The beginningThe name is taken from the three companies that formed a merger to create MGM Studios in 1924; Metro Picture Corporation (formed in 1915), Goldwyn Picture Corporation (1917), and Louis B. Mayer Pictures (1918), under the control of movie theater magnate Marcus Loew. Louis B. Mayer became the studio boss, and Irving Thalberg, the "Boy Wonder", was head of production. They took on the motto Ars Gratia Artis (Art for Art's Sake) and their trademark lion, "Leo" in 1928 (who had been born in captivity in Dublin Zoo in Ireland).
Not long after this merger, Loew died, leaving control of the studios to his associate Nicholas Schenck; Schenck then attempted to sell the properties to what would later become 20th Century Fox, but was unsuccessful. Mayer was quite displeased with this, and tensions between him and Schenck would be delicate from this point onward.
MGM's golden ageFor many years, the MGM Lion was the live-action mascot for MGM, appearing in the opening logo sequence to every movie produced by the studio. A cartoon version of the MGM Lion appears in the Tom and Jerry theatrical animated cartoon Jerry and the Lion.
Under Mayer's and Thalberg's management, MGM Studios became the largest film company in Hollywood (although they were actually located in Culver City) by the mid-1930s. In this era, they produced a number of classic films including Grand Hotel and the Tarzan series, and made stars out of Greta Garbo, Joan Crawford and others. Thalberg was removed from his position as head of production in 1932, after disputes with Mayer and Schenck, and subsequently suffering a heart attack; at that point, Mayer started bringing in independent producers (notably David O. Selznick) to cover the studio's output. When Thalberg returned the next year, he was reduced to nothing more than a unit producer.
After Thalberg's death in 1936, Mayer had full control of the day-to-day production duties of the studio and MGM's output progressed from the literary works Thalberg had preferred to the crowd-pleasers Mayer preferred. Between 1936 and the start of World War II, MGM produced a number of now-classic films such as Gone With the Wind and The Wizard of Oz. During the war, MGM threw itself head-first into war support; many MGM stars helped sell war bonds and performed at United Service Organizations shows; and a few MGM personnel (notably James Stewart and Clark Gable) enlisted.
During this time, MGM also became involved in the animation business. Their animation department started in the late 1930s, when Hugh Harman and Rudolph Ising came over from Warner Bros. Later on, MGM became home to Tex Avery (who joined them in 1941 after a dispute with Warners producer Leon Schlesinger). Tex produced a number of famous shorts at MGM, including Red-Hot Riding Hood, Swing Shift Cinderella, and the Droopy series. MGM's biggest cartoon stars, however, were the cat-and-mouse duo of Tom and Jerry whom were created by William Hanna and Joseph Barbera. Tom and Jerry won several Oscars and nominations.
After the war, MGM underwent a sea change, and started primarily producing musicals. Most of the great stars of song and dance worked for MGM at the time, including Judy Garland, Fred Astaire, Gene Kelly, and Frank Sinatra. Many of these musicals were successes, but by 1948, the studio was being hit by cost overruns (stemming from the huge budgets given to every picture, even the lackluster ones), and the mismanagement was causing a noticeable drop in quality. No MGM productions won Oscars between 1946 and 1948. This caused the old feud between Mayer and Schenck to flare up; it seemed Mayer was spending more time tending to his herd of thoroughbred race horses than the day-to-day operations of the studio. Schenck ordered Mayer to sell the horses, bring costs under control once again, and hire a "new Thalberg."
Writer and producer Dore Schary was hired for this job, and almost immediately the conflicts began. Mayer's taste for wholesomeness and "beautiful" movies went completely against Schary's desire for message pictures and gritty realism. In August 1951, after having sparred with Schary over several of his pet projects, Mayer was fed up; he called the head office and said, "It's either him, or me." Jumping at the chance to fire his archrival, Schenck picked Schary, ousting Mayer from the post he'd held for 27 years. An embittered Mayer later attempted an unsuccessful corporate takeover of the studio, but mainly stayed out of the public eye until his death in 1957.
Despite the chaos, MGM was able to keep the studio running through the early 1950s. Under Schary's watch, MGM produced some of their best-regarded musicals: An American in Paris, Singin' in the Rain and Show Boat. MGM also started releasing movies in the CinemaScope format (licensed from 20th Century Fox) to compete with the up and coming television phenomenon. However, MGM also lost one of their biggest stars when they released Judy Garland from her contract in 1950. As time went on, MGM would eventually let all of their contract actors go, in order to meet Schenck's demands to reduce expenses.
The lion loses its roarAs the studio system faded in the late 1950s and 1960s, so did MGM's prestige. In 1957 (by coincidence, the year when Louis B. Mayer passed away), the studio lost money for the first time; just prior to this, in the fall of 1956, the burgeoning production costs of Raintree County prompted the studio to release Schary from his contract. Schary's reign at MGM had been marked with few bona fide hits, and his departure (along with the retirement of Schenck in 1955) left a power vacuum that would prove difficult to fill.
By then, television had gone from a passing fad to a genuine part of American life, and MGM decided it was better to join the crowd than wait it out any longer. While MGM's first attempts at TV programming were inauspicious (M-G-M Parade), later shows (such as The Thin Man, The Courtship of Eddie's Father, both based on movies, and especially CHiPs) performed better.
