Kirk Kerkorian buys MGM again
The mogul's third purchase of MGM studios raises questions about his intentions
So, it turns out the old lion may not become a throw rug after all. On July 16, five months after MGM/UA went on the auction block, the studio was sold to one of the few bidders who vowed to keep the beast alive and kicking, at least for now. The new owner: Kirk Kerkorian, the notorious Las Vegas billionaire who loves the company so much he bought it — and sold it — twice before.
Employees at the studio’s Santa Monica offices celebrated the news by uncorking bottles of champagne and partying in their executive suites. Certainly, they had reason to be giddy: One of Hollywood’s most venerated institutions — once home to Katharine Hepburn, Clark Gable, and Judy Garland, and later to James Bond and Rocky Balboa — had been snatched from the jaws of extinction. So had their jobs. Still, when the bubbly runs out and MGM/UA begins its new life (the sale should be final in September) and meets its new boss (same as the old boss), some touchy questions will remain. Topping the list: Can the longsuffering studio claw its way back to the top or is this latest turn of events merely MGM/UA’s dying meow?
The answer to that question — and the others posed below — will depend almost entirely on the whims of a 79-year-old megamogul who, according to his critics, makes Gordon Gekko look like Mother Teresa.
What Does Kirk Kerkorian Really Want? The last time Kerkorian owned the studio — from 1969 to 1990, with a brief break in 1986, when he sold it and bought it back within a few months — he nearly ran the company into the ground. Piece by piece, he dismantled its assets, bulldozed historic backlots, auctioned off everything from Dorothy’s ruby slippers to Greta Garbo’s gowns, and sold MGM’s vaunted film library to Ted Turner (who used it to start his TNT cable channel). At one point in the ’70s, when he was concentrating on his Las Vegas hotel properties, Kerkorian’s attorneys released a statement announcing that ”MGM is a hotel company and a competitively insignificant producer of motion pictures.” Now that he’s returned to Hollywood, there are those who suspect his motives are less than cinematic.
”I don’t think Kerkorian will hold on to [the studio] for long,” says James Robinson, who heads Morgan Creek, one of the losers in the MGM bidding. ”That guy doesn’t even buy green bananas.”
”This new public face of support for Kerkorian — it’s like putting lipstick on a wolf,” adds another disgruntled observer. ”It may look prettier, but it’s still a wolf.”
One theory posed by Kerkorian’s detractors has him masterminding an ’80s-style Barbarians at the Gate scheme to break up MGM/UA and sell its pieces at a profit — say, in 18 months or so, when the new DreamWorks studio will likely be shopping for a ready-made distribution system for its first slate of films. If true, though, that plan would have an obvious flaw: Besides its distribution network, there really isn’t much left of MGM/UA to break up. When Kerkorian sold the company in 1990 — for $1.3 billion, exactly what he’s just paid to get it back — it was already a studio with no physical plant, no active music division, a wan TV production side, and a largely gutted film library. And the man he sold it to — a slick Italian entrepreneur by the name of Giancarlo Parretti — wasted no time in letting things slip even further, defaulting on loans and inching the studio to the brink of bankruptcy. For the last four years, MGM/UA has been owned by Parretti’s ex-creditor, the French bank Credit Lyonnais. The bank has done a surprisingly deft job managing the property, but still — it hardly resembles the ”dream factory” Louis B. Mayer built.