Amazon in Talks to Buy MGM For $9 Billion
Amazon is currently in negotiations to potentially buy MGM, which would give it ownership over 4,000 film titles including the James Bond franchise
Amazon is said to be offering $9 billion to acquire MGM and is "weeks into" negotiating with the media company, as confirmed by Variety. If the deal does go through, the tech giant will gain access to over 4,000 film titles -- including the entirety of the James Bond franchise and the Rocky and Creed franchises -- and 17,000 episodes of television programming.
MGM's expansive library of television programming includes scripted titles like Fargo, The Handmaid's Tale, Stargate Atlantis and unscripted reality programs like The Hills, Shark Tank and The Voice. The studio also owns the Epix streaming platform, which currently hosts the Mad Max franchise and Epix originals Pennyworth and War of the Worlds.
Although Amazon and MGM have not publicly commented on this potential acquisition at this time, an industry source suggested that SVP of Prime Video and Amazon Studios Mike Hopkins is currently working directly with MGM board and chairman Kevin Ulrich on the details of the deal.
Amazon's interest in MGM is reportedly related to its current focus on increasing the depth of its Amazon Prime Video library. Recently, Amazon founder and CEO Jeff Bezos shared with investors that of the company's 200 million Prime members globally, approximately 175 million streamed content through Amazon Prime Video.
In December 2020, MGM Holdings Inc. first announced it was interested in selling its entire film catalog. MGM came to this decision from the ongoing pressures of the COVID-19 pandemic shifting media's focus to streaming content and away from big-budget theatrical releases. As both a film and television production company and distributor, the company faced unprecedented budget cuts and profits loss when theaters remained closed globally throughout 2020. In April 2020, MGM laid off 7% of its staff -- approximately 50 individuals from its assorted divisions and enforced salary cuts for its top executives.
MGM's financial situation became more worrisome when Warner Bros. announced in December 2020 that it planned to release its entire 2021 slate of films on HBO Max, its parent company's streaming service, and in theaters simultaneously. Shortly after the announcement, LionTree CEO Aryeh B. Bourkoff stated that WarnerMedia's plan "poses many challenges by creating disruptions and opportunities for content creators, theatrical distributors but also highlighting the need for IP even for the most scaled of streaming platforms."
Previously, Apple and Netflix were reportedly considering acquiring MGM since the company is "heavy on intellectual property and light on people." At the time of this writing, MGM, Amazon, Apple and Netflix have not issued a statement about this potential buyout.