1957 also marked the end of the classic cartoon era at MGM when the MGM brass shuttered the unit. Hanna and Barbera left to found their own company, Hanna-Barbera Productions, and production of Tom and Jerry shorts was outsourced, first to a Eastern European-based unit led by Gene Deitch, and then to Chuck Jones's "Sib Tower 12 Productions". Jones' group also produced their own works, winning an Oscar for a cartoon version of The Dot and the Line, as well as producing the classic TV Christmas special How the Grinch Stole Christmas! (with Theodore Geisel). Jones' association with MGM ended in 1967.
In 1959, after fighting the Paramount decrees for over a decade, Loew's was forced to divest itself of MGM, and in the process, many of Loew's theaters were shuttered or sold to independent owners. MGM bet the company's future on a remake of Ben-Hur, which nearly bankrupted the studio. Gigi (released the previous year and considered the last of MGM's major musicals) and Ben-Hur were some of MGM's biggest hits ever, but they would not be a panacea; MGM was still very much in trouble, and for the next ten years, many businessmen would move through MGM's upper management, attempting to bring the studio's glory days back. Most of MGM's output during this time was uninspired, consisting mainly of more remakes of their classic films (few of which matched Ben-Hur's quality or popularity), though they did manage to release a few well-considered films such as Doctor Zhivago and 2001: A Space Odyssey.
Kerkorian takes overThe firm was purchased (some say raided) by Nevada millionaire Kirk Kerkorian in 1969. He downsized the company under president James T. Aubrey, Jr. and sold off massive amounts of historical memorabilia, including Dorothy's red slippers (from The Wizard of Oz), and several acres of MGM's backlots (which were razed to build houses).
Through the 1970s the studio output slowed considerably; Kerkorian sold MGM's distribution system in 1973, and gradually distanced himself from the daily operation of the studio. Despite the decline, the studio did manage to release a few well-remembered films, such as Shaft, Logan's Run, and Fame. In 1974, the studio sold off much of its original studio property, including its famous backlot, to real estate developers. The last project to be shot on the backlot were the star-studded introduction segments for That's Entertainment! a retrospective documentary that became a huge hit for the studio, spawning two sequels over the next 20 years.
In 1979, Kerkorian issued a statement claiming that MGM was now primarily a hotel company; however, he also managed to expand the overall film library and production system with the purchase of United Artists in 1981, forming MGM/UA. However, big plans to bring MGM back to its original glory were not to be, despite the hiring of David Begelman, the beleagured Columbia Pictures executive.
MGM/UA, Turner and PatheIn 1986, Kerkorian sold the combined MGM/UA to Ted Turner. Under pressure from the crushing debt load of the studios (in particular UA, which was still hurting from the failure of Heaven's Gate), and also concerned that Kerkorian had charged too much for the company, Turner kept ownership of the company for exactly 74 days. To help recoup his investment, he sold all of United Artists and the MGM trademark back to Kerkorian. The studio lot was sold to the TV production firm Lorimar, which in turn, was later acquired by Warner Bros.. In 1990, the lot was sold to Columbia Pictures, in exchange for the half of Warner's lot they'd rented since the 1970s. Turner kept the MGM back catalog, however, which passed on to Warners in 1996.
How much of MGM's back catalogue Turner actually had rights to was a point of conflict for many years; it was eventually decided that Turner owned all of the pre-merger MGM back catalog, including the pre-1948 Warner Bros. Films and shorts that UA had acquired many years earlier for television, as well as 1982-1985 MGM/UA films that were presented as MGM films in the credits.
Also in 1990, the studio was purchased by Italian financier Giancarlo Parretti, owner of Pathé's holdings. Parretti eventually defaulted on the loans he'd used to buy the studio, and his bank, Credit Lyonnais, foreclosed on him in 1992. Lyonnais was unable to stem the tide of red ink during the mid-1990s (despite a few critical and commercial successes), and sold the studio back to Kerkorian (as part of a group composed of his Tracinda company and the Australian Seven Network) in 1996.
1997-presentIn 1997, MGM purchased Metromedia's studio properties (Orion Pictures, Goldwyn Entertainment, and the Motion Picture Corporation of America), further enlarging their movie back catalog. Since then, MGM has had a few theatrical hits (such as the later James Bond films, Legally Blonde and Barbershop), and some costly flops (such as a remake of the 1975 UA film Rollerball) but also has had some success releasing its now-gigantic library of films to home video.
In late 2003, some of MGM's competitors started to make bids to buy the studio. The James Bond franchise and the back catalog have been cited as the primary interests. The first suitor was Time Warner, who negotiated with MGM for a short period in early 2004 unsuccessfully. After this, Sony (representing its Sony Pictures unit) entered a bid to buy the studio, along with venture capital groups Texas Pacific Group and Providence Equity Partners, and for a time they were in exclusive negotiations. Later on, Time Warner made a counter-bid (which Ted Turner reportedly tried to block), and as of September 1, Time Warner was considered the leading candidate.
On September 13, 2004, Sony increased its bid of $11.25/share (roughly $4.7 billion) to $12/share ($5 billion), and Time Warner subsequently withdrew its bid of $11/share ($4.5 billion). MGM and Sony agreed on a purchase price of nearly $5 billion, which includes roughly $2 billion in MGM debt.
MGM was one of the last independent major U.S. studio to be sold. Now only Dreamworks remains independent of a larger parent. (Not withstanding Disney, which has never been acquired, but it has tranformed into a conglomerate.) As of 2004, Lions Gate Films, Newmarket Films, and Dreamworks made more than MGM (both Lions Gate and Newmarket are independent studios).