Metro-Goldwyn-Mayer Inc 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 high debt load.
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 company as nonexecutive chairman, but will no longer be chairman of the board.
Stephen Cooper and Parent, along with Bedi Singh, MGM's chief financial officer, have been named members of the office of the CEO. Cooper, who was also named vice chairman, will be tasked with leading MGM's efforts to evaluate alternatives to improve its balance sheet, the company said.
Cooper co-founded restructuring advisory firm Zolfo Cooper LLC, oversaw Enron Corp's bankruptcy as interim chief executive and oversaw Krispy Kreme Doughnuts Inc's 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.
Movie studios have been fighting tumbling DVD sales and a tougher environment to raise money for new film production.
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.
The studio is home to classics such as the James Bond movies and has an upcoming release schedule that includes a remake of 1980 movie musical Fame in September.
MGM has been trying to refinance $3.7 billion of debt, most of which stems from a 2005 buyout of the company by a group of private equity and media investors.
The Hollywood studio said in May this year said it hired investment bank Moelis & Co to help refinance its debt and that it was talking with a steering committee of 140 creditors as part of the process.
MGM 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.
MGM was bought by private equity firms Providence Equity Partners, TPG, DLJ Merchant Banking Partners, a unit of Credit Suisse and Quadrangle Group; and media firms Sony and Comcast in 2005 for $2.85 billion.
The group, which bought MGM from its majority owner Kirk Kerkorian, also assumed debt of about $2 billion.
MGM's ownership breaks down as follows: Providence owns 29 percent, TPG owns 21 percent, Comcast owns 20 percent, Sony 20 percent, DLJ 7 percent and Quadrangle 3 percent.
The deal to buy MGM closed in April of 2005 and Sloan was appointed in October of that year.
Sloane 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 and Matthew Lewis)