Not only is Metro-Goldwyn-Meyer getting zero say in the operations of Rainbow Media's entertainment networks, the film studio has to scrounge for cash to complete its deal for 20% of the operation.
To finance the $825 million payment, MGM will try and sell $500 million to the public. The remaining $325 million will come from a convertible stock sale to Kirk Kerkorian's Tracenda Group, MGM's controlling shareholder which has a long history buying and selling MGM's assets.
The deal will give MGM and interest in such networks as American Movie Classics, Bravo, and Independent Film Channel, MGM is trying to sell stock. But despite valuing the operation at $4.1 billion, MGM has no input in management of the operation, not even a seat on some sort of board or management committee.
- John Higgins