The worst-kept secret in Hollywood was confirmed Wednesday morning (May 26) when Amazon announced that it had reached an $8.45 billion deal to acquire 100-year-old iconic film studio MGM.
The media purchase by the largest online retailer is the latest move to grow its non-core businesses and marks the latest — and largest — deal in a string of recent content announcements aimed at raising the profile and prospects of both Prime Video and its Amazon Studios units.
“MGM has nearly a century of filmmaking history and complements the work of Amazon Studios, which has primarily focused on producing TV show programming,” the joint statement said.
Amazon also said it would help in the archival and preservation of MGM’s heritage and catalog of 4,000-plus films and 17,000 TV shows, while making them available to customers for viewing.
“Through this acquisition, Amazon [will] empower MGM to continue to do what they do best: great storytelling,” the company said.
According to Mike Hopkins, senior VP of Prime Video and Amazon Studios, the real financial value behind this deal is “the treasure trove of IP that we plan to reimagine and develop together with MGM’s talented team.”
For MGM executives, the deal marks the latest chapter in a long string of acquisitions, divestitures and bankruptcy that have shrouded the company for decades.
“It has been an honor to have been a part of the incredible transformation of Metro Goldwyn Mayer,” said MGM Chairman Kevin Ulrich. “The opportunity to align MGM’s storied history with Amazon is an inspiring combination,” he said, pointing to the bright new future of MGM’s iconic roaring lion.
From Silent Movies To Streaming
The agreement will transform a silent movie-era film giant into a streaming giant, and marks the second-largest deal in Amazon’s history, after its $13.7 billion purchase of Whole Foods in 2017.
The deal also spotlights the premium that content is commanding, as streaming for entertainment becomes a much more heated and fractioned battleground, with several notable mega deals this past month: AT&T’s announcement of its intent to merge its media content with Discovery to create a bigger media entity, and Verizon Media’s $5 billion sale of AOL and Yahoo to private equity firm Apollo Global.
In addition, Amazon has also been buying up the rights to live sports, closing a deal with the NFL for $1 billion per year to broadcast Thursday Night Football.
Amid this consolidation and changing landscape, Amazon’s talks with MGM had lingered in the background and fluctuated since the beginning of the year.
PYMNTS recently reported on ramifications of an Amazon-MGM tie-up, writing that movie theaters had been heavily compromised due to the pandemic, while services like Amazon Prime and other streaming sites had thrived, and were even able to put out several big-name theater releases.
Amazon said completion of the MGM transaction would be subject to regulatory approvals and other customary closing conditions and did not specify a time frame.