MGM strikes deal, continues with The Hobbit

Last week we reported that the financial troubles at MGM were throwing a spanner in the works for both The Hobbit and James Bond movies. These would have been small spanners for moviegoers, given that both franchises would easily (but not necessarily quickly) find homes elsewhere should the studio hit the buffers, but major spanners for MGM, whose slate is heavily reliant on them. No Bond, no Hobbit, quite possibly no business (although there's always Pink Panther 3. Ahem.)

Well, courtesy of some financial jiggery-pokery in the form of an agreement to defer interest payments on its sizeable debt, MGM has been given the green light to continue its stake in the two Hobbit movies. The studio has 50% of the rights to the project (as well as, inevitably, the bill), with the other half held by New Line (which, in turn, is fully owned by Warner Bros), and this clears any uncertainty about the now in pre-production project. It's bought MGM a stay of execution for the short to medium term at least, although the longer term prospects for the business may be reliant on Middle Earth holding the same kind of appeal it did at the front of the decade.

Guillermo del Toro is directing the two Hobbit films, of course, with the first set for release at the end of 2011. We're hoping to find out the identity of who's playing Bilbo Baggins in the film pretty soon, too...