After Metro-Goldwyn-Mayer Studios' exit from bankruptcy a decade ago, the storied film and television company made strides toward regaining its status as a Hollywood player.
But growing questions loom about the direction of the Beverly Hills-based studio with the roaring lion logo.
The company, known for the Rocky and James Bond movies, has faced disagreement among investors over whether to sell, according to people familiar with the matter who requested anonymity out of fear of reprisals.
Some worry the studio missed opportunities for a lucrative exit for shareholders by not selling to a Chinese company or tech giant and is now in a difficult position due to the COVID-19 pandemic that shut down movie theaters, closed film sets and triggered industrywide layoffs.
In a significant blow, MGM last month postponed the 007 film "No Time to Die" from this month until Easter weekend. The risk of further delays to MGM's slate and its large debt load led S&P Global Ratings last month to downgrade the company's credit rating to B from B+.
"They obviously have a good library of content that they can sell to different content consumers," said S&P analyst David Snowden. "But this is a small, independent movie studio with volatile revenues."
Many challenges MGM faces are shared by other midsize studios. Analysts expect it to become more difficult for MGM to compete as an independent entity as larger companies, such as Walt Disney Co. and Comcast's NBCUniversal, grow through streaming.
"It's hard to imagine any of the smaller studios being stand-alone over the next several years," said LightShed Partners media analyst Rich Greenfield.
Much of the investor tension has centered on the chairman of MGM's board, Kevin Ulrich, who is chief executive of investment firm Anchorage Capital Group, the studio's leading shareholder.
Some investors who want to sell think Ulrich, who cofounded Anchorage in 2003, has become too enamored with the entertainment industry, said people close to the company who were not authorized to comment. Others believe Ulrich is simply holding out for a higher valuation. The Wall Street Journal earlier reported investor pressure on MGM.