MGM Loses Money on 'Dragon Tattoo'
MGM said Thursday that it expects to lose money on "The Girl With the Dragon Tattoo."
MGM execs told investors that would only co-finance the next two sequels in the Stieg Larsson's "Millennium Trilogy" if it can achieve "better economics."
"Dragon Tattoo," distributed by Sony, generated more than $230 million worldwide, but not enough to pay back MGM for its investment. The movie carried a $100 million production budget.
“While this is a solid result, it is below our expectations and we booked a modest loss," CEO Gary Barber said during a conference call with investors.
The studio has an option to co-finance film adaptations of the next two books in the series. MGM said it expects to turn a profit on last weekend's "21 Jump Street" and that it has an option to participate in the sequel that Sony is developing.
Barber positioned last year as a strong one for MGM, which emerged from bankruptcy in December 2010. In 2011, MGM reported operating income of $79 million and revenue of $699 million, studio executives said.
MGM also said it has ended the United Artists joint venture launched in 2006. Tom Cruise and his producing partner Paula Wagner purchased a stake in the studio under the venture.
MGM retained a substantial interest in UA, which only produced two movies, "Lions for Lambs" and "Valkyrie" through the venture. Both films disappointed at the box office and Wagner left as CEO of United Artists in 2008.
During much of that period, MGM labored under its own financial difficulties. After failing to attract a buyer and burdened with some $4 billion in debt, the studio announced in 2010 that it would undergo a prepackaged bankruptcy.
After MGM emerged from Chapter 11, Spyglass Entertainment chiefs Barber and Roger Birnbaum were named co-CEOs of the studio and have set up co-financing deals for their "Hobbit" and James Bond franchises with the likes of Warner Bros. and Sony.
MGM is a privately held company, but has taken the unusual step of publicly disclosing its financial results to stock holders.
The Los Angeles Times first reported that MGM has regained control of United Artists.
