Amazon is closing in on a deal to buy Hollywood studio MGM for ‘almost $9 billion’

Amazon is closing in on a deal to buy Hollywood studio MGM for ‘almost $9 billion’ in a bid to bulk up its streaming library with such titles as James Bond and Shark Tank

  • Amazon, the $1.6 trillion dollar corporate giant, is closing in on a deal to buy film and television studio Metro-Goldwyn-Mayer, or MGM for $9 billion
  • A deal to sell the last standalone studio could be struck as early as this week, insiders told the Wall Street Journal 
  • The deal would significantly enhance Amazon’s Prime Video, which is locked in a fierce battle with Netflix, Apple and Disney for streaming supremacy 
  • MGM has a long and storied history, and recently has been behind the James Bond franchise, the Hobbit franchise, Fargo, Vikings and Shark Tank  

Amazon is set to clinch a deal to buy Hollywood studio MGM for ‘almost $9 billion’ this week, sealing a tie-up that’s been talked about for the past week as the streaming wars heat up even further.

The deal would significantly strengthen Amazon Prime’s hand in the ongoing streaming wars, bringing box office hits such as the James Bond and Hobbit franchises to the platform.  

The Wall Street Journal reported the deal could happen ‘as early as this week’, after weeks of speculation that the move was happening. MGM brought in investment banks Morgan Stanley and LionTree LLV in December to explore sale options.  

Metro-Goldwyn-Mayer, the last standalone American studio, which owns storied franchises such as the James Bond and Rocky stable of films, would significantly bulk up Amazon’s catalog, giving it a huge boost for its Prime Video service to compete against the likes of Netflix, Hulu and Disney+.   

The news of an MGM purchase comes after AT&T announced it would hive off its WarnerMedia entertainment and news assets and merge them with Discovery’s – creating a $150 billion behemoth.

The combined AT&T-Discovery company, which doesn’t yet have a name, would likely spend around $20 billion a year on original content. Last year, Amazon spent around $11 billion on its own content. An MGM deal could change that equation.   

Jeff Bezos's Amazon is nearing a deal to purchase Metro-Goldwyn-Meyer for $9 billion, according to reports

Jeff Bezos's Amazon is nearing a deal to purchase Metro-Goldwyn-Meyer for $9 billion, according to reports

Jeff Bezos’s Amazon is nearing a deal to purchase Metro-Goldwyn-Meyer for $9 billion, according to reports

The deal would significantly enhance Amazon's Prime Video streaming service, which is locked in a fierce battle with Netflix, Apple and Disney for streaming supremacy

The deal would significantly enhance Amazon's Prime Video streaming service, which is locked in a fierce battle with Netflix, Apple and Disney for streaming supremacy

The deal would significantly enhance Amazon’s Prime Video streaming service, which is locked in a fierce battle with Netflix, Apple and Disney for streaming supremacy

MGM's stable includes commercial and critical hits like The Handmaid's Tale, starring Elizabeth Moss

MGM's stable includes commercial and critical hits like The Handmaid's Tale, starring Elizabeth Moss

MGM’s stable includes commercial and critical hits like The Handmaid’s Tale, starring Elizabeth Moss

The Jeff Bezos-founded company, with a market cap of $1.6 trillion, brought in nearly $390 billion in revenue last year. 

The company also has its own Amazon Studios division which is currently filming a television version of The Lord of the Rings.

MGM has about 4,000 films in its catalog, according to the New York Times. Classics such as Dances With Wolves, Rain Man and the Terminator movies are housed at the studio. And newer productions made for TV, such as the Handmaid’s Tale and Shark Tank, also are part of the studio’s portfolio. 

This is how the streaming services currently stack up. Netflix has by far the biggest number of subscribers and it spends the most but the new Discovery and AT&T company will spend more. Amazon right now spends around $11 billion, but a purchase of MGM could change that equation

This is how the streaming services currently stack up. Netflix has by far the biggest number of subscribers and it spends the most but the new Discovery and AT&T company will spend more. Amazon right now spends around $11 billion, but a purchase of MGM could change that equation

This is how the streaming services currently stack up. Netflix has by far the biggest number of subscribers and it spends the most but the new Discovery and AT&T company will spend more. Amazon right now spends around $11 billion, but a purchase of MGM could change that equation

The purchase would bring one of Hollywood’s most storied names into the Big Tech fold. Apple and Comcast had both looked at possibly purchasing MGM, the Times reported: Both companies determined the studio was worth around $6 billion, so the Amazon purchase would be a big premium over those calculations.

