67.2 F
Los Angeles
Friday, Jun 9, 2023

MGM to Be Acquired by Amazon for $8.45 Billion

Beverly Hills-based Metro-Goldwyn-Mayer Studios Inc., the 97-year-old Hollywood studio that is home to James Bond and other legacy film franchises, is set to be acquired by Amazon for $8.45 billion.

The deal, announced May 26 by Amazon.com Inc., gives the Seattle ecommerce giant rights to the storied studio’s library of 4,000 films and 17,000 television shows, including “Legally Blonde, Robocop, “Survivor” and “The Handmaid’s Tale.” 

MGM's content library will give Amazon Prime a competitive edge as it tries to keep pace with streaming competitors Netflix Inc., Walt Disney Co.'s Disney Plus and WarnerMedia's HBOMax. 

“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 vice president of Prime Video and Amazon Studios, said in a statement.

The acquisition is subject to regulatory approval.

At Amazon's annual shareholder meeting on May 26, Chairman Jeff Bezos said the company plans to “reimagine” MGM’s catalog.

“The acquisition’s thesis here is really very simple: MGM has a vast, deep catalog of much-loved intellectual property,” Bezos said. “With the talented people at MGM and Amazon Studios, we can reimagine and develop that IP for the 21st century.”

Historically a film and television powerhouse, MGM has won 180 Academy Awards and 100 Emmys since it was founded in 1924. But with the pandemic delaying film releases, including "No Time to Die" — the 25th installment of the James Bond franchise — MGM Holdings saw its fiscal year revenue dip from $1.54 billion to $1.5 billion in 2020. 

New York-based investment firm Anchorage Capital holds a roughly 35% stake in MGM Holdings. Bloomberg reports that the firm stands to make $2 billion in the Amazon sale. 

Rumors of a deal started swirling last week, with media outlets reporting an asking price of $9 billion for MGM. 

The studio started looking for buyers in December, hiring New York-based investment banking companies Morgan Stanley and LionTree as advisors. MGM was shopped to companies including Apple Inc. and Comcast Corp., which had reportedly placed a value of about $5 billion on the studio.

Amazon spent $11 billion on content for its Prime streaming services in 2020. According to the company’s April 29 earnings report, 175 million of Amazon’s 200 million subscribers used its Prime Video platform for streaming in the past year, and streaming hours were up 70% year over year. 

“The opportunity to align MGM’s storied history with Amazon is an inspiring combination,” Kevin Ulrich, chairman of the board of directors of MGM, said in a statement.

Featured Articles

Related Articles