* CEO Sloan out as CEO, remains as non-exec chairman
* Team of three tasked to "office of CEO" role
* Restructuring expert Stephen Cooper brought in
* Cooper charged with improving balance sheet
* Production boss Mary Parent elevated
(Adds comments by new CEO Mary Parent, paragraphs 4 and 5)
By Megan Davies and Sue Zeidler
NEW YORK/LOS ANGELES, Aug 18 (Reuters) -
Metro-Goldwyn-Mayer Inc [MGMYR.UL] has replaced its chief
executive, Harry Sloan, with a team that includes a turnaround
expert and its production boss, Mary Parent, as the storied
Hollywood studio grapples with reducing a massive debt load.
MGM has a renowned film library, home to James Bond movies
and other gems, but has been struggling to create new hits amid
a faltering economy and shrinking DVD market. Adding to its
woes are looming payments on $3.7 billion of debt which stems
from a 2005 buyout of the firm.
Many Hollywood insiders have long believed MGM needs to be
merged or sold to be successful. But when asked if MGM was
considering an outright sale, Parent told Reuters MGM was
positioning itself for the long term as a production company.
"The plan is to keep doing what we are doing. I have a full
slate of movies shooting, or are in pre- and post-production.
The capital structure needs to be addressed, but with the films
we have now and in the pipeline, I am very positive," she said
in an interview.
"Everybody's very excited and on board with the new
structure. This is a long-term plan for the company, we have a
really solid team and I am going to continue making movies,"
Sloan, a veteran Hollywood businessman who took the helm a
few months after the 2005 buyout of MGM and who also invested
in MGM, will remain with the studio as nonexecutive chairman,
but will no longer be chairman of the board.
Restructuring expert Stephen Cooper and Parent, along with
MGM Chief Financial Officer Bedi Singh, have been named
"members of the office of the CEO."
Cooper, also named vice chairman, will lead efforts to
evaluate alternatives to improve MGM's balance sheet, it said.
According to film financing experts, MGM's operations have
largely been funded recently by its library cash flow and
access to $500 million of financing set up for its United
Artists label, partly owned by movie star Tom Cruise.
It recently released "Valkyrie," starring Cruise as a
rebellious Nazi officer.
Cooper co-founded restructuring advisory firm Zolfo Cooper
LLC, oversaw Enron Corp's bankruptcy as interim CEO and oversaw
Krispy Kreme Doughnuts Inc's KKD.N restructuring as CEO.
Parent, a former executive with Universal Pictures, joined
MGM in March 2008 to breathe new life into the studio and has
been leading MGM's production efforts as chairwoman of MGM's
Worldwide Motion Picture Group.
"This isn't so much a referendum on Harry Sloan's tenure as
it is the plain recognition that shareholders and creditors are
squaring off in an all-or-nothing battle," said David Molner,
managing director of Screen Capital International, a media and
entertainment financing firm.
MGM in May hired investment bank Moelis & Co to help
refinance its debt and said it was talking with a steering
committee of 140 creditors as part of the process.
The studio, due to release a remake of the 1980 musical
"Fame" in September, faces a payment of $250 million in April
2010 on its revolving credit, with the $3.7 billion of term
debt due in June 2012.
But cash flow from MGM's film and TV library operations
finished 2008 down about 5 percent from a year ago, a source
familiar with the matter previously told Reuters.
"I think this a sign that they're going in the direction of
not having a production slate," said Steve Blume, chief
operating officer of Content Partners LLC, which acquires films
in the secondary market from hedge funds, private equity firms
"MGM has several options, including an outright sale of the
company or making it into a pure library company, which is
valued at somewhat less than the debt," Blume said.
Rumors of MGM's potential sale have surfaced for years,
including last summer when Paula Wagner, a movie producing
partner with Tom Cruise, stepped down from her role as chief
executive of MGM's United Artists.
MGM's debt mostly stems from its 2005 buyout by a group
including private equity firms Providence Equity Partners, TPG
(TPL.N), DLJ Merchant Banking Partners, a unit of Credit Suisse
CSGN.VX and Quadrangle Group; and media firms Sony
Corp(6758.T) and Comcast Corp (CMCSA.O) in 2005 for $2.85
The group, which bought MGM from its majority owner Kirk
Kerkorian, also assumed debt of about $2 billion.
Sloan trained as a lawyer but left a private law practice
in 1983 and has been a media executive and investor since. He
invested in and ran three media companies -- SBS Broadcasting,
Lions Gate Entertainment Corp and New World Entertainment.
(Reporting by Megan Davies and Sue Zeidler; Editing by Steve
Orlofsky, Matthew Lewis and Richard Chang)