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Is James Bond Worth $1 Billion?


How much is 007 worth? That's a key question for Sony (SNE) and Time Warner (TWX) as they sic their number crunchers on Metro-Goldwyn-Mayer (MGM), which controls the James Bond franchise -- and is on the block. The British secret agent has sold $3.7 billion in tickets since Sean Connery donned the tuxedo and eyeballed the first Bond Girl in 1962's Dr. No. But can Bond stay as daring, dashing, and -- of course -- profitable as always?

From the prices being batted around, MGM owner Kirk Kerkorian should get $4.6 billion to $4.8 billion for the famed studio. There's little debate over the value of MGM's 4,000-film library, which includes The Pink Panther, Rocky, and the 20 Bond flicks. It earns an estimated $450 million a year. That would make the library worth $3.6 billion, based on the standard formula of eight times cash flow for libraries. And that means Bond accounts for most of the remainder of MGM's value.

But is 007 really worth $1 billion? Douglas L. Lowell, a longtime industry analyst, puts the franchise at $623 million. That includes the windfall each time a new Bond film arrives in theaters and the older flicks -- all 20 of them -- are repackaged as DVDs that generate $25 million to $50 million a year. Hollywood veteran Amir J. Malin figures that the next four Bonds alone are worth $500 million, based on a profit of at least $125 million per release. But if the winner of the MGM derby can keep the franchise going strong, he guesses it's a $1 billion property.

From such differences, deals sometimes crater. The 87-year-old Kerkorian may decide to take MGM off the market -- he has done it before -- but there are hints a deal could come this month. MGM declined to comment.

So how might Sony or Time Warner justify $1 billion for Bond? Perhaps by taking more steps to focus the franchise on younger moviegoers, as MGM has done by making Bond videos for MTV. The latest Bond, 2002's Die Another Day, grossed $413.9 million, but that doesn't match the hotter franchises Hollywood is building, such as Spider-Man. A new owner might try a cutting-edge director such as Kill Bill's Quentin Tarantino, who says he wants to remake the farcical 1967 Casino Royale.

The current Bond, 51-year-old Pierce Brosnan, has said he may soon turn in his license to kill. X-Men's Hugh Jackman and Pirates of the Caribbean's Orlando Bloom are possible successors. As MGM did by getting Brosnan in 1995, the right blend of actor, director -- and maybe a little more skin -- could well make Bond a $1 billion man. Doubtless, he's still got a lot of bad guys left to battle.

By Ronald Grover in Los Angeles


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