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MGM-Pathé Communications

MGM-Pathé Communications
Privately held company
IndustryMovie studio
FateForeclosure
Founded1990 (1990)
FounderGiancarlo Parretti
Defunct1992 (1992); reverted back to Metro-Goldwyn-Mayer
HeadquartersLos Angeles County, California
United States
Key people
Giancarlo Parretti
(MGM-Pathé, 1990–1991)
Alan Ladd, Jr.
(MGM-Pathé, 1991–1993)
Frank Mancuso, Sr.
(MGM/UA, 1993–1999)
Michael Marcus
(MGM, 1993–1996)
John Calley
(UA, 1993–1996)
Products
  • Motion pictures
  • Video releasing
  • Cinema Chains
  • Television

MGM-Pathé Communications was an American movie production company that operated in Los Angeles County, California from 1990 to 1992.

The company was founded and controlled by Italian financier Giancarlo Parretti through his purchase and merger of MGM/UA Communications Co. and Pathé Communications (unrelated to the French Pathé studio). The company was overshadowed by Parretti's fraudulent schemes and he found himself ousted from the studio in less than a year.[1][2][3][4][5][6][7][8]

History

On January 30, 1989, Parretti founded Pathé Entertainment (or Pathé Communications) after purchasing Cannon Films. Pathé Entertainment was named after the similarly-named French studio that Parretti anticipated to purchase. When Parretti had announced his intent to make the purchase, the French government scuttled Parretti's initial bid to buy Pathé due to concerns about his character, background, and past dealings.[9] Alan Ladd, Jr. was appointed as chairman and CEO of Pathé Entertainment.[7]

After bids by Parretti to acquire New World Pictures and Kings Road Entertainment went nowhere, Parretti set his sights on purchasing MGM/UA.[8] In the mid-1980s, American businessman Kirk Kerkorian sold portions of MGM/UA to Ted Turner's Turner Broadcasting System. In 1985–86, Kerkorian repurchased United Artists and then MGM, but without the company's film library and Culver City lot and film processing labs (entities which had been earlier sold by Ted Turner to Lorimar).[3] In 1989, Kerkorian agreed to sell his MGM/UA interests to Australian broadcasting company Qintex[6][10] after they tendered an offer of $1.5 billion deal to beat out Rupert Murdoch.[11] However, when Qintex was unable to provide a $50 million letter of credit the deal collapsed.[12] Five months after the Qintex deal fell through, Parretti brokered a deal to make the purchase for $1.2 billion,[13] but questions were raised over Parretti's financial acumen.[14][15]

Parretti gained interest from Time Warner chairman Steve Ross; the company forwarded $125 million to the MGM/UA purchase in exchange for exclusive home video distribution rights to the studio's product.[8] Turner Broadcasting System advanced Parretti $200 million for domestic television rights.[2][8] Parretti also made deals with Fininvest, Sansea, and Reteitalia to fund the acquisition. He ultimately received backing from a Dutch branch of Crédit Lyonnais to complete the MGM/UA purchase.[9] He then merged it with his Pathé Communications Group, to form MGM–Pathe Communications Co. in November 1990. Once Parretti took control, he laid off most of the financial staff and offered a major financial role to his daughter Valentina.[8]

Soon enough, chaos reigned at MGM. A check to Dustin Hoffman bounced. The opening of Thelma & Louise was delayed due to lack of funds. The studio owed a line of credit to Sean Connery that wasn't paid.[8] There were also reports of unpaid laboratory bills, unpaid creditors, and rather eccentric behavior from Parretti.[16]

In March 1991, MGM clients took a complaint to Los Angeles lawyer Stephen Chrystie, claiming that they were owed money ($18 million total) that the studio refused to pay. In turn, Chrystie took this issue up to the U.S. Bankruptcy Court. As it turned out, the studio's situation was dire that Chapter 7 bankruptcy was considered. Crédit Lyonnais refused to lend money to MGM any further unless the studio ousted Parretti from his position.[8] Ladd, a former President of MGM/UA, was then brought on board as CEO of MGM in April 1991,[2][17] and James Kanter as Chief Operating Officer.[18] The new change in management helped save the studio from involuntary bankruptcy.[8]

Soon after, Ladd and Parretti began engaging in a bitter power struggle.[8] When it became apparent that Parretti was making plans to regain MGM, Crédit Lyonnais seized control of the studio on June 17, 1991.[8][19][20][21] Parretti faced securities fraud charges in the United States and Europe.[22] On the verge of bankruptcy and failure, Crédit Lyonnais foreclosed in 1992,[23] assigned control of MGMPathé to a subsidiary,[6] and converted its name back to Metro-Goldwyn-Mayer. To no avail, Parretti had demanded that the MGM executive committee sell off certain assets in order to pay down the loan to Crédit Lyonnais so that he could regain control, but the committee declined due to concerns over the price adequacy of the portions of the company Parretti wished sold.[5]

In July 1993, Crédit Lyonnais replaced Ladd as CEO by bringing in former Paramount Pictures executive Frank Mancuso, Sr.[3][24] Mancuso then brought in Michael Marcus to head MGM[3] and former Warner Bros. executive John Calley[8] as head of the new United Artists.[3] As part of his exit package Ladd took some of the top properties, including Braveheart.[25] After the split, Pathé revived, but MGM/UA CI did not.[2] The company remained under control of Crédit Lyonnais Bank until 1996, when it was repurchased by an investment group led by Kirk Kerkorian,[4] who in 1997 also purchased Orion Pictures, thus obtaining rights to 1,900 film titles and 3,000 television episodes and bringing the MGM film archives to more than 5,000 titles at that time.[6]

