MGM/UA Distribution Co.

1980s

On August 7, 1985, Turner Broadcasting System offered to buy MGM/UA. As film licensing to television became more complicated, Ted Turner saw the value of acquiring MGM's film library for his SuperstationWTBS. Ahead of the merger, MGM/UA Distribution Co. become the newly minted joint venture UA/MGM Distribution Co., which would handle sales and operations of MGM and UA feature films. On March 25 of the following year, the deal was finalized in a cash-stock deal for $1.5 billion, and the company was renamed "MGM Entertainment Co.". Turner immediately sold MGM's UA subsidiary and film library back to Kerkorian for roughly $480 million. However, Turner was unable to find financing for the rest of the deal because of concerns in the financial community over the debt-load of his companies; thus, on August 26, 1986, Turner was forced to sell MGM's production and distribution assets to UA for $300 million. The MGM studio lot and lab facilities were sold to Lorimar-Telepictures. Lorimar-Telepictures would later sell the Metrocolor facilities, Metrocolor Film Laboratory (aka MGM Laboratory) to Technicolor for $60 million. Turner retained the pre-May 1986 library of MGM films, along with the RKO Radio Pictures and pre-1950 Warner Bros. Pictures films which UA had previously purchased.