Amazon and MGM have announced that they have entered into a definitive merger agreement under which Amazon will acquire MGM for $8.45 billion.
MGM has nearly a century of filmmaking history and complements the work of Amazon Studios, which has primarily focused on producing TV show programming, the companies said. Amazon will help “preserve MGM’s heritage and catalog of films,” and provide customers with greater access to these existing works, the companies said. As we reported last week this acquisition will allow Amazon to empower MGM to continue to do what they do best: great storytelling.
Metro-Goldwyn-Mayer is the studio behind the Pink Panther, Rocky, and, yes, the 007 franchise. The pact comes on the heels of AT&T’s decision to spinoff WarnerMedia and combine it with Discovery, a deal that many entertainment analysts predict will spark a new round of mergers and acquisitions as media companies and streaming players scramble to lock up the most compelling content available.
However, companies previously interested in MGM when it was being quietly shopped in recent months express shock over the price. They believed the studio was worth more on the order of $5 billion to $6 billion with the assumption of some debt. That was do in part to the fact that MGM shares the rights to the Bond franchise with Eon Productions. That company, which is run by half-siblings Barbara Broccoli and Michael G. Wilson, has an unusual amount of control over the spy series — the approve everything from marketing to casting to distribution. That means that Amazon will struggle to get their sign off on any move to, say, debut the next Bond film on its streaming service, Amazon Prime.
Under its film chief Michael De Luca, MGM has lined up several promising projects, including Ridley Scott’s “House of Gucci,” Paul Thomas Anderson’s “Soggy Bottom,” and “Project Hail Mary,” an adaptation of Andy Weir’s novel that will star Ryan Gosling.
In recent years, Amazon’s studio division has shifted its strategy towards more commercial fare such as “Coming 2 America” and “Without Remorse” and away from the awards-driven productions such as “Manchester by the Sea” and “Cold War.”
The MGM deal is Amazon’s second-largest acquisition, just behind its $13.7 billion purchase of Whole Foods in 2017.