Amazon has been investing in the media arm of its empire as of late, spending $11 billion last year on television programming, music, and movies for its Prime service—a 40% increase from the year before. Amazon Prime has more than 200 million subscribers worldwide, with Bezos recently telling investors that 175 million of those subscribers streamed content on Prime Video in the last year. Just last week Amazon brought back former top executive Jeff Blackburn to oversee a combined global media and entertainment group.
Amazon Reportedly In Talks to Buy MGM Studios
Amazon is reportedly several weeks into negotiations on a deal to buy MGM studio, the Hollywood studio behind the “James Bond” franchise, for between $7 billion and $10 billion.
The legendary studio — whose film and TV catalog includes everything from “Silence of the Lambs” to “Shark Tank” — has been up for sale since late last year, and has long been seen as a possible target for a tech giant.
But according to reports, the Seattle-based e-tailer’s interest in snapping up the studio has become serious, as Amazon’s Prime Video streaming service faces increasingly stiff competition with fast-growing rivals like Netflix and Disney+.
The deal is said to be orchestrated by Mike Hopkins, senior vice president of Amazon Studios and Prime Video, directly with MGM Studio board chairman Kevin Ulrich, whose Anchorage Capital is a major MGM shareholder, Variety said Tuesday.
If a sale were to happen, it would represent Amazon’s biggest play in the content game after years of speculation that the retail giant was in the market for acquisitions. In December, MGM studio hired Morgan Stanley and LionTree LLC to launch a formal sale process.
Reps for both MGM Studio and Amazon declined to comment on what each company described as “rumors and speculation.”
Along with its film and TV library, MGM Studio also owns premium cable network Epix, which earlier this year expanded its partnership with Paramount to make films licensed to the network available for streaming on Paramount+.
In 2019, the MGM studio grossed just over $23 million at the domestic box office — and last year’s releases have been delayed by the pandemic, including the expected blockbuster 25th Bond film, “No Time to Die,” which is currently aiming for an October 2021 release in theaters. Other films set for release by the studio include Michael B. Jordan’s “Creed III” and Ridley Scott’s “House of Gucci” starring Adam Driver and Lady Gaga.
The news of Amazon’s interest in MGM studio comes just hours after AT&T reached a deal to spinoff WarnerMedia in a merger with Discovery. With multiple media companies launching their own streaming services, pressure is mounting among the industry’s biggest companies to acquire smaller studios and media entities in an effort to increase the amount of content they can offer to customers.
Since classic films and TV shows provide an easy way to bolster a streamer’s content pool, studios like MGM studio, which holds one of the largest film archives in the industry thanks to its status as one of Hollywood’s oldest studios, a major target as media consolidation ramps up. In addition to the James Bond and “Rocky” franchises,” MGM studio produces TV hits such as “The Handmaid’s Tale” and “Vikings” as well as reality TV shows like “Survivor” and “The Voice.” The studio’s library includes a 4,000 film titles and 17,000 hours of TV programming.
Amazon, meanwhile, has been rapidly building its media division, having spent $11 billion in 2020 on movies, TV shows, and music for its Amazon Prime service. In addition, the company recently arranged for Jeff Blackburn, who had departed Amazon this past February, to return next month as SVP of a new media division that will encompass all of the company’s media services, including Amazon Prime, Twitch, Audible, and Amazon Studios.