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MGM and Fox Form International Distribution and Strategic Alliance.

SANTA MONICA, Calif.--(BUSINESS WIRE)--

Metro-Goldwyn-Mayer Inc. (NYSE:MGM) and Fox Filmed Entertainment announced today a far-reaching agreement to forge a strategic alliance under which Fox will provide distribution services for MGM theatrical, video, and DVD product internationally. MGM and Fox also have agreed to jointly explore cable and satellite distribution ventures worldwide.

Alex Yemenidjian, MGM Chairman and Chief Executive Officer, said, "This is a milestone for MGM. We have clearly charted a compelling strategic advantage by combining MGM's unparalleled library with Fox's international distribution assets. In addition, our operating performance and cash flow will benefit significantly once the new distribution agreements are in effect."

Commented Peter Chernin, President and COO of Fox Entertainment Group and News Corporation: "We are delighted to form this strategic alliance with MGM and firmly believe this agreement will take both companies into exciting new areas over the next few years."

Chris McGurk, MGM Vice Chairman and Chief Operating Officer, added, "With these distribution agreements, MGM has achieved one of its most important strategic goals. Now that we have regained full control of our library, we have partnered with the world's finest international marketing and distribution organization to facilitate the growth of MGM's film and video product sales globally. MGM now can fully realize the global potential of its unparalleled collection of films by penetrating what we believe are previously underserved markets and by building even greater demand for its world-class brand."

Commented Bill Mechanic, Chairman and CEO of Fox Filmed Entertainment: "Over the past few years, Fox has distinguished itself internationally, and this deal recognizes that fact. We are particularly pleased to be a part of MGM's bright new future with Alex and Chris and, in video, a part of its illustrious past."

Under the terms of the video agreement, Twentieth Century Fox Home Entertainment will facilitate the distribution of MGM video and DVD titles across all territories outside of the U.S. and Canada, effective February 1, 2000 (following the expiration of MGM's existing transitional distribution agreement with Warner Home Video). The film distribution agreement calls for Fox Filmed Entertainment to distribute MGM films outside of the U.S. and Canada following the expiration of MGM's arrangement with United International Pictures B.V. (UIP), currently scheduled to expire on November 1, 2000. Both the video and theatrical agreements run through January 31, 2003, with provisions for extension beyond that date. MGM will maintain full control of all release dates and schedules, sales, marketing, manufacturing, and other commercial aspects related to international video and theatrical distribution.

"These agreements afford us the opportunity to participate in a meaningful way in managing and marketing our product," McGurk concluded.

Fox Filmed Entertainment is a unit of Fox Entertainment Group. Fox Entertainment Group, Inc. (NYSE:FOX) is principally engaged in the development, production, and worldwide distribution of feature films and television programs, television broadcasting, and cable network programming with total assets as of December 31, 1998 of approximately US$14.1 billion and total annual revenues of approximately US$7 billion. The Company's studios, production facilities, and film and television library provide high-quality creative content, and the Company's broadcasting and cable networks provide extensive distribution platforms for the Company's programs.

With over 5,000 titles, MGM's film library is the largest and most modern in the world, consisting of United Artists and current Metro-Goldwyn-Mayer theatrical releases, as well as titles from Orion, Goldwyn, and PolyGram libraries. It includes more post-1948 titles than all other film libraries combined, including the entire 20-film James Bond franchise, such offerings as Four Weddings and A Funeral and Fargo, and such classics as The Graduate and When Harry Met Sally. In addition to the movie titles, the MGM library includes more than 8,000 hours of TV programming.

Metro-Goldwyn-Mayer Inc. (NYSE:MGM) is actively engaged in the worldwide production and distribution of entertainment product, including motion pictures, television programming, home video, interactive media, music, licensed merchandise, a library of more than 5,000 films, and a significant television library. The Company's operating units include MGM Pictures, United Artists Pictures, Orion Pictures, MGM Worldwide Television Group, MGM Distribution Co., MGM Home Entertainment and Consumer Products Group, MGM Music, and MGM Interactive, among others. For more information on MGM, visit MGM Online at http://www.mgm.com.

This news release contains forward-looking statements that are based upon the company's estimates and expectations concerning future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. These risks and uncertainties include, among other things, future competitive and market conditions, whether the company's products achieve customer acceptance, future business decisions, and other factors, including those described in the company's filings with the Securities and Exchange Commission, all of which are difficult or impossible to predict accurately and many of which are beyond the control of MGM.
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Publication:Business Wire
Geographic Code:1USA
Date:Jun 21, 1999
Words:812
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