former MGM chief Alan Ladd Jr. "It's been dwindling away at a slow pace for years. There's nothing that can save it, so it's best to dispose of it."
In the last two decades, MGM has operated as a significantly scaled-down version of what it was during Hollywood's golden era in the 1930s and '40s. In those years, MGM was ruled by the likes of legendary moguls Louis B. Mayer and Irving Thalberg, and it boasted of having "more stars than there are in the heavens." Among the classic films it made were "The Wizard of Oz," "Singin' in the Rain" and "Ben-Hur."
But operating exclusively as a movie studio, MGM finds itself today dwarfed by media behemoths. These include 20th Century Fox parent News Corp. and Paramount Pictures owner Viacom Inc., whose empires also extend into television broadcasting, publishing and pay TV.
