September 10, 2004

Just when I think I've gotten to Toronto, they pull me back in!

My Hot Button intention through the Toronto Film Festival is to do one long review here each day, to do shorter reviews on MCN and to fill in the gaps with the new blog. (Why do I feel like I need a tissue every time I use that word?) But I "only" saw four films on Thursday and one of them really needs to wait until tomorrow afternoon for review… it's not showing publicly for the press until tomorrow morning and I am not feeling kindly about the movie, so 12 hours of restraint seems the better part of valor.

Look for short reviews of Le Fantome D'Henri Langois and Schizo on MCN this morning, in addition to yesterday's comments on Paul Cox's Human Touch.

But for now, I'm back to Hollywood…

What does Warner Bros. ultimate win in the bidding for MGM mean?

Well, it is the end of a era… even more so than the last few times the plug was pulled on this studio. Details of the branding are still being worked out, but I suspect that MGM and UA will become Home Entertainment brands, though there is a real possibility that while MGM will remain a "classics" brand, UA will evaporate completely into WB and the new Warner Independent Pictures. It is also significant that under Kerkorian and McGurk (and before), MGM has picked up a bunch of small home entertainment libraries themselves, mostly of borderline quality. And there are some TV brands of note, as well as a couple ongoing series.

Another major asset of MGM that is rarely talked about except in regards to The Hobbit, are the remake rights to thousands of highly regarded titles.

As far as I can tell, there are only three films actually in production or ready for release from The Lion (Beauty Shop, The Amityville Horror and The Pink Panther). A new Bond is due in 14 months or so, but hasn't chosen a lead, much less started production. United Artists has The Yes Men (WIP, here they come!) and The Woods in the docket.

But mostly, it means that one of the seven MPAA signatories, the official designation of a "major," is going to disappear completely, leaving Columbia, Disney, Fox, Paramount, Universal and Warner Bros. MGM was the only major studio that was not part of a massive conglomerate. And DreamWorks, which would have been an eventual logical addition to the MPAA family, is being divided up as we speak… they hope.

Of the six majors left, only Columbia and Warner Bros. are not part of a company that also owns a major television broadcast network. This is no small thing. And it is no coincidence that both of these companies were the ones vying for MGM. Just a few days ago, a Sony exec said that acquiring MGM was critical to the ongoing Sony Pictures Entertainment business. And he wasn't exaggerating.

Warner Bros. has remained strong as a producer of television product in spite of not owning a major net. Part of that is just good work, part is luck (Disney letting Jerry Bruckheimer's TV interests off the lot), and part is having a minor network to keep the pump partially primed. Plus, the Time-Warner owned cable networks are some of the strongest in the world. Now they are a little stronger, with what must now be the biggest library of quality titles in the world… by far.

Across town, Sony's TV business was all but shut down a few years back. They have become one of the strongest home entertainment divisions from early on. Diversity does a studio good. And without being heavily in the television game, Sony's entertainment business, though solid on a micro level, remains vulnerable.

The good news for Sony Pictures execs is that there is no one left who is really going to be interested in acquiring that studio for a while. A deal like Comcast attempted with Disney is not viable because Sony Pictures doesn't have the cable assets that made Disney a good target.

But the bad news is that there is no clear move to make for the company. The notion of owning "software" to sell hardware is over and the loss of the MGM library means that it isn't coming back. There is no existing broadcast network, except maybe UPN, to buy and starting one from scratch is going to be amazingly expensive. In fact, as a movies-only company, Sony may find itself forced to find a way to renew the initially overly-lucrative Revolution Studio deal and seriously consider making a preemptive offer to acquire DreamWorks Animation. Pixar is going to get a distribution-only deal from someone and it would be silly of them - without insulting Sony - to even consider a studio without the TV and family-oriented assets of a Disney or Fox. And Disney better finish the Weinstein deal before the Brothers figure out that they can leverage Sony Picture's current situation to make greater demands from The Mouse House.

Perhaps the greatest irony would be if Chris "Mo Money" McGurk found someone to buy Columbia, et al. I'm not sure just how big McGu's payday is on this, but he is now young enough and rich enough to become the next Barry Diller. Some think he's talented enough and some don't, but expect to see his name as the entertainment CEO most wanted for the next few years. His most logical stop would be Disney, though that bridge is, from most accounts, well burnt from both sides.

This would be a great time for Warner Bros. to dump some of their distributing partners and to start a program of 5 or 6 remakes of classic MGM titles (or even just steal great ideas) each year. They don't need to launch another division. They just need to find the right exec to lead that very specific effort. Elie Samaha has taken himself out of the game on his own. Morgan's Creek is up itself. So there is some room to maneuver (especially if Alan Horn can disconnect from Castle Rock obligations that have sunk him repeatedly).

But say goodbye to the lion… and the scarecrow and the tin man.

E ME: What's your favorite MGM/WB title and why?