MGM Sold to Amazon for $8.45 Billion in Blockbuster Deal
In a landmark mega deal, Amazon is acquiring
MGM Holdings — whose storied studio boasts one of the largest film and TV libraries — in a bid to turbocharge its Prime membership offering to customers and potentially mine intellectual property of franchises such as James Bond and
Rocky.
The deal, pending regulatory approval, values the studio at $8.45 billion. “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. It’s very exciting and provides so many opportunities for high-quality storytelling,” said Mike Hopkins, senior vp of Prime Video and
Amazon Studios, in unveiling the buy.
The acquisition, unveiled just days after AT&T announced a $43 billion plan on May 17 to spin off its
WarnerMedia division, including HBO and Warner Bros., to Discovery, marks the latest major consolidation to rattle the entertainment industry. Amazon, led by CEO Andy Jassy and founder Jeff Bezos — who has pushed the tech giant further into Hollywood — recently enlisted Jeff Blackburn to rejoin the Seattle-based company as head of global media and entertainment, overseeing divisions from games to audio and video, with a June 7 start date.
Amazon — which disclosed in April that 175 million Prime members have viewed movies and TV shows on its platform in the past year — is battling Netflix (207 million global subs) and Disney+ (103 million subs) for global supremacy among top streaming platforms. Among its original scripted fare, Amazon launched Barry Jenkins’ limited series
The Underground Railroad this month, its
The Marvelous Mrs. Maisel is a perennial Emmy nominee and its biggest upcoming bet is a pricey
The Lord of the Rings series. Amazon earned Oscar nominations this year with
Sound of Metal,
One Night In Miami and sequel
Borat Subsequent Moviefilm, among other titles. The studio has picked up films like Eddie Murphy comedy
Coming 2 America (Paramount) and the upcoming
Everybody’s Talking About Jamie (New Regency) and aggressively moved to nab live NFL rights, including
Thursday Night Football from Fox beginning in 2022. Last year alone, Amazon spent $11 billion on video and music content for Prime Video and Amazon Music.
Now, it will add a vast collection of Hollywood classics and franchises to its mix. MGM boasts a film library of around 4,000 titles and 17,000 hours of TV programming, including the Bond,
Rocky/Creed and
The Hobbit film franchises. The 25th installment in the Bond series,
No Time to Die, was delayed multiple times to Oct. 8, 2021 as the pandemic has slowed a box office recovery. (The Bond franchise rights are co-owned by Eon Productions, run by Michael G. Wilson and Barbara Broccoli.) Additionally planned for this year is Ridley Scott’s
House of Gucci, starring Lady Gaga, and animated sequel
The Addams Family 2.
MGM also boasts one of the largest collections of classic Hollywood titles, including 1980’s
Raging Bull, 1987’s
Moonstruck and 1991’s
Thelma & Louise and
Silence of the Lambs. (In unveiling the buy, Amazon stated that MGM’s film catalog “complements the work of Amazon Studios, which has primarily focused on producing TV show programming.”)
MGM’s top shareholder is Anchorage Capital, run by former Goldman Sachs executive Kevin Ulrich, who leads the studio’s board of directors. The company has gone without a single CEO since March 2018 when Gary Barber, the Spyglass Entertainment founder who joined MGM after it emerged from bankruptcy in 2010, was abruptly fired. Multiple senior execs form the “office of the CEO” and report to the board of directors of the firm. Ulrich, in the deal announcement, stated: “The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”
Much of MGM’s revenue comes from licensing deals for its vast film and television content library, its public disclosure in June 2020 showed. The Beverly Hills-based studio disclosed a round of layoffs last April that impacted 50 staffers out of its 750 employees while senior management took “voluntary pay reductions” amid the film and TV shutdown during the pandemic.
The studio’s film group is led by chairman Michael De Luca, the New Line Cinema and DreamWorks veteran who joined MGM in January 2020. The TV side is overseen by Mark Burnett, the reality format mogul who arrived at the firm in 2015 after spearheading shows like NBC’s
The Apprentice and CBS’
Survivor.
MGM TV produces Hulu’s
The Handmaid’s Tale, FX’s
Fargo and History’s
Vikings and the studio has a stake in unscripted offerings like NBC’s
The Voice and CNBC’s
Shark Tank. The studio has grown through acquisitions like Evolution Film & Tape, Inc., the makers of
The Real Housewives of Orange County, and Big Fish Entertainment, which produces
Live Rescue.
In 2017, MGM acquired full ownership of premium pay TV network Epix — whose original series include
Godfather of Harlem,
Get Shorty and
Britannia — from Lionsgate and Viacom for $1.031 billion and installed former TBS and TNT vet Michael Wright as president. MGM launched Epix Now as a standalone streaming service in Feb. 2019 at a price of $6 a month. While the company didn’t break out subscriber numbers in its latest earnings release, MGM disclosed that revenue from Epix totaled $111 million for the three months ending on Sept. 2020.
The sale of MGM marks the newest chapter for the venerable studio whose history dates back nearly a century. Metro-Goldwyn-Mayer was founded in 1924 by movie theater chain mogul Marcus Loew. The studio put into production as one of its first releases the silent epic
Ben-Hur, an early hit that would be remade multiple times, including 1959’s Oscar-winning version and 2016’s costly big-budget misfire. It also produced
The Wizard of Oz and the highest domestic grossing film of all time adjusted for inflation, 1939’s
Gone With the Wind. MGM signed up a large roster of Hollywood stars like Myrna Loy, Clark Gable and Joan Crawford that bolstered the studio’s early years and in subsequent decades backed Oscar winners
The Apartment (1960) and
West Side Story (1961).
Over the past decade, MGM’s film hits include the billion-dollar grossers
The Hobbit and Bond entry
Spectre in 2012, a blockbuster revival of the
Rocky franchise with 2015’s
Creed ($173 million globally) and 2019’s animated reboot of
The Addams Family ($203 million).
Last July, MGM restructured its Orion Pictures — a label purchased in 1997 for its film library that included Oscar winner
Dances With Wolves and actioner
Robocop — to prioritize telling underrepresented stories, with
Just Mercy producer Alana Mayo named as president. In October, the studio relaunched American International Pictures as a banner for deals of indie foreign sales titles.
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