MGM buying Polygram film library for $250 million

Under a tentative agreement with Seagram, a Canadian-based liquor and entertainment conglomerate, MGM will pay $235 million in cash at closing of the deal in January and the remaining $15 million from the cash flow of the library.

The purchase price is well below what Seagram had hoped to receive for the library, according to published reports. Earlier estimates on the deal had put the price at around $400 million. Talks between MGM and Seagram had been under way for some time. Earlier this month MGM said they had broken down.

Seagram acquired the film library as part of its $10.4 billion purchase of Dutch music and entertainment giant PolyGram NV . The library includes such Academy Award-winning films as "Fargo," "Dead Man Walking," "My Left Foot," "The Crying Game" and "Kiss of the Spider Woman." It also includes the Epic library (including "When Harry Met Sally" and "City Slickers"), the Island/Atlantic library (including "Baghdad Cafe") and the Virgin/Palace library (including "Sex, Lies and Videotape").

MGM, which also owns a 6,700-title home video library, produces and distributes entertainment products worldwide, including motion pictures, television programming, home video, interactive media, music and licensed merchandise.

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