There’s nothing quite like the feeling when you get out of a screening and see the word “SHOCKER!” on Deadline, signaling the rolling of someone or other’s head. This time, the headline bell tolled for MGM CEO Gary Barber, who by all accounts was blindsided by his firing, given that he has done an impressive job of rescuing the studio from its darkest days.
I don’t know how anyone could argue with the job Barber has done with MGM, turning the company around and saving the storied brand from the brink of extinction. His track record over the past eight years, which features the kinds of mid-budget films that studios rarely make anymore, speaks for itself. He relaunched Orion Pictures, led the company’s $1 billion acquisition of Epix, cut costs across divisions, and squeezed every penny possible out of MGM’s library with the help of streaming platforms that were hungry for content. But despite the film studio’s relative success, the revenue, evidently, has not keep pace with that of MGM TV, run by Mark Burnett.
Burnett’s long-running hits Survivor and The Voice are huge moneymakers for MGM, which has a stake in those shows directly because of Barber’s relationship with Burnett. And yet, apparently it was this growing friction between the two that led Burnett to turn to Kevin Ulrich, the Chairman of MGM’s Board of Directors.
Now, Ulrich is a hedge fund guy whose investment firm Anchorage Capital Group owns 34 percent of MGM, making it the majority owner. Ulrich is said to have once had a strong relationship with Barber, who is known as a consistently reliable executive. However, Ulrich’s relationship with Barber had begun to fray, according to media reports, due to a disagreement regarding the longterm future of MGM. Barber had spent his tenure tidying up the company in preparation for a potential sale, while Ulrich was resistant to that idea, envisioning MGM as a growing empire more than a company on the block as an acquisition target. So where does Burnett fit into this? Well, since he’s so rich he doesn’t need to reap the benefits of an immediately sale, he’s said to have taken advantage of that rift, ultimately convincing Ulrich to turn on Barber, and that a better alternative was out there in Executive Land.
Of course, there was more to it than the question of a future sale. In a media landscape that has been consolidating month after month, Ulrich didn’t want MGM to be seen as prey for a corporate takeover. Barber is well known for being conservative with MGM’s budgets and he had been bringing in steady profits, but in the end they weren’t big enough for Ulrich, who has a “go big or go home” attitude with regards to MGM.
Another thing that Barber and Ulrich reportedly disagreed on was the fate of Epix, which has been a steady earner for MGM. Barber believed Epix would make a strong OTT platform, which could prove to be valuable in the future. Ulrich, however, was pleased with the company’s stock and didn’t want to shake things up on the Epix front. In fact, it was because the stock was so high that Barber thought it was the right time for an MGM sale. Ironically, while Barber was lobbying for a sale, it’s worth wondering whether he was the very thing holding one back — and whether one will move forward now that he’s gone.
The situation ultimately came to a head on Monday night, with the board voting to fire Barber from the top slot at MGM. Now, the board is completely within its right to cut Barber loose if they disagree about the direction of the company, and I could understand the move if the board had a backup plan, but as of this writing, MGM is still without a leader, leaving it vulnerable. So, who is left to run the studio?
Well, for starters, there’s Burnett, MGM’s hit-making President of TV and Digital, as well as its Motion Picture Group chairman Jonathan Glickman, the latter of whom knows the ins and outs of the company as well as anyone, but look for Ulrich to hire a new CEO from outside the studio.
For now, MGM’s board has formed an Office of the CEO to oversee day-to-day operations, and this group of senior executives and division heads will report directly to the board, which includes current and former executives from Disney, Pixar, Paramount, CBS, Viacom, Microsoft/Xbox and Google. Of course, there are also rumblings that Ulrich is looking to become more “hands-on” with MGM, which begs the question — was this simply the case of a hedge fund manager getting bored in New York and deciding to play with his glamorous Hollywood toy?
It’s actually a pretty good time to be MGM right now, as the company’s TV division is involved in Hulu’s Emmy-winning series The Handmaid’s Tale, and Danny Boyle and John Hodge are currently writing Daniel Craig’s last James Bond movie while MGM searches for a studio to partner with on the international release.
What’s even crazier about this fiasco is that MGM just signed Barber to a five-year extension (which you’d think was in preparation for a possible sale) five months ago, so now they have to pay him out. He becomes instant dead weight on the company’s books, which is the whole reason they turned to him in the first place — to get the studio back on track financially. And despite doing just that, Barber’s exit was announced under the cover of darkness, long after most reporters went home for the evening on Monday. For his part, Ulrich credited Barber with laying an “important foundation” for MGM, saying he was excited for the “promising opportunities” that lie ahead for the company.
Barber took the high road on his way out of MGM, leaving with a solid reputation as a corporate repairman, while MGM is left looking a little cold. Decisive, but cold. But hey, that’s business… especially in Hollywood.
Jeff Sneider | Editor in Chief