MGM betting on The Hobbit
Metro Goldwyn Mayer (MGM) is betting that the upcoming release of the first of the three Hobbit movies and the new James Bond movie Skyfall will restore its finances.
Chief executive Gary Barber was upbeat about Sir Peter Jackson’s ‘The Hobbit: An Unexpected Journey’ during a conference call with investors on Friday.
The Hobbit was financed up front by Warner Bros, but under a joint deal MGM will repay a share of costs out of the upcoming proceeds.
After that, Warner and its New Line unit, will split proceeds with MGM, according to The Hollywood Reporter.
Barber predicted a significant increase in revenue and profits for the fourth quarter of this year and the first quarter of 2013 as Skyfall grosses more than any other Bond movie.
‘‘Skyfall will be the biggest Bond of all time,’’ he said.
The release of The Hobbit in December comes two years after MGM went through a bankruptcy.
MGM Holdings is expected to hold an initial public share sale after income from Skyfall and The Hobbit has boosted earnings.
Time Warner Inc’s chief financial officer John Martin told analysts this month that his company would recoup costs of The Hobbit from partners over time and the company would benefit from the release of the first movie in 2013 and beyond.
‘‘To put it in perspective, each of The Lord of the Rings movies did at least $US1 billion at (the) box office.
We anticipate that this is going to be a blockbuster release and we’re very optimistic for it,’’ Martin said.