It was the stuff of Hollywood legends: Metro-Goldwyn-Mayer was maneuvering into position for an IPO; Craig Parsons had vanished from Pondel Parsons & Wilkinson, a Los Angeles IR firm and a long-time communications consultant to the movie-making giant. Were these events connected? IR star-gazers didn’t have long to wait to find out. Parsons soon resurfaced as MGM’s senior vice president, corporate communications and IR.
‘It was an offer I couldn’t refuse,’ Parsons proclaims in true Tinseltown style. ‘My relationship with MGM has always been at the corporate level, and now those contacts are just down the hall instead of a phone call away.’ And contacts are a commodity Parsons doesn’t lack. After working with so many people during the company’s ‘rebuilding mode’, he knows virtually everybody. The impending IPO was also a big attraction for Parsons, who has a wealth of experience in bringing companies public. Some who know Parsons wonder why he’s going in-house after being his own boss for so long. He candidly notes that being in a service business was like having 35 bosses. ‘After so many years of being a short order cook, going from one crisis to the next, it’s nice to focus on one company and really dig in and understand it.’
Parsons says IR at an entertainment company has a very specialized focus. ‘Like in mining, where the universe of gold bugs is finite, investors either like entertainment stock or they don’t. There’s no in-between. And the reasons for holding the stock can be unusual too – sometimes an entertainment stock has a certain glamor that can even transcend the fundamental financials.’
If ever a stock needed that gloss of glamor it’s MGM. In the early 1990s, the studio fell on hard times under high-flying financier Giancarlo Parretti and was taken over by Credit Lyonnais. Now MGM is being reborn after a year of slow-down due to its sale to US billionaire Kirk Kerkorian and Australian television group Seven Network, and it says it won’t be profitable for at least several years. ‘This is a stock marketed on the basis of futures, not to mention management credibility,’ remarks Parsons.
MGM’s roadshow didn’t start very propitiously when it launched October 27, the beginning of Wall Street’s wild week. But no meetings were canceled, even though investors’ eyes tended to be glazed over.
