MGM studio loss widens

Tuesday, July 27, 1999 | 10:58 a.m.

SANTA MONICA, Calif. -- Metro-Goldwyn-Mayer Inc., owner of one of the world's largest film libraries, said its second-quarter loss widened amid a reorganization aimed at revitalizing the struggling studio.

MGM's loss widened to $249.8 million, or $1.65 a share, from $55 million, or 84 cents, in the year-earlier period. Results from the recent quarter include $225.2 million in previously announced charges for a 5 percent cut in MGM's workforce, the shelving of some film projects, severance expenses for former Chairman Frank Mancuso and other restructuring moves.

The results are the first disclosed under the company's new management team of Chairman Alex Yemenidjian and Vice Chairman Chris McGurk. Since arriving in April, the duo has begun to revamp MGM, seeking to return it to profitability by cutting costs, forming alliances for television distribution of its 5,000-plus library of movies and converting its United Artists unit into a specialty-film division, among other moves.

Both Metro-Goldwyn-Mayer and MGM Grand Inc. of Las Vegas are controlled by billionaire Kirk Kerkorian. He moved Yemenidjian from the profitable casino company, where he is still the president, to the studio company to overhaul that business.