Amazon at the moment introduced a definitive settlement to purchase MGM (Metro-Goldwyn-Mayer) for $8.45 billion. Amazon stated that MGM’s filmmaking prowess “complements the work of Amazon Studios, which has primarily focused on producing TV show programming.”
Buying MGM would let Amazon add loads of films to its Prime Video streaming service. It’s not clear whether or not MGM’s theatrical-release technique would change. “Amazon will help preserve MGM’s heritage and catalog of films and provide customers with greater access to these existing works. Through this acquisition, Amazon would empower MGM to continue to do what they do best: great storytelling,” the merger announcement stated.
Amazon stated the acquisition “is subject to regulatory approvals and other customary closing conditions” however didn’t present an estimated cut-off date. The acquisition announcement got here a few week after information stories revealed the negotiations.
“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” Mike Hopkins, senior VP of Prime Video and Amazon Studios, stated within the press launch. “It’s very exciting and provides so many opportunities for high-quality storytelling.”
The pending buy “has an equity value of $6.5 billion, people familiar with the matter said,” in response to The Wall Street Journal. “Including debt, the value of the deal is $8.45 billion, Amazon said.” Buying MGM would mark Amazon’s second largest acquisition after its $13.7 billion buy of Whole Foods in 2017.
Hopkins famous that “MGM has a vast catalog with more than 4,000 films—12 Angry Men, Basic Instinct, Creed, James Bond, Legally Blonde, Moonstruck, Poltergeist, Raging Bull, Robocop, Rocky, Silence of the Lambs, Stargate, Thelma & Louise, Tomb Raider, The Magnificent Seven, The Pink Panther, The Thomas Crown Affair, and many other icons—as well as 17,000 TV shows—including Fargo, The Handmaid’s Tale, and Vikings—that have collectively won more than 180 Academy Awards and 100 Emmys.”
The Handmaid’s Tale has been an enormous hit for Hulu, a significant rival to Prime Video. The present’s season 4 premiere was “the most watched Hulu Original ever, series or film,” with about 1 million viewers, Deadline reported this month.
Amazon received’t have whole management over Bond
Amazon will not have inventive management over the Bond franchise, The New York Times famous. “Amazon will own only 50 percent of the spy franchise,” the Times wrote. “The balance is held by Barbara Broccoli and her brother, Michael G. Wilson. The siblings also have ironclad creative control, deciding when to make a new Bond film, who should play the title role, and whether television spinoffs get made. (They have blocked such efforts in the past.)”
As Variety wrote final week, “Insiders believe that Broccoli and Wilson would likely nix any plans to debut Bond films on Amazon’s streaming service Prime Video and would insist on a theatrical release, as is their contractual right… The producers have also been resistant to have Bond pop up in spinoffs or television shows, the kinds of ancillary properties that could prove highly lucrative. Moreover, the films have been heavily licensed to cable networks and streaming platforms, which could complicate matters.”
The Bond movie Skyfall already comes included with a Prime Video subscription. All different movies within the sequence require a separate rental or buy on Prime Video, normally $4 to hire and $14 or $15 to purchase. Amazon would presumably select to make many or most of MGM’s movies out there within the primary Prime Video subscription as soon as it owns the corporate, however it may proceed charging rental and buy charges for some movies to earn more money.
Amazon faces antitrust scrutiny
Amazon’s try to purchase MGM may get some pushback from US regulators, as the corporate has confronted loads of antitrust scrutiny—although principally for its on-line retail gross sales enterprise. In addition to a congressional report that discovered that “Amazon has monopoly power over most third-party sellers and many of its suppliers,” antitrust scholar and famous Amazon critic Lina Khan is slated to fill an empty slot on the Federal Trade Commission, pending Senate approval. The District of Columbia sued Amazon yesterday, alleging that the net retail big violated antitrust regulation with most-favored nation insurance policies that forestall sellers from providing merchandise at decrease costs on different web sites.
MGM would assist Prime Video compete extra successfully towards the large Netflix. MGM’s enhance to Prime Video may additionally assist Amazon’s retail gross sales not directly due to how Amazon bundles its main providers right into a single $120-per-year Prime subscription that features Prime Video, Amazon Music, Prime Reading, sooner delivery on retail purchases, and different providers.
Several main movie studios are already owned by both a tech or telecom firm. Comcast owns Universal Pictures by means of its NBCUniversal subsidiary; AT&T owns Warner Bros. and New Line Cinema by means of its WarnerMedia division; and Sony owns Columbia Pictures and TriStar Pictures. AT&T purchased Time Warner for $108 billion in 2018 and final week introduced a deal to spin out the unit right into a separate firm that may be mixed with Discovery, Inc. AT&T stated the spinout will take a 12 months to finish. Walt Disney Studios is the opposite main movie studio.
MGM Board Chairman Kevin Ulrich stated that “the opportunity to align MGM’s storied history with Amazon is an inspiring combination.” Ulrich is the CEO of hedge fund Anchorage Capital, the highest shareholder within the holding firm that owns MGM, reportedly with a 35 p.c stake.