Advanced Television

Chellomedia scoops international MGM Networks

August 2, 2012

Metro-Goldwyn-Mayer Studios (MGM) and Chellomedia, the international content division of Liberty Global, have agreed a deal in which Chellomedia has acquired MGM Networks Inc (MGM Networks). MGM will retain its network businesses in US, Canada, UK, Germany and its joint venture interests in Brazil and Australia.

The acquisition gives Chellomedia ownership of MGM Networks’ channels in Spain, Turkey, Israel, Benelux and Poland, India and South East Asia, along with the pan-EMEA Channel and its associated feeds. In addition, Chellomedia has acquired the remaining 50 per cent of MGM Latin America, which Liberty Global and MGM have operated as a joint venture since 1998, as well as the balance of its JV in Central Europe.

Chellomedia will continue to operate the channels under the MGM brand. In addition, Chellomedia has entered into a long term programming licensing agreement with MGM to allow the channels to continue to be programmed from MGM’s programming library, which includes classics such as Rob Roy , Rain Man, Silence of the Lambs, All Quiet on the Western Front, When Harry met Sally, Misery, Dirty Rotten Scoundrels, Gorky Park, Four Weddings and A Funeral, Thelma and Louise, and The Madness of King George.

Chellomedia says the acquisition will strengthen its position as a leading producer and distributor of television channels. Chellomedia currently produces and distributes 56 channels, including 19 joint ventures. The MGM Networks transaction, which includes 13 channels, feeds and a JV, will increase the footprint of Chellomedia’s channel portfolio to 382 million TV households.

Niall Curran, the President of Chellomedia, described the MGM channels as “superb assets with a great brand” which fitted extremely well within its existing channel portfolio. “We see lots of scope to enhance the movie lover’s experience through choice and control and look forward to working with operators around the world to develop this much loved classic movie channel for a TV on demand world,” he added.

“Chellomedia has the scale to bring the MGM Networks business to a new level and we are excited to continue our relationship with this platinum standard partner,” said Roma Khanna, MGM’s President, Television Group and Digital. “MGM is not exiting the channel business completely. We are instead shifting our channel focus to the territories of the US, Canada, UK and Germany along with our joint venture territories of Brazil and Australia. We will continue to grow our global television licensing strategy to generate increased revenue and cash flow from our library and new product, while developing new strategic options within former channel territories and unlocking shareholder value through the gain recognized by the asset sale.”

Billionaire investor Carl Icahn July 31 agreed to sell his 25 per cent stake in Metro-Goldwyn-Meyer back to the movie studio in a $589.6 million deal that clears the way for MGM’s owners to proceed with a planned initial public offering.

The deal allows MGM Holdings, the consortium of private investors backing MGM, to set a $2.4 billion market price for the studio that it could use to either sell the company to a strategic investor or take it public, according to reports.

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