MGM Buys Out Warner Pact
-- Metro-Goldwyn-Mayer here has agreed to pay Warner Home Video, Burbank, Calif., $225 million to end its arrangement with Warner to distribute all MGM home video products.
MGM will take control Feb. 1, 2000 of the titles it has produced since 1986. The distribution agreement was originally set to expire in May 2003. However, MGM will assign Warner the rights to distribute titles produced before 1986, which had been previously sold to Turner Entertainment, now a part of Warner.
Under the arrangement, post-1986 MGM titles, like "Thelma & Louise" and "Rain Man," will be under MGM's control, but older movies, like "Gone With the Wind" and "The Wizard of Oz," will remain with Warner. The previous agreement regarding these titles was to expire in June 2000.
This move gives MGM more flexibility in making production deals with other studios and could make a future sale of MGM more likely, according to industry observers. "Our desire to extricate MGM from this arrangement, originally executed by previous management in 1990, has been no secret," said Frank G. Mancuso, MGM's chairman and chief executive officer. "Now the path is clear to integrate all of our MGM, UA, Orion and PolyGram library under an internally managed organization and to fully realize our position as the world's leading content provider." Coming at a time when DVD is coming into its own, the new arrangement gives MGM the opportunity to build a home-video distribution system more up to date than those of other studios that were instituted 20 years ago, Mancuso said.
MGM will take a one-time, pretax charge in the first quarter to cover the costs of payment. "The financial impact on earnings will be very healthy for our company," said Dan Taylor, senior executive vice president and chief financial officer at MGM. The company could save between $15 million and $20 million a year by handling its own distribution.
Bill Targets Violent Games
LITTLE ROCK, Ark. -- A bill proposed by Arkansas Lt. Gov. Win Rockefeller would ban violent video games from public view or access, according to press reports. Sen. Doyle Webb filed Senate Bill 925 for Rockefeller.
The proposed law would make it a Class A misdemeanor to knowingly exhibit violent video games so as to allow viewing or access by people under 18. The punishment would be a year in jail or a fine of up to $1,000. Using the industry's rating system, the bill targets games rated R for restricted or MA for mature audiences.
"The video games basically numb our youth to the issue of commission of violence or of violent acts," Rockefeller said. This is not censorship, he said. "We think that drinking is harmful to people under the age of 21, so we restrict the access to alcohol. We think that smoking is dangerous to people under a certain age, so we restrict access to tobacco."
Top 10 Supermarket Video Rental Titles
Rank Wk Title (Wks Out)
There's Something About Mary (5)
1 1 Fox $108.97
Snake Eyes (3)
2 2 Paramount $104.16
Practical Magic (3)
3 6 Warner $107.37
4 4 Buena Vista $26.99
Ever After (1)
5 N Fox $19.98
Rush Hour (6)
6 3 Warner $107.37
7 7 Buena Vista $107.137
Urban Legend (2)
8 5 Columbia $107.37
9 8 Dream Works $26.99
The Truman Show (8)
10 9 Paramount $107.37
N=New*Minimum advertised price Week ended mar. 7
This chart, tailored for the supermarket video market, is based on information taken from more than 1,000 supermarket rental locations serviced by Ingram Entertainment, La Vergne, Tenn.