HARD SELL; MGM PROSPECTUS DETAILS STUDIO'S FINANCIAL MISSTEPS.

Byline: Michael White Associated Press

Metro-Goldwyn-Mayer Inc. has lost more than $1 billion since 1994, hasn't turned a profit since 1988 and probably won't for several more years, the studio said in documents filed for a stock sale.

The prospectus offers the first detailed glimpse into the finances and workings of the privately held studio that produced such landmark films as ``Gone with the Wind'' before a series of disastrous deals in the 1980s and early 1990s.

Those details include a $14 million bonus paid to MGM Chairman Frank Mancuso when the French bank Credit Lyonnais sold the studio to billionaire Kirk Kerkorian and Australian media magnate Kerry Stokes in October.

The prospectus was filed Thursday with the Securities and Exchange Commission, where it will undergo a 20-day review period, after which the stock offering can actually be made. MGM spokesman Craig Parsons said that probably would occur sometime in mid-October.

MGM hopes to raise $232.5 million with the IPO to reduce debt of about $800 million and help revive its once thriving film business.

``It's not going to be an easy sell,'' said Arthur Rockwell, a movie-industry analyst for Yaeger Capital Markets in Los Angeles.

Not withstanding the gloomy earnings forecast, the studio has strengths that will appeal to investors who aren't looking for a quick return, he said.

One is the credibility of Mancuso, who stayed on as chairman, and Kerkorian and Stokes, owner of the Australian media company Seven Network Ltd. Investors also will be looking at the potential of MGM's 4,000-film library for sales to broadcast, satellite and cable television networks.

Kerkorian, whose holdings include the immense MGM Grand hotel in Las Vegas, owns 69 percent of the company's stock and Stokes 31 percent, the prospectus said. Mancuso led Paramount Studios before moving to MGM in 1993.

In the prospectus, the company said it suffered a net loss of $744 million during the 1996 calendar year, $169 million in 1995 and $171 during 1994.

The 1996 loss was attributed in part to an inability to produce new movies from Jan. 1, when Credit Lyonnais announced its plans to sell the studio, and October, when Kerkorian, 80, and Stokes, 56, agreed to buy it.

``This curtailment of operations has adversely affected revenues . . . and will continue to so do for the next three years,'' the prospectus said.

Mancuso's $14 million bonus was in addition to $2.7 million in salary and $3 million in stock payments that require him to buy at $1,000 per share. Mancuso, 64, is under contract to run the studio for five years.

In the coming months, MGM will release only two films expected to have wide audience appeal. ``The Red Corner,'' starring Richard Gere, is set to debut Nov. 25 and ``Tomorrow Never Dies,'' starring Pierce Brosnan as James Bond is set to debut on Dec. 19.

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Photo

Photo: (color) Kirk Kerkorian

Invested heavily in MGM