MGM Grand exec makes move

Alex Yemenidjian is extending his reign from the City of Entertainment to the world of entertainment.

Yemenidjian, president of Las Vegas-based casino giant MGM Grand Inc., was named chairman and chief executive of the Metro-Goldwyn-Mayer Inc. movie and television conglomerate Tuesday. Both companies are controlled by billionaire investor Kirk Kerkorian.

The announcement came the same day the MGM studios announced a $306.6 million loss for the first quarter, due in part to a $225 million fee paid to regain distribution rights to home-video releases.

By contrast, the MGM Grand gaming company last week reported record earnings, revenue and cash flow for the quarter.

A longtime confidant of Kerkorian, the 43-year-old Yemenidjian will retain his post as president of MGM Grand but move to California to spend more time as the chief executive of the Santa Monica-based MGM. He replaces former MGM Chairman Frank Mancuso, who will remain a director.

Last year, Kerkorian moved his base of operations from Las Vegas to Los Angeles to be closer to the struggling studio operations, which include MGM, United Artists and Orion Pictures, G2 Films and several television, music, distribution, home entertainment and Internet divisions.

Despite the move, Yemenidjian will remain a director and member of the MGM Grand executive committee, as well as the casino company's president.

MGM Grand's executive vice president, Daniel Wade, 46, will fill Yemenidjian's chief operating officer post. Wade is a 25-year veteran of the casino industry and was president and chief operating officer of the MGM Grand Hotel from 1995 until last fall.

"Alex is really not going anywhere," MGM Grand's chief financial officer, Jim Murren, said Tuesday. "He's still the president of our company, still on the board, still in constant contact with all of us.

"As an outsider and ex-securities analyst, I think it's a very positive development for the studio to have someone of that intellect and vision working on behalf of its shareholders.

"It's a good day for MGM Grand, as well," Murren said. "It will be a very seamless shift because Danny Wade has been with the company since 1990 and has a wealth of invaluable experience.

"He developed a great business platform at the hotel, and we stole him for our corporate offices last October. Not only does this exemplify the deep management strength of the company, it also is very motivational to the people here to see the career advancement opportunities that are available."

In reporting its first-quarter results, the MGM studio noted that in addition the the one-time charge for distribution rights, the company posted lower revenue due to less-successful film releases than in the year-earlier period.

However, it said television profits rose and home-video revenue was significantly higher, due largely to a four-fold increase in digital-video-disc (DVD) product sales.

The studio also said it plans a $500 million rights offering to help fund distribution of its film library and production of new movie and television programming.

The MGM film library consists of more than 5,000 titles, including more than half of all the feature films produced by Hollywood studios since 1948, as well as a large library of television shows.

MGM paid $225 million to end its existing video-distribution pact with Warner Home Video early to enable it to regain full control of the video and DVD libraries before the scheduled termination date four years from now.

"With the resolution of the Warner Home Video agreement, the settlement of the James Bond legal action with Sony and the disappointing film performance of the first quarter behind us, we are enthusiastic about MGM's current transition to self distribution in video, the explosive growth the the DVD market and other new technologies that will allow us to effectively leverage MGM's enormous asset -- the largest film library in the world," MGM Chief Financial Officer Daniel Taylor said.

"The name of the game is content," said Murren, Taylor's counterpart at the casino company.

"In this evolving world of technology and mass media, distribution is the tail that's wagging the dog. You have to have content, whose value is constantly rising. And when it comes to content, MGM has few peers."

Murren said the executive roles played by Yemenidjian at both the casino and studio companies don't necessarily portend a merger or further strategic alliances, though he noted both companies share a common legacy.

"At MGM Grand, we also believe entertainment is our birthright. It's a tool we've been given and what we're exploiting to outmarket our competitors.

"As for the studios, they have a game plan they haven't shared with me, but I know Alex is the right guy to implement it.

"And I know from watching Kirk Kerkorian for many years that you can't make any money betting against him. He sees a tremendous value in the studios and a potential that's yet to be tapped."

As part of the transition, MGM Vice Chairman Robert Pisano, 56, who came to the company with Mancuso in 1993, also stepped down.

The entertainment industry publication Daily Variety reported that MGM is trying to lure Universal Pictures President Chris McGurk to join Yemenidjian as vice chairman. Both companies declined to comment.

Yemenidjian has spent the past nine years in key positions with Kerkorian.

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