joyan | Principles & Practices

by Jocelyn Yan

History

Founded in 1998 by co-CEO’s Gary Barber and Roger Birnbaum, Spyglass Entertainment is an American production, finance, and distribution company responsible for blockbusters such as No Strings Attached, 27 Dresses, and The Sixth Sense. European media giants, Kirch Group and Mediaset, invested $250 million to form Spyglass Entertainment. Spyglass is known for co-financing with several other production studios such as Touchstone Pictures and Paramount Studios to produce box-office hits. The company is owned by private equity firm Cerberus Capital Management, which has a significant stake in Spyglass. Spyglass’ headquarters are based in Los Angeles. [1]

When MGM, Metro-Goldwyn-Mayer, filed for bankruptcy on November 3, 2010 due to its inability to pay for its $4 billion in increasing interest payments and debt, the executives of Spyglass presented MGM with a reconstruction plan in exchange for equity stake and management. As a result, co-CEO’s of Spyglass, Gary Barber and Roger Birnbaum took over, becoming co-CEO’s and co-chairs of MGM.[2] Recent reports have shown that Spyglass’ takeover of MGM has indeed led to MGM’s recent profitability and success.[3]

Recent News

July-September 2012

Because of the impending releases of two major blockbusters, Skyfall and The Hobbit, MGM submitted an IPO or Initial Public Offering filing, which allows investors to gauge the value and success of the coming films. Especially significant due to MGM’s post-bankrupt state, this IPO filing attracts interest for potential investors. Looking to go public, MGM has emerged from post-bankruptcy to profitability due to Spyglass’ Gary Barber and Roger Birnbaum’s cutting and different approach towards distribution. Carl Icahn, MGM’s largest investor, sold his 25% stake in MGM in order for MGM to receive a higher IPO value. [4]

October 3, 2012

Spyglass announced that co-CEO Roger Birnbaum stepped down as co-CEO to redirect his energy towards producing. This decision leaves Gary Barber as the sole CEO of Spyglass and MGM. Birnbaum stated, “I have been in the film business a long time, and my greatest passion has always been producing. Now is the time for me to return to what I love to do the most…producing films.” Both Birnbaum and Barber have stated that the decision was “amicable.” Birnbaum chose to stay and exclusively produce with Spyglass and MGM. They look forward to continue sharing success together. [5]

November 2012

The release of the much-anticipated film of the James Bond series, Skyfall directed by Sam Mendes, proved to be a major success. Skyfall earned a staggering $33 million at the box office in its first day, November 9. As expected, Skyfall was also a leading earner at the box office for the Wednesday to Sunday Thanksgiving stretch right behind the number one earner Breaking Dawn 2. During Thanksgiving week, Skyfall grossed $36 million for the 3-day period and $51 million for the total 5-day period. To date, Skyfall has grossed $245 million domestically and $868 million internationally. Overall, Skyfall is the largest grossing James Bond movie in history.[6]

December 2012

Another well-known series based on JRR Tolkien’s fantasy novels is slated for a
successful release on December 14.[7] The first of three films The Hobbit: There and Back Again directed by Peter Jackson has already launched an extensive advertising campaign to promote the trilogy.

The Hobbit trilogy is partnering with New Zealand’s tourism department, Microsoft, and Denny’s to ensure successful box office results. Air New Zealand recently released an inflight safety video that features characters from Tolkien’s novels. Moreover, the
airline painted one of their airplanes with The Hobbit theme and characters greet passengers in New Zealand airports.[8] Microsoft is featuring The Hobbit characters on its Windows Phone platform.[9]

While, Denny’s is using The Hobbit characters to push “Hobbit-inspired” menu items such as Frodo’s Pot Roast Skillet and Build-Your-Own Hobbit Slam.[10] These companies intend to share the publicity and wealth over the impending success of the beginning of the release of The Hobbit trilogy.