Posted by: Ron Grover on November 23
How’s the modern day “data room” work? Forget the locked conference room in a law firm, where the dealmakers of old used to pour over reams of facts, figures and assumptions while contemplating whether to bid for a company. MGM, the fabled but debt-hobbled studio, has set up an online site with its data and is parceling out access as it prepares to launch an auction pressed by its debt holders.
A first round of bids are expected shortly after Thanksgiving from companies that have been given access to the online site – so far that’s Warner Brothers(TWX) and Fox (NWS), according to a source with knowledge of the bidding. But even if Warner and Fox submit bids, those bids aren’t likely to be the end of the MGM drama. Instead, holders of the studio’s $3.7 billion in debt are expected to use what are expected to be all-cash bids from those studios as the starting point in their decision as to the “strategic alternatives” they choose to take. An MGM spokeswoman did not return requests for comment.
MGM said on Nov. 13 that it was “beginning a process to explore various strategic alternatives, including operating as a standalone entity, forming strategic partnerships and evaluating a potential sale of the company.” It also said that it had received an extension from Dec. 15 to Jan. 31 of the forbearance agreement from its lenders that has allowed MGM to postpone debt payment that threatens to throw the studio into bankruptcy. Sources with knowledge of the online data room say that MGM and its investment bankers haven’t as yet opened access to the wide range of parties that might consider bidding on the company, instead choosing to see how high competing studios might value the company. The studios are expected to value the company on the basis of its 4,100 film library, which includes such classics as The Wizard of Oz and Gone with the Wind, and the rights to the James Bond, Pink Panther and other franchises.
Getting a potential price tag for the studio would enable the 140-odd debtor group to determine whether they might hang onto the studio or launch a formal auction process.
At least one private equity fund, Qualia Capital, is said to be interested in joining the bidding but would do so with a structured plan that would include injecting some capital into MGM, converting some of its debt into equity and operating the company as a standalone venture n hopes of increasing its value for a sale further down the road. Another studio, Lions Gate(LGF) is also said to be interested in taking a look at MGM’s financials and might try to structure a bid. Lions Gate declined comment. Media dealmaker John Malone(LMBIA) has said he’d like to look at the data. But the Liberty Media chairman says he isn’t likely to bid on the entire studio.
Posted by: Tom Lowry on November 17
Josh Tyrangiel, who was named this morning to be editor of a Bloomberg-owned BusinessWeek, says it's too early to lay out specific plans for the magazine but his goal is to create "a great indispensable business weekly."
In a brief interview, Tyrangiel, 37, says he plans to meet soon with BW staffers as a group and individually to gather their input so "we can formulate a strategy for the magazine together." Tyrangiel has been serving as a deputy managing editor of Time magazine and as the top editor of its online operations.
While he earned kudos for his work online at Time, Tyrangiel says he is committed to long-form journalism in print. "Listen, the big mistake magazines made was trying to imitate the Web," he said. "Magazines are read reclining, and that lends itself to longer, more in-depth stories."
Tryangiel has edited business stories in the past but he acknowledged that he is not a traditional business journalist. He says his background is an "opportunity" for the magazine. "I need help," he said, "and I am going to rely on the staff. I want the staff to stay in their lanes and be experts on their subjects."
He believes a big reason that Bloomberg LP Chief Content Officer Norman Pearlstine and Bloomberg Editor-in-Chief Matthew Winkler recruited him is that "I am a good person at bringing people together. We are going to work on this as a team."
Posted by: Tom Lowry on November 17
Josh Tyrangiel, a deputy managing editor at Time magazine and the top editor of its online operations, will become the first editor of a Bloomberg-owned BusinessWeek. The acquisition, announced Oct. 13, is expected to close in early December.
By selecting the 37-year-old Tyrangiel who is not a business journalist per se, Bloomberg clearly wants a leader for BusinessWeek who is not only a highly-regarded editor but someone who has demonstrated he knows how to reach a wider array of readers in both print and online. A major reason Bloomberg LP executives pursued BusinessWeek was to reach a broader audience beyond Wall Street and the professional investor communities.
“I saw Josh in a number of leadership positions as he took on increasing responsibilities at TIME," says Norman Pearlstine, Bloomberg's chief content officer and a former editor-in-chief of Time Inc., Time's parent. "Working closely with him .... I came to appreciate his intelligence, curiosity, energy, and integrity. Josh is recognized within Time Inc. and its parent, Time Warner Inc., as an ‘editor’s editor’ and a natural leader. His understanding of the ways in which print and online publications can work together will serve Bloomberg well as we expand our consumer media offerings.”
In some media circles, Tyrangiel was considered a leading candidate to succeed Time managing editor Richard Stengel. According to sources, Time Warner CEO Jeff Bewkes was so impressed with Tyrangiel that he tried to recruit him to be come the editor of CNN.com, the online arm of the 24-hour cable news channel, but Time Inc.'s current editor-in-chief John Huey intervened and convinced Tyrangiel to stay at Time with the promise that he might one day succeed Stengel.
