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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 15, 1999
METRO-GOLDWYN-MAYER INC.
(Exact Name of Registrant as Specified in its Charter)
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<S> <C> <C>
Delaware 1-13481 95-4605850
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification
of Incorporation) No.)
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2500 Broadway Street 90404
Santa Monica, California (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (310) 449-3000
None
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On March 15, 1999, the Company issued the press release attached hereto as
Exhibit 20.1, which is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibit is filed with this report on Form 8-K:
Exhibit No. Description
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20.1 Press Release of Metro-Goldwyn-Mayer Inc., dated March
15, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METRO-GOLDWYN-MAYER INC.
Dated: March 16, 1999 By: /s/ Daniel J. Taylor
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Daniel J. Taylor,
Senior Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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20.1 Press Release of Metro-Goldwyn-Mayer Inc., dated March
15, 1999.
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EXHIBIT 20.1
[LETTERHEAD OF METRO-GOLDWYN-MAYER INC.]
For immediate release Contact: Craig Parsons
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March 15, 1999
METRO-GOLDWYN-MAYER, WARNER HOME VIDEO
NEGOTIATE EARLY TERMINATION OF VIDEO DISTRIBUTION AGREEMENT
-- MGM Regains Control of Video, DVD Library; Turner Product Reverts to WHV--
Santa Monica, CA In a significant move to regain full control of its video
and DVD library worldwide, Metro-Goldwyn-Mayer Inc. (NYSE:MGM) announced that it
has entered into an agreement with Warner Bros. today for an early termination
of its existing video distribution agreement with Warner Home Video (WHV). The
original agreement with WHV was to end in May 2003.
In announcing this early termination, MGM Chairman and Chief Executive
Officer Frank G. Mancuso said, "This is a very important strategic step for
MGM, since we are now closer than ever to total control of this enormous
collection of film assets. In addition to regaining control of our global video
and DVD distribution, a substantial portion of our television rights previously
held by other long-term licensees in domestic and certain European markets will
revert to MGM in 2000."
"This is a positive development for our company and a response to the
changing landscape in the home entertainment market. Our desire to extricate
MGM from this arrangement, originally executed by previous management in 1990,
has been no secret. Now the path is clear to integrate all of our MGM, UA,
Orion, and Polygram library product under an internally managed organization and
to fully realize our position as the world's leading content provider," he
added.
WHV will continue to distribute MGM's video and DVD product, under the
terms of a transitional distribution agreement from today through January 31,
2000, to facilitate MGM's conversion to self distribution. Under terms of the
termination agreement, MGM has paid to WHV $112.5 million and will make an
additional payment of $112.5 million (plus interest) on September 1, 1999. In
addition, effective January 1, 1999, MGM has assigned to WHV all rights with
respect to the Turner Entertainment library of video product, which it had been
distributing, consisting of pre-1986 MGM titles and pre-1948 Warner Bros.
titles, which under the distribution deal were originally set to expire in June
2000.
Under terms of the agreement signed today, all restrictive provisions in
the video rights agreement between MGM and WHV have been terminated, including
limitations on the acquisition and disposition of film rights and the
requirement that future affiliates of MGM
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distribute their product through WHV. In addition, all of the security interests
encumbering the MGM library in favor of WHV have been released.
MGM expects to take a one-time pretax contract termination charge in the
current quarter of approximately $225 million for costs in connection with the
transaction. The Company expects to finance the transaction in part with
borrowings under its existing credit facility, and is considering various
alternatives to finance the remaining transaction costs and to increase the
company's liquidity. Such alternatives involve a combination of debt and
equity, including a possible rights offering. MGM expects to incur certain
additional costs in 1999 as part of its transition to self distribution by
February 1, 2000.
Metro-Goldwyn-Mayer Inc. is actively engaged in the worldwide production
and distribution of entertainment product, including motion pictures, television
programming, home video, interactive media, music, licensed merchandise, a film
library of 5,100 titles -- of which 4,780 titles were produced since 1948,
representing more than 50% of the Hollywood studio-produced films since that
year -- and a significant television library. The Company's operating units
include MGM Pictures, United Artists Pictures, Orion Pictures, G2 Films, MGM
Worldwide Television Group, MGM Distribution Co., MGM Home Entertainment and
Consumer Products Group, MGM Music, and MGM Interactive, among others. For more
information on MGM, visit MGM Online at http://www.mgm.com.
This news release contains forward-looking statements that are based upon
the company's estimates and expectations concerning future events and are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in the forward-looking statements. These
risks and uncertainties include, among other things, future competitive and
market conditions, whether the company's products achieve customer acceptance,
future business decisions, and other factors, including those described in the
company's filings with the Securities and Exchange Commission, all of which are
difficult or impossible to predict accurately and many of which are beyond the
control of MGM. In light of the significant uncertainties inherent in the
forward-looking information herein, the inclusion of such information should not
be regarded as a representation by the company or any other person that the
company's objectives or plans will be realized. This press release shall not
constitute an offer to sell, or the solicitation of an offer to buy, any
securities of the Company. If the Company elects to make a public offering of
securities, it will file a registration statement with the Securities and
Exchange Commission, and any such offering will only be made by means of a
prospectus to be contained in such filing.
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