Amazon could be getting close to a $9 billion deal to purchase Hollywood studio MGM, according to The Wall Street Journal. The agreement, which would essentially transform a silent movie-era film giant into a streaming giant, could happen as soon as this week.
This would be the second-largest deal in Amazon history, after its $13.7 billion deal to buy Whole Foods in 2017.
The deal would also spotlight the premium that content is commanding, as streaming for entertainment becomes a much more heated and fractioned battleground. Big players have been looking to acquire new companies to help boost their arsenals. In other recent news, AT&T announced its intent to merge its media content with Discovery to create a bigger media entity.
MGM, which is privately traded, was last valued at $5.5 billion, including debt, in December 2020. Since then, its price has soared, reaching $105 per share in May. After the merger talks were reported, they rose to $150 per share on Monday (May 24).
Amazon’s talks with MGM have fluctuated since the beginning of the year, according to sources with knowledge of the situation. Although recent weeks have seen exclusive talks, nothing has been finalized yet.
Two years ago, MGM fired then-CEO Gary Barber after he was found to have talked with Apple about a sale that valued MGM at $6 billion. Since then, MGM has had no chief executive, instead utilizing an “office of the CEO” with various company executives, the report noted.
PYMNTS recently reported on the Amazon-MGM talks, 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 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.