Business
Amazon in Talks to Acquire MGM Studios for $9 Billion
Tech titan Amazon is reportedly in discussions to acquire the legendary MGM Studios in what is its biggest push into entertainment. Reports say that the planned acquisition of Metro-Goldwyn-Mayer will carry a $9 billion price tag.
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MGM Studios Can Boost Amazon Prime Streaming Service
MGM studios is a long-running Hollywood film outfit that owns a number of hit franchises, including the long-running James Bond series.
Adding MGM’s extensive library can immediately boost Amazon’s Prime streaming services. Currently, Amazon Prime holds 16% of the streaming services market. It is second to frontrunner Netflix, which holds a 20% share.
Many companies saw MGM studios as an acquisition target over the years, but nobody managed to pull off the sale. Reports disclosed that MGM made a conscious effort to say it’s available for the right price.
In fact, the outfit reportedly hired advisers to solicit offers from potential buyers. The studio hoped to capitalize on the boom in streaming services. In particular, MGM is banking on heightened competition to increase demand for their exclusive content.
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Talks With Tech
MGM Studios also discussed taking its new films direct to streaming. For example, the studio approached Apple and Netflix about directly streaming its newest James Bond film.
When the discussions did not materialize into a deal, MGM announced that “No Time To Die” will premiere theatrically on October 8.
Meanwhile, Amazon continues to reorder its entertainment operations. The return of executive Jeff Blackburn triggered the move to reshuffle the company’s entertainment division.
Blackburn left Amazon to join Silicon Valley venture firm startup Bessemer Venture Partners. With his return, he’ll manage the operations of Prime Video, Amazon Studios, and Twitch.
MGM Studios Content
MGM Studios owns the rights to a number of franchises. This includes the venerable Bond movies, plus franchises for The Hobbit, Rocky, Silence of the Lambs, The Magnificent Seven, and others.
MG< also owns a number of syndicated TV series such as Vikings, Fargo, American Gladiators, The Voice, Survivor, Shark Tank, and The Real Housewives of Beverly Hills.
Meanwhile, Amazon reportedly spent $11 billion on content for Amazon Prime Video services. This includes producing or buying TV shows, music, and movies for Prime services in 2020. The amount is a huge 40% increase over its entertainment budget for 2019.
Confusion Among Investors
Amazon executive Mike Hopkins is handling negotiations for the takeover with MGM Chairman Kevin Ulrich. Previous to the MGM talks, Amazon reportedly went after movie chain AMC Entertainment Holdings Inc.
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Some investors confused the target company as cable channel owner AMC Networks.
With the Amazon talks, investors also suffered similar confusing states. Many bought shares of MGM Resorts International, a casino company.
MGM Resorts stock jumped 5.8% in trading. However, the casino company isn’t for sales, being a separate MGM brand. Shares retreated immediately as investors realized the faux pas.
Watch the Bloomberg Technology video reporting that tech giant Amazon is in talks to buy film studio MGM:
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