Time Warner Inc is evaluating possible new structures to its bid for Metro-Goldwyn-Mayer , as the auction for the studio drags on, sources familiar with the matter said on Friday.

A meeting with MGM's advisors is expected to be sought to talk about ways that the media giant could move forward in the bidding process, one of those sources said.

Time Warner put in a $1.5 billion cash bid in the last round of a long-running auction for MGM, but the studio has told it and rival bidder Access Industries that their bids were too low, a separate source familiar with the situation said.

Lenders to MGM, struggling under $3.7 billion of debt, are pushing for a stand-alone plan, that second source said. That would require $1 billion in financing, including $500 million to make six to eight films a year, sources familiar with the matter said.

The new structures Time Warner are considering proposing could see it modestly increase the amount of its bid, two sources familiar with the situation said. That may not appease creditors -- who had hoped for at least $2 billion, other sources previously told Reuters.

Structures also could include giving MGM a share in the company going forward -- for example, giving them a minority ownership split such as 20 percent, or having some share in the performance of certain assets. MGM's creditors would then have the potential to gain if the company performs well.

Another structure could see Time Warner act as an operating partner with MGM, helping with production and distribution of films, although this could be difficult as it would require operating agreements to be negotiated, those sources said.

Time Warner, MGM and an advisor to MGM's creditors declined to comment.

No decision has yet been made by the media giant on how to structure a new bid, or whether it would be formally made, the sources said.

Time Warner is home to Warner Bros Studios, which owns the Batman and Harry Potter franchises and has one of the world's largest film distribution networks.

Time Warner, MGM and an advisor to MGM's creditors declined to comment.

MGM said in November it was exploring a potential sale of the company. It said at the time its other options included operating as a stand-alone entity or forming strategic partnerships.

Despite a film library that includes the James Bond and Pink Panther franchises, MGM has been struggling to create new hits. It is also trying to cope with plunging DVD sales as consumers move to viewing online. The financial crisis has not helped either.

MGM will likely file for bankruptcy protection either under the stand-alone plan or along with any sale, sources familiar with the process have previously told Reuters. Such a plan would need approval from a majority of the creditors.

In the last round of bidding, three bids were put in -- Time Warner with a bid of $1.5 billion, billionaire industrialist Len Blavatnik's Access Industries, whose offer involves an equity infusion and help with restructuring the company's $3.7 billion of debt, sources have said.

The third was from Lions Gate Entertainment which decided it would not increase its offer, putting it effectively out of the running, sources previously told Reuters.

MGM was bought in 2005 in a $2.85 billion buyout by a group that included four private equity firms -- Providence Equity Partners, TPG , Quadrangle Group and DLJ Merchant Banking Partners, as well as media companies Sony Corp <6758.T> and Comcast Corp -- which saddled the company with debt.

(Additional reporting by Jui Chakravorty in New York; Editing by Carol Bishopric and Richard Chang)

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