LOS ANGELES, June 2 -- The head of Credit Lyonnais said Thursday that the French bank is 'fully committed' to rebuilding the struggling Metro-Goldwyn-Mayer movie studio.
The pledge came despite a consistently dismal performance by MGM films over the past year -- a period in which Credit Lyonnais has spent hundreds of millions of dollars trying to revive MGM.
During his first visit to MGM's Santa Monica, Calif., headquarters, Credit Lyonnais Chairman Jean Peyrelevade cited positive effects from a new management team, including Chairman and Chief Executive Officer Frank Mancuso, and a financial restructuring of MGM last summer.
'As a result of these actions, MGM is now a fully competitive force in the filmed entertainment industry,' he said. 'A revived MGM, operating once again at full production and distribution capacity, will provide the bank with the best opportunity to realize value for its investment...Credit Lyonnais is fully committed to its strategy of rebuilding MGM.'
Credit Lyonnais gained control of the studio last year from Giancarlo Parretti over loan defaults and has until 1997 to sell the studio under U.S. banking laws.
The bank intends to comply with the regulations, but wants to do so in a way that assures 'the continuing vitality of MGM as a major player in the entertainment industry,' Peyrelevade said.
Mancuso cited Credit Lyonnais's support in placing a 'slate of films which we believe is as competitive as any in the industry.'
MGM has two potential blockbusters coming out within the next month -- 'Getting Even With Dad,' a comedy starring Macaulay Culkin and due out June 17, and 'Blow Away,' a thriller starring Jeff Bridges and Tommy Lee Jones.
MGM's recent films, including 'Clean Slate,' 'Six Degrees of Separation,' 'Undercover Blues,' 'Son of the Pink Panther' and 'Meteor Man,' have racked up poor performances with none even coming close to $20 million in domestic grosses.
The studio announced plans a year ago to produce and release about 20 films a year, which would carry a price tag of about $500 million.
Since last summer, MGM executives have become actively involved in bidding for projects and have made deals with big-name talents such as producer Steven Spielberg, director Christopher Columbus, screenwriter Ron Bass and actress Michelle Pfeiffer. It also recently reaped a windfall late last from a pay-TV deal with Showtime with an estimated value of $1 billion.
