It’s official: Amazon will buy MGM for $8.45 billion. The Seattle tech giant on Wednesday announced the deal, which would be its second-largest acquisition behind the $13.7 billion purchase of Whole Foods in 2017.
The deal is subject to regulatory approval and comes as Amazon faces more antitrust scrutiny. The deal is already drawing criticism from lawmakers.
Purchasing the historic Hollywood studio will be a major boon to Amazon’s growing media arm. Amazon is already an active player in film and television with content it creates and acquires through Amazon Studios and that it broadcasts through its streaming service, Prime Video. Amazon also owns IMDb.com.
MGM would provide Amazon with more than 4,000 films and 17,000 TV shows that have collectively won more than 180 Academy Awards and 100 Emmys. The film library includes the James Bond and Rocky franchises, as well as television shows such as “The Handmaid’s Tale” and “Fargo,” and reality shows such as “Shark Tank” and “Survivor.”
“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, SVP of Prime Video and Amazon Studios, said in a statement.
A privately held company, MGM was valued around $5.5 billion, including debt, last December, according to the Wall Street Journal. It had reportedly been looking for a buyer for several years.
The deal signals Amazon’s continued investment in its media arm to compete against the likes of other streaming giants such as Netflix, Hulu, and Disney. Amazon uses Prime Video as one of many perks — including free shipping, cloud storage, etc. — for its $119/year Prime membership, which counts 200 million members globally. Amazon spent $11 billion on video and music content last year, up from $7.8 billion the year prior, CNBC reported.
Brad Stone, author of the new book “Amazon Unbound,” wrote this week that Bezos gathered Amazon media execs in 2017 and said, “I want my Game of Thrones.” Since then Amazon has faced increasing pressure from other media giants that own large movie and TV franchises.
“Against that competitive landscape, Bezos doesn’t just need a television series with dragons and lots of blood. (Though, he might get that as well, from the upcoming Lord of the Rings show.),” Stone wrote in Bloomberg’s Fully Charged newsletter. “He needs a studio with a vault of intellectual property that can produce those kinds of global blockbusters at a regular clip.”
For the gentle folks at MGM, here are Jeff Bezos's twelve ingredients for every epic story, from the Hollywood chapter of my book Amazon Unbound. https://t.co/8fFlmzLcOx. Good luck! pic.twitter.com/qlz3EEBfSq
— Brad Stone (@BradStone) May 26, 2021
Recode’s Peter Kafka noted that Amazon wants MGM “not so much because it wants to own streaming, but because it wants you to keep coming to Amazon.”
Amazon has already made moves to spend big to buy traditional media in other forms, such as its reported $1 billion-a-year agreement with the NFL to exclusively stream Thursday Night Football for 11 seasons.
The MGM deal provides clues to the return of longtime exec Jeff Blackburn, who retired earlier this year, joined a venture capital firm for five weeks, but then decided to come back to lead a new “Global Media & Entertainment” organization that will include Prime Video and Amazon Studios, Music, Twitch, and more. He starts June 7.
MGM and Amazon Web Services signed a cloud computing agreement in December to move the studio’s content and distribution efforts to the cloud and to help the studio develop “new business models” and “new revenue opportunities,” The Hollywood Reporter previously reported.
