The initial negative reception to “Lions for Lambs” – the first movie to come out under Tom Cruise and Paula Wagner’s resurrected United Artists label – could harm parent studio Metro-Goldwyn-Mayer’s own attempts to raise money for film productions.
MGM had enlisted Goldman Sachs to raise between $500 million and $1 billion before the credit markets crashed this summer, and several sources confirmed that while the credit markets are still tight, the investment bank is again making the rounds for MGM.
But with “Lions for Lambs” – which also stars Robert Redford and Meryl Streep – so far tracking the worst among audiences for any Cruise movie to date, the Nov. 9 release of the film is bound to dampen enthusiasm for MGM’s fund.
A spokesman for United Artists said “Lions for Lambs” was tracking where it should be given the amount of money the studio spent on marketing, with one-third of its core audience of males aged 25 and over claiming to be interested in seeing the film.
MGM doesn’t pick United Artists’ movies, but it did throw its weight – not too mention millions of dollars in start-up capital – behind Cruise and Wagner as producers, and that’s causing concern among film-financing investors.
“Tom and Paula’s track record as producers has been disappointing,” said a film-financing source, “and people are wondering why MGM thinks of them that way [as producers].”
Despite this, a source who was asked over the summer to invest in MGM said that investors don’t understand that inherent in the value of the company is its sequel rights to film franchises such as the James Bond series. This source predicted that the studio will be able to secure its financing on “attractive terms” by early next year.
“Goldman will do this financing successfully for MGM, its investors and everybody else involved,” this source said.
But another source who was asked to invest in MGM’s fund countered that the studio didn’t have enough movies in its pipeline to justify investing up to $1 billion in the studio.
“Just doing franchise films isn’t enough,” this source said. “They need more of a track record.”
Further complicating matters, according to another financing source, is the fact that MGM doesn’t have much control over the rights they claim to hold.
For instance, the studio has the rights to distribute but not produce “The Hobbit.” New Line has those. MGM also is currently in litigation over the rights to “Terminator 4.” That’s why “Lions for Lambs” is so important. Its performance will reflect on MGM given that it is distributing the movie.
“The knock against MGM has been that they aren’t good at distributing movies,” said a former studio executive who has worked with MGM. Of the 40 films that MGM has distributed since 2005, only five have grossed more than $50 million, according to figures supplied by Media by Numbers.
That prompted one investor to ask rhetorically, “Are all the movies that bad, or is MGM just not distributing them well?”