NEW YORK ( TheStreet) -- Metro-Goldwyn-Mayer received better-than-expected first-round bids of between $1.5 billion and $2.5 billion, but short of covering the $3.7 billion the studio owes lenders, a report says.

MGM also has begun to explore how it could stage a streamlined "prepackaged" bankruptcy as part of the auction, the Wall Street Journal reports, citing people with knowledge of the situation.

MGM's current list of potential buyers includes Time Warner ( TWX), Lions Gate Entertainment ( LGF), Summit Entertainment, Liberty Media ( LINTB), News Corp. ( NWS), and India's Reliance ADA , the newspaper reports.

MGM studio is owned by a group including private-equity firms Providence Equity Partners and TPG, and Sony ( SNE) and Comcast ( CMCSA), which acquired the studio in a $5 billion deal that closed in 2005.

MGM, which owns a movie library with about 4,000 titles, has begun evaluating the bids and could start providing more information to serious contenders in the near future, people familiar with the matter said, the Journal reports.

-- Written by Joseph Woelfel in New York.

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