During his tenure at Time.com, Tyrangiel boosted the Web site's traffic from 400 million page views in 2006 to what could be an estimated 1.8 billion page views this year. Previous to Time, Tyrangiel worked at Rolling Stone and Vibe magazines and served as a news producer at MTV.
“Josh Tyrangiel will be a tremendous asset as we build the market presence of BusinessWeek backed by Bloomberg’s global multimedia news organization, to create the most compelling business news for the most sought-after readers.,” said Bloomberg L.P. President Daniel Doctoroff.
Tyrangiel will report to Pearlstine, who in turn will report on editorial matters to Matthew Winkler, Bloomberg's editor-in-chief. "Norm and Josh are the ideal team to deliver a terrific business magazine that brings the most trusted, most influential and most important news to a global audience of thought leaders,” said Winkler.
Tyrangiel will work alongside BusinessWeek executive editors Ellen Pollock and John Byrne and managing editor Ciro Scotti. Pearlstine announced earlier that they would continue in their roles at the magazine. Tyrangiel succeeds Stephen J. Adler, who announced his resignation as editor-in-chief on Oct. 20.
Posted by: Tom Lowry on November 13
Walt Disney CFO Tom Staggs may soon get some on-the-job experience in another corner of the Mouse House. Disney’s top financial executive is expected to swap jobs with Disney theme park chief Jay Rasulo, according to knowledgeable sources. The swap comes at a crucial time for Disney, which is planning to build a theme park in Shanghai.
No announcement has been made yet, but Disney CEO Bob Iger is expected to describe the swap as a new policy by which he moves longstanding executives into new roles to expand their knowledge of the company.
However, longtime Disney observers say this could buttress Staggs’ chances to contend for a more senior role later on. The 19-year Disney veteran is believed to have wanted for some to become Disney’s chief operating officer, a position that currently doesn’t exist. Disney insiders say Staggs has been keen on that job ever since Iger was elevated to CEO in 2005. Rasulo, who has run the theme parks since 2002, was a highly-regarded strategic planner for Disney and then oversaw the Disney-managed theme park outside Paris before being elevated to his current role. The move is reminiscent of efforts by former Disney CFO Richard Nanula, who switched jobs to run Disney theme parks in the mid-1990s in order to bolster his own bid for a more senior job.
This post is from my colleague Ron Grover who is stuck in Los Angeles traffic
Posted by: Ron Grover on November 11
It may not be long before the troubled MGM studio is forced by its creditors to seek a buyer. That’s the word coming out of a Nov. 4 meeting between MGM CEO Stephen Cooper and the debt-hobbled film company’s 140-member creditor committee. According to one source with knowledge of the meeting, the creditor group turned thumbs down on a proposal by Cooper to convert the studio’s $3.7 billion debt into equity as part of a restructuring plan to keep the studio out of bankruptcy.
Taking equity in MGM seems dicey given that the studio’s current equity owners, which include several private equity firms, Sony (SNE) and Comcast (CMCSA), have already written down their investments from their $5 billion purchase of the studio in 2004. But Cooper, who has previously been brought in to help resurrect the fortunes of Krispy Kreme and Enron, wanted the creditors to allow allow him to raise as much as $1.2 billion in fresh debt to help jumpstart MGM’s film production. That prompted the debt holders, which could push the studio into bankruptcy, to question Cooper instead about seeking a buyer. That discussion came at a Nov. 6 meeting.
The creditors have great leverage over Cooper. In October, the committee gave MGM until Dec. 15 to forgo paying interest on the studio’s debt and to keep the company out of bankruptcy court. In return, however, the creditors insisted upon a major restructuring. Now, their patience seems to be wearing thin, according to a source with knowledge of the meeting. Cooper is said to have told the creditors that it’s unlikely he can get more than $1.5 billion for the studio, which is roughly what MGM’s rights to the James Bond franchise alone might be worth. An MGM spokeswoman would not comment.
The creditors apparently are getting close to taking the haircut just to be rid of the troublesome studio, according to the source. Among those who have been mentioned as potential candidates to buy MGM are studios Warner Brothers (TWX), Fox (NWS)and Lions Gate (LGF)and private equity fund Qualia Capital, whose principals Amir Malin and Ken Schapiro are industry veterans who have a successful record at turning around wobbly entertainment companies. The studios are said to be primarily interested in getting their hands on MGM’s 4,000-title film library, the Bond franchise and MGM’s rights (along with Warner) to make the Lord of the Rings prequel The Hobbit.
Other potentially interested buyers could be former News Corp. president Peter Chernin and one-time Yahoo CEO Terry Semel, a former Warner Brothers studio chairman. Neither man could be reached for comment.
