LOS ANGELES — In Metro-Goldwyn-Mayer Inc.'s newest movie, "Hot Tub Time Machine," a main character looks around a leg-warmer-dotted ski slope and asks "Is there some kind of retro thing going on this weekend?"
There certainly is at the studio. MGM is dialing back to its past as it prepares to be sold yet again and is stressing the value of its film archive as a major asset.
Six companies made nonbinding bids in January for MGM, which owns the rights to 4,100 movies and TV shows and has a stake in future James Bond and "The Hobbit" films. Now MGM is preparing to receive binding acquisition offers Friday.
It is unclear how many suitors are still in the running, but Time Warner Inc., Lions Gate Entertainment Corp. and billionaire Len Blavatnik's Access Industries are expected to make bids.
None are expected to be more than $2 billion. That would be bitter for about 140 lenders that financed the purchase of MGM for $5 billion in 2005 and now essentially control the company. Equity holders in MGM, such as Sony Corp. and Comcast Corp., have already written off their investments.
If the bids are too low, then the lenders could consider the process a "busted auction" and try to get a better return from sending MGM to bankruptcy court.
Spokesmen for Time Warner and Access Industries declined to comment. Michael Burns, Lions Gate's vice chairman, said in an interview last week that his niche movie studio was interested in MGM, but not at any price.
"We're not giant fans of betting the ranch on anything," he said. "We are not known to pay retail."
MGM, known for its roaring lion and classics such as "The Wizard of Oz," has been sold several times since its founding in 1924. The latest sale came at the height of a Hollywood bubble, when Sony, Comcast and several private equity firms took on $3.7 billion in debt and a $250 million credit line with JPMorgan Chase & Co. to take MGM from a group that included billionaire Kirk Kerkorian.
The buyers believed that MGM's library of movies and TV shows would throw off enough cash to help pay down debts. Future projects looked promising, including sequels to the James Bond and the Pink Panther franchises.
But with the decline of the DVD market, and a lack of regular hits, MGM's library is worth far less now, and cash flow has been inadequate to support the debt load. Production slowed to a crawl.
Restructuring expert Stephen Cooper was hired as a top executive in August and got MGM's 140 lenders to allow the company to skip interest payments beginning in September. That forbearance agreement, which frees up enough cash so the company can release a modest slate of films this year, lasts until March 31.
MGM doesn't have the only movie library up for sale. The Walt Disney Co. is looking to shed its Miramax Films division, while Liberty Media Corp., controlled by media mogul John Malone, is looking at strategic options for its Overture Films unit.
The situation reflects the tough state of Hollywood economics: While mega-budget films like "Avatar" have broken box office records, the record of middle-budget dramas and comedies has been hit-or-miss for several studios.
"It's a hard business," Liberty CEO Greg Maffei told analysts at a conference last week. Despite a string of recent hits from Overture, including horror flick "The Crazies," "we had probably less success than we would certainly hope," he said.
Several bidders have dropped out of the MGM bidding after an initial kick at the tires, including Summit Entertainment LLC, the studio behind the "Twilight" franchise.
News Corp., the owner of the 20th Century Fox studio, which backed "Avatar," made a one-page proposal in January to provide an unspecified amount of cash to help MGM operate independently and restructure its debt, but didn't get a formal response. The offer valued MGM at $1.5 billion, said a person familiar with the offer who spoke on condition of anonymity because the bids are meant to be confidential.
A private equity firm, Qualia Capital LLC, also offered to provide $500 million in cash to keep MGM operating while it restructured its debt. But the proposal is taking a back seat as MGM prepares to review straight bids to acquire control.