Further separating its fortunes from those of Sony Corp. of America, MGM said Tuesday that it is moving its home entertainment releases to 20th Century Fox Home Entertainment from Sony Pictures' U.S. home entertainment division, which had been distributing MGM titles for nearly a year.
The move came as MGM announced that it will re-establish its worldwide television sales operation to complement its recently resurrected theatrical distribution efforts.
MGM characterized the shifts as part of its ongoing efforts to revitalize and control distribution of its new releases and its extensive library, which includes more than 4,000 movie titles and 10,000-plus episodes of TV programming.
"The bigger picture is that MGM is emerging as a player in the motion picture industry, with 20-25 new releases a year, where we control the domestic rights on most of them and the foreign on many of them," MGM chairman and CEO Harry Sloan said.
MGM's vast library had been a critical reason why Sony led a consortium of investors, including giant cable firm Comcast Corp., in a $5 billion deal to purchase MGM in September 2004.
Sony, which wound up with about 20% of MGM, was said to be hungry for more product for its nascent Blu-ray Disc technology, which is slated to materialize this year as one of two rival high-definition optical disc formats vying to replace DVD as the public's home viewing format of choice.
But since the deal was struck, investors had second thoughts about unraveling the MGM organization and in October approved the hiring of longtime media executive Sloan to oversee MGM's return. The studio subsequently said it was getting back into theatrical film distribution and now says it will re-establish its worldwide television distribution efforts as well. Exec vp world television distribution Jim Packer will oversee that initiative as MGM ramps up a staff of about 100 to sell MGM film, TV and library titles to TV, both domestically and internationally. "We want to take back control of worldwide television," Sloan said.
While MGM exec vp home entertainment Blake Thomas will oversee a smaller staff supervising MGM home video efforts, the company will consolidate its home entertainment distribution under Fox. Along with Sony, Fox already had been distributing some of MGM's product internationally, while Sony had been handling domestic distribution for MGM's home video titles.
Under its existing arrangement with Sony, MGM's titles had to compete for attention with Sony's own homegrown titles. When the MGM board, which includes Sony representation, met Tuesday to consider the issue, Fox was touted as a better alternative because it has invested heavily in third-party distribution, making it a potentially more favorable purveyor of MGM fare.
As it increases its theatrical output, MGM expects to release 20-25 new films a year -- which will then move to home video -- and 10-15 direct-to-video titles, and it will also repackage titles from its library. MGM did not reveal the terms or length of the Fox deal but called it a long-term arrangement.
While Sony will lose access to MGM titles that it can release on Blu-ray, its efforts to promote the technology will still be buttressed by the fact that Fox also is known as a strong Blu-ray supporter.
Sony Pictures Home Entertainment executives were not available for comment. A statement from Sony corporate, however, noted that both MGM and Fox "are key supporters of the Blu-ray Disc format, which will be of tremendous benefit to consumers as well as the entertainment community overall."
The changes do not affect Sony's theatrical distribution of the upcoming James Bond feature "Casino Royale," slated to open in November. But while Sony controls the movie's theatrical distribution, MGM will handle its worldwide televisions sales and controls its video -- so its DVD could go through Fox.
On the theatrical front, Sony and MGM have agreed to co-produce and co-distribute the next Bond movie. Additionally, Sony and MGM, along with Revolution Studios, have struck a co-financing arrangement on "Rocky Balboa," the fifth "Rocky" sequel, which MGM is scheduled to release theatrically in December.
The Sony statement further said the two companies will "pursue other (joint) ventures, including scan-based distribution, and vigorously support our continuing relationship with our partners to preserve and enhance the value of the MGM brand."
MGM expects to shift its home video output to Fox within 45-60 days and to set up its new television sales operation within 90 days.