MGM Adds Cable-Ready Film Titles

Acquiring programming it can use for a branded cable
network, Metro-Goldwyn-Mayer Inc. has obtained the broadcast rights to more than 800 films
-- the old MGM-United Artists library that Turner Broadcasting System Inc. has been
licensing -- officials said last week.

Under the deal, MGM will get back the exclusive TV rights
for 200 of the titles. In addition, it will share the rights to the remaining 600
theatricals in the library with Turner, which can continue airing the films on TBS
Superstation and Turner Network Television.

MGM can run those films -- which include West Side Story
and Annie Hall -- on a MGM owned-and-operated cable network starting as early
as September 2000.

"We renegotiated and greatly expanded this
agreement," said Bob Levi, president of worldwide program planning and acquisitions
for Turner Entertainment Group. "It's a win-win for both of us."

MGM officials couldn't be reached for comment last week.
But there are many caveats in terms of what kind of cable network MGM can air the movies
on, sources said.

MGM can only use the MGM-UA library films for a
premium-cable service that's not ad-supported and that isn't pre-existing. In addition,
the network must be wholly owned and operated by MGM.

In other words, MGM reportedly couldn't bring in a partner
-- such as Cablevision Systems Corp.'s Rainbow Media Holdings Inc. or Encore Media Group
LLC, which it has talked to about potential deals -- on any cable channel where the movies
will air.

In a prepared statement, MGM chairman Alex Yemenidjian
said, "This transaction underscores the new MGM's determination to reclaim control of
its enormous collection of film assets and the momentum under way in shaping our cable-
and satellite-network alternatives."

MGM is in the process of doing a road show for its planned
equity offering, which seeks to raise $750 million. With funds from that secondary
offering, the company plans to launch branded cable networks.

No cash was exchanged in last week's MGM-UA library deal.

Turner has been airing movies from the MGM-UA library --
only 30 of which are MGM films, with the rest coming from UA -- on TBS and TNT.

As part of last week's pact, Turner will get an extension
of up to two years on its original agreement for the library -- a deal that was done in
1990 -- Levi said. As a result, Turner has the rights to some of those movies until as
late as 2009.

In addition, Turner acquired the rights for 600 features
for its Turner Classic Movies, with increased available runs and terms. As a caveat of the
agreement, TCM arranged to get an 18-month exclusive window on 50 of those films.