Amazon has just shaken and stirred up the movie industry. A week after it was reported the corporate giant was “weeks into negotiations” on a deal to acquire MGM and its thousands of valuable titles, Amazon has officially bought MGM for a whopping $8.45 billion.
Variety reports that Amazon and MGM officially announced that they have entered into a definitive merger agreement, under which Amazon buys MGM for $8.45 billion — not far off from the $9 billion number that was reported early last week.
Under this deal, Amazon will help “preserve MGM’s heritage and catalog of films,” and provide customers with greater access to these existing works, the companies said. MGM is one of the oldest studio names in Hollywood and has nearly a century of filmmaking history in its library. Those works encompass over 4,000 films and over 17,000 hours of television shows, including valuable film titles like James Bond, The Hobbit, Rocky/Creed, RoboCop, The Pink Panther, Stargate and The Silence of the Lambs as well as scripted and unscripted TV like the Stargate TV shows, Fargo, Vikings, The Handmaid’s Tale, The Voice, Survivor, and Shark Tank.
The pact is just the latest acquisition of a major film studio, hot on the heels of AT&T’s offloading of WarnerMedia to Discovery. The movie landscape is rapidly shifting to one of legacy studios falling under multimedia conglomerates, like Disney and 20th Century Fox, Marvel, Lucasfilm, and Pixar; Discovery and WarnerMedia; and now Amazon and MGM.
Amazon’s streaming platform Amazon Prime Video boasts an impressive 175 million subscribers, though its library is notoriously unimpressive — mostly due to a frustrating interface. But Amazon has been steadily offering more promising originals, including the upcoming Lord of the Rings series, and has been shifting towards more commercial movie offerings like Paramount Pictures’ Coming 2 America, Tom Clancy’s Without Remorse, and The Tomorrow War. They also found great success with Borat Subsequent Moviefilm last year.
MGM’s sale has been in the works for quite some time now. The studio began exploring a possible sale in December 2020, quietly shopping its studio and titles around in recent months to companies that, per Variety, expressed “shock over the price.” Companies reportedly believed MGM was undervaluing itself at $5 billion to $6 billion with the assumption of some debt, but that’s due to the complicated nature of its rights to the James Bond franchise, which it shares with Barbara Broccoli and Michael G. Wilson’s Eon Productions. Broccoli and Wilson exert “unusual” control over the spy series, which could mean that Amazon will have trouble getting their approval to debut a Bond movie on their streaming service Amazon Prime, for example. But Amazon apparently seemed to think the trouble was worth the price, forking over an impressive $8.45 billion. That makes MGM Amazon’s second-largest acquisition, just behind its $13.7 billion purchase of Whole Foods in 2017.
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