On Hold in Hollywood : Films, TV Shows Caught in MGM-Pathe’s Financial Quagmire

As MGM-Pathe Communications Co. and its television arm, MGM/UA TV Prods., continue to slalom back and forth between the verge of bankruptcy and miraculous turnaround, the fate of two dozen films and television programs hangs in the balance.

“We were up to bat at the moment they went broke,” sighed a high-ranking source on “Delirious,” the John Candy film that had been slated to open last month. “We were booked into 1,300 theaters on March 8.”

Instead, the source said, even the posters advertising the movie were held up--stuck at the printer’s while the studio hustles the money to pay for them.

Six films that had originally been slated for release between February and April, including “Thelma & Louise,” starring Geena Davis and Susan Sarandon, and “Delirious,” will not appear in theaters for at least another month, and in some cases four to five months, according to sources at the films and the studio.

The fate of those films, plus an additional seven which had been slated for release later in the year, remains unknown as the studio continues to shuffle its release schedule.

And while MGM/UA TV is working on six pilots, four movies of the week and an animated children’s series, the production company has been embarrassed by its parent firm’s failure to pay bills and the defection of talent such as “thirtysomething” producers Edward Zwick and Marshall Herskovitz.

“The networks were concerned about the finances of the company and whether we would be able to complete the (programs) and deliver them,” said David Gerber, chairman and chief executive officer of MGM/UA TV.

Gerber did eventually persuade the networks that he could deliver, and indeed has so far produced his shows--which include “In the Heat of the Night” and “Young Riders”--and movies on time. But the company’s overall slate has been smaller than it would normally be, he said, and the atmosphere is tense.

“It’s been rough,” Gerber said. “We’re treading water. We’re holding that ball up in the air, but we don’t know if we’re going to drop it or not.”

Last week, Credit Lyonnais Bank Nederland reportedly promised that it would provide a cash infusion of $145 million--but only if certain conditions were met. The Dutch subsidiary of the French financial institution Credit Lyonnais has been the company’s major lender. About half of the money is supposed to go toward debt payment, leaving less than $75 million to release the 13 films, pay for television production and meet other obligations.

First, the bank reportedly said, financier Giancarlo Parretti--who bought MGM/UA for $1.4 billion last year and merged it with Pathe Communications, which he already owned--had to resign as chairman and chief executive officer. Parretti did so on April 17. Hollywood insider Alan Ladd Jr. took over the top management position. He had at different times before the merger run both MGM/UA and Pathe Communications.

But the loan also hinged on Ladd’s ability to convince a group of producers and vendors to withdraw an involuntary bankruptcy suit that they filed against the company on March 29. And while company executives say they are optimistic that the suit will be withdrawn, and some of the creditors--who claim to be owed between $12 million and $17 million--are taking part in settlement discussions, the suit is still pending.

“We won’t receive the money until there is a resolution, but that doesn’t mean that these films wouldn’t ever see the light of day,” said MGM-Pathe spokesman Craig Parsons. “The company is confident that they will be able to release them.”

It costs $10 million to $15 million to release a film properly, said Parsons, money that the company simply did not have in February and March.

But now, buoyed by anticipation of the loan from Credit Lyonnais, Ladd and other executives are scrambling to come up with a new schedule.

While the new slate has not yet been made public, sources on “Thelma & Louise” say that film is now set for release May 24.

“Delirious,” which has been alternately scheduled for release in March, April and May, will now likely come out in July or August, according to sources on the film.

Dates have not yet been set for the other films, although sources on Mel Brooks’ “Life Stinks” say a July release will be considered if some re-editing on the film, which was originally supposed to come out in March, is finished in time.

“Crooked Hearts,” starring Peter Coyote and Jennifer Jason Leigh, was originally slated for release in April. It was rescheduled for May 3, but sources familiar with the project say they are doubtful that the date will hold.

Publicly, producers and others working on films for MGM-Pathe say they are confident the money to release the films will come through. But privately, they admit that they are worried.

“When people spend $1.4 billion on a studio and then don’t have the money to run it, you have to wonder about whether they can release your film,” said one producer.

“We’ve had other problems (besides the release date)” said a principal on another film. “We couldn’t get our film out of the lab, because (MGM-Pathe) hadn’t paid Deluxe. Then we had trouble getting our sound done. It took six weeks.” Most producers and other executives interviewed said that, in the end, the money and services did come through for their films. And most said they believed that the studio would eventually provide suitable releases for them.

“I kept speaking to them on a daily basis and also to our agent and was told not to worry, and they have proved to be correct,” said Anthea Sylbert, producer on the Goldie Hawn vehicle “Crisscross.” “In fact, everything that we’ve been promised has been forthcoming.”

An executive on one of the 13 films said: “I heard from one producer that the money always came late, but it did arrive. It came from three different banks and in a mixture of checks and cash, but it did get there.”

If the company does not climb out of the hole in time to release the films, the results could be messy. Producers would have to buy their films back from MGM-Pathe and look for new distributors, and depending on the degree to which the studio was involved in financing the film in the first place, that could be an expensive proposition.

In certain circumstances, producers could go to court to force the company to allow the film to be moved to another distributor. Or, as in the case with Brooks’ “Life Stinks,” the producer might have retained partial rights to the project from the beginning.

“Life Stinks” was financed not only by MGM-Pathe, but by Brooks as well, said associate producer Kim Kurumada, and distribution is shared by MGM-Pathe and Twentieth Century Fox.

“We would find some other way to distribute if MGM-Pathe doesn’t have the money,” Kurumada said. “Mel has a definite audience, and there’s nothing a distributor likes better than to have an audience.”

In addition to the promise of cash from Credit Lyonnais, it is the personality and reputation of Ladd, whose nickname in Hollywood is “Laddie,” that the filmmakers say bolsters their confidence.

“He’s a fighter,” said MGM/UA TV chief Gerber, whom observers say has agreed to stay at the struggling studio on the strength of Ladd’s decision to take over.

“It’s Laddie’s intention to put the movies out,” said one producer. “And Laddie was very protective about the movies in terms of wanting them to be released properly and not just throwing them out of the tree.”

Filmmakers, for the most part, are simply waiting and continuing to work. Their projects, after all, are among the studios few assets--the only way besides television production that MGM-Pathe can make money.

“I ought to stand up and scream and shout and say, ‘How dare they (mess) up my art,’ ” said “Liebestraum” producer Eric Fellner, who has resigned himself to an uncomplaining ride on the roller coaster. “But we don’t live in an ideal world.”

A REEL JAM

The following films are planned for 1991 release by MGM-Pathe:

“Company Business”: Gene Hackman, Mikhail Baryshnikov

“Crisscross”: Goldie Hawn

“Crooked Hearts”: Peter Coyote, Jennifer Jason Leigh

“Delirious”: John Candy

“Liebestraum”: Kevin Anderson, Kim Novak

“Life Stinks”: Mel Brooks

“The Man in the Moon”: Sam Waterson

“Shattered”: Tom Berenger

“Thelma & Louise”: Susan Sarandon, Geena Davis

“Harley Davidson & the Marlboro Man”: Mickey Rourke

“Timebomb”: Patsy Kensit

“Rock-A-Doodle” (animated): Don Bluth, supervising producer/director