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Redstone gets out from under Midway

by on02 December 2008

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Investor Mark Thomas said to be the buyer

Sumner Redstone will be unloading Midway to help ease its credit crunch. Redstone’s 87% controlling interest in Midway is being sold to investor Mark Thomas for a reported $100,000. With the current credit crunch, Redstone has had a difficult time with the over $70 million in debts that Midway owes.

The news that Redstone was able to sell Midway is surprising, even though the company will take a massive loss on the sale. Some believe that Redstone will benefit from the available tax write-offs for the sale of Midway. Redstone is not out of the woods yet, as they are expected to have to work to restructure some of the reported $1.6 billion dollars that the company owes banks for its own debt.

MT Acquisition Holdings LLC, which is Thomas’ holding company, will have a tall order to try to curb the losses at Midway and return the company to profitability. Midway has struggled as of late, but has taken drastic action by closing studios and canceling projects in an effort to stop the bleeding. The fact that Mark Thomas does not have a prior relationship with Midway and apparently has not been involved in the video game market space could also prove a challenge, as well, for him to get the situation at Midway under control.

Midway has had some recent titles that have seemed to suggest that the company might be able to produce new titles that could get things turned around. It will be an uphill battle in a difficult time in the video game business. We predict that the news is not necessary good for Midway, but it is not entirely bad, either. It looks like Midway will at least have one more chance to turn things around, and let’s hope that they are successful in doing so.
Last modified on 02 December 2008
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