MGM/UA Film Cutback to Reduce Revenue

MGM/UA Communications Co. said Monday that it expects lower revenues from new movies over the next 18 to 24 months because it has scaled back motion picture development in anticipation of a sale of the company.

The cutback began last March after MGM agreed to be acquired by Qintex Australia Ltd. and continued until a revised $1.5-billion agreement was terminated in October, MGM said in a filing with the Securities and Exchange Commission.

MGM terminated the acquisition agreement after Qintex failed to provide promised assurances of its ability to finance the deal.

MGM said it continues to consider “various alternatives, including the possible sale of all or a portion of the company to other parties.”

MGM, which released 22 movies in its fiscal year ended Aug. 31, has 14 films scheduled for release in fiscal 1990, including eight that have already been released.

Movies yet to be released in the current fiscal year include “Stanley & Iris,” starring Janes Fonda and Robert De Niro; “Lisa,” starring Cheryl Ladd, and “Blue Steel,” starring Jamie Lee Curtis and Eugene Hunt.

For fiscal 1991, MGM said it has only two movies scheduled for release: “Rocky V,” starring Sylvester Stallone, and “Prince of Tides,” starring Barbra Streisand.

“While the company expects to put a number of projects into production in the near future, it is unlikely that a sufficient number of motion pictures can be produced in time to avoid a reduction in the company’s release schedule during the latter part of fiscal 1990 and much of fiscal 1991,” MGM said in the filing.

“With such a reduction, it is expected that revenues from new pictures will be correspondingly lower over the next 18 to 24 months.”

MGM said it does not expect “any significant reduction in its distribution overhead expense,” although production and promotional expenses for new pictures will be lower as a result of the smaller release schedule.