List of films

References

  1. ^ Fabrikant, Geraldine (March 1, 1989). "THE MEDIA BUSINESS; Golan Quits Cannon Group To Form His Own Company". The New York Times. Retrieved July 14, 2014.
  2. ^ a b c d Prince, Stephen (2002). A New Pot of Gold: Hollywood Under the Electronic Rainbow, 1980–1989 (illustrated, reprint ed.). University of California Press. pp. 14–16, 71–74. ISBN 0520232666.
  3. ^ a b c d e Finler, Joel Waldo (2003). The Hollywood Story (illustrated, revised ed.). Wallflower Press. pp. 143–144. ISBN 1903364663.
  4. ^ a b Kroon, Richard W. (2014). A/V A to Z: An Encyclopedic Dictionary of Media, Entertainment and Other Audiovisual Terms. McFarland. p. 417. ISBN 0786457406.
  5. ^ a b Constance E. Bagley, Diane Savage (2009). Managers and the Legal Environment: Strategies for the 21st Century (6 ed.). Cengage Learning. p. 952. ISBN 0324582048.
  6. ^ a b c d Rothman, Howard (2004). 50 Companies That Changed the World. see Chapter 48, Metro-Goldwyn Mayer: Jaico Publishing House. ISBN 8179923266.
  7. ^ a b Slide, Anthony (2014). The New Historical Dictionary of the American Film Industry. see Pathé Entertainment, Inc.: Routledge. p. [page needed]. ISBN 1135925615.
  8. ^ a b c d e f g h i j k McClintick, David (July 8, 1996). "The Predator: How an Italian thug looted MGM, brought Credit Lyonnais to its knees, and made the Pope cry". Fortune. Cite error: Invalid <ref> tag; name "Book 6" defined multiple times with different content (see the help page).
  9. ^ a b Epstein, Edward Jay (June 1990). "The Mystery of the Instant Mogul". Spy: 6, 85–93. ISSN 0890-1759.
  10. ^ "Australian Firm to Buy MGM/UA for $1 Billion : Qintex Group to Acquire 4,000 Films; Kerkorian to Retain Some Assets". The Los Angeles Times. April 1, 1989. Retrieved July 14, 2014. |first1= missing |last1= in Authors list (help)
  11. ^ Reckard, E. Scott (September 15, 1989). "Qintex Tops Murdoch with Successful $1.5 BILLION Bid for MGM-UA". Associated Press. Retrieved July 14, 2014.
  12. ^ Stevenson, Richard W. (October 11, 1989). "Deal to Buy MGM/UA Collapses". The New York Times. Retrieved July 14, 2014.
  13. ^ Stevenson, Richard W. (March 8, 1990). "Pathe in $1.2 Billion Deal to Buy MGM/UA". The New York Times. Retrieved July 14, 2014.
  14. ^ Citron, Alan; Cieply, Michael (March 6, 1990). "A Hollywood Mystery : Entertainment: Despite Giancarlo Parretti's lavish lifestyle and his bid for MGM/UA, the Italian financier remains a little-known outsider". The Los Angeles Times. Retrieved July 14, 2014.
  15. ^ Richter, Paul (March 8, 1990). "The Mogul Behind Pathe's Bid: Entertainment: Italian financier Giancarlo Parretti has amassed an empire of TV and movie studios. But skeptics say his company lacks the finances to buy MGM/UA". The Los Angeles Times. Retrieved July 14, 2014.
  16. ^ Horn, John (January 6, 1992). "MGM wants to roar in movie world again". Bangor Daily News. p. 17. Retrieved September 2, 2014.
  17. ^ Horn, John (January 6, 1992). "Historic studio back, but will it roar again?". Star-News. Associated Press. Retrieved July 15, 2014.
  18. ^ Humphrey, Theresa (December 31, 1991). "Paretti removed from MGM-Pathe". The Daily Gazette. p. 17. Retrieved July 15, 2014.
  19. ^ staff (December 30, 1991). "Italian loses control of MGM studio". Sun Journal. Associated Press. Retrieved July 14, 2014.
  20. ^ staff (December 31, 1991). "Judge gives MGM reins to creditor". Eugene Register-Guard. Associated Press. Retrieved July 14, 2014.
  21. ^ staff (January 5, 1992). "Studio is looking into the future". The Daily News. Associated Press. Retrieved July 15, 2014.
  22. ^ Wells, Rob (January 5, 1996). "Financier settles fraud charges with SEC". The Hour. Associated Press. p. 17. Retrieved July 14, 2014.
  23. ^ staff (May 8, 1992). "MGM-Pathe auctioned to Credit Lyonnaise". Spokane Chronicle. Associated Press. Retrieved July 14, 2014.
  24. ^ staff (July 26, 1993). "French bank installs new head at MGM". Boca Raton News. Associated Press. Retrieved July 15, 2014.
  25. ^ Nollen, Scott Allen (1999). Robin Hood: a cinematic history of the English outlaw and his Scottish counterparts. McFarland. pp. 201–203. ISBN 0786406437.

External links