MGM was once home to ‘more stars than the heavens,’ co-founder Louis B. Mayer would brag, according the times. They included Judy Garland, Clark Gable, James Stewart and Mickey Rooney at at one time or another.

Meanwhile, Amazon is looking to consolidate its film and television offering as it seeks to keep Prime Video competitive with streaming sites Netflix and Disney+, The Information reported. 

The ecommerce giant fared well at the recent 93rd Academy Awards, scooping up 12 nominations for films including ‘Sound of Metal’, ‘Time’, and ‘One Night in Miami’.  But Amazon is said to want to vastly expand its production capabilities to keep up with rival studios and streamers.  

In March, the tech company signed a ten-year agreement with the National Football League – becoming the first streaming service to secure an exclusive broadcast deal. 

This is how the major streaming services stack up. Netflix and Amazon Prime are the clear industry leaders but Disney and others, including Discovery, continue to invest in content

This is how the major streaming services stack up. Netflix and Amazon Prime are the clear industry leaders but Disney and others, including Discovery, continue to invest in content

This is how the major streaming services stack up. Netflix and Amazon Prime are the clear industry leaders but Disney and others, including Discovery, continue to invest in content 

The movie studio is behind the James Bond franchise, owns the Epix cable channel and makes TV shows, including popular shows like The Handmaid's Tale, Fargo, Vikings and Shark Tank

The movie studio is behind the James Bond franchise, owns the Epix cable channel and makes TV shows, including popular shows like The Handmaid's Tale, Fargo, Vikings and Shark Tank

The movie studio is behind the James Bond franchise, owns the Epix cable channel and makes TV shows, including popular shows like The Handmaid’s Tale, Fargo, Vikings and Shark Tank

MGM postponed the release of the latest Bond film - No Time to Die - four times. It is now set for release on October 8 in the US and September 30 in the UK

MGM postponed the release of the latest Bond film - No Time to Die - four times. It is now set for release on October 8 in the US and September 30 in the UK

MGM postponed the release of the latest Bond film – No Time to Die – four times. It is now set for release on October 8 in the US and September 30 in the UK

Prime Video will feature one pre-season game per year as well as 15 regular season football games starting in 2023.  

In another sign Amazon will increasingly focus on entertainment, the company announced last week former high-ranking executive Jeff Blackburn would return to oversee a consolidating global media and entertainment group. 

The ecommerce company said recently it has reached 200 million subscribers on Prime Video. 

In December, MGM said it was exploring a sale. It said it had tapped investment banks Morgan Stanley and LionTree LLC, and started a formal sale process. 

At the time, the company had a market value of around $5.5 billion, based on privately traded shares and including debt, Reuters reported.   

MGM would be the latest in a line of Hollywood studios to get taken over by a massive corporation. 

Universal now operates within Comcast; Paramount through ViacomCBS; and Fox under Disney. 

Earlier this month rival AT&T announced it was merging WarnerMedia and Discovery to create a new streaming service and the second largest media company in the world in terms of revenue, after Disney. 

In December, the movie studio said it was exploring a sale. It said it had tapped investment banks Morgan Stanley and LionTree LLC, and started a formal sale process

In December, the movie studio said it was exploring a sale. It said it had tapped investment banks Morgan Stanley and LionTree LLC, and started a formal sale process

In December, the movie studio said it was exploring a sale. It said it had tapped investment banks Morgan Stanley and LionTree LLC, and started a formal sale process

Many studios have been hard hit by the coronavirus pandemic as cinemas across the world were forced to close for more than 12 months.

MGM postponed the release of the latest Bond film – No Time to Die – four times. It is now set for release on October 8 in the US and September 30 in the UK. 

Netflix had engaged in talks with MGM to release the film on its streaming platform in fall last year but said the cost was prohibitive after discussions broke down. 

Netflix was one of the big winners of the pandemic, seeing a surge in subscribers as people the world over were confined to their homes.   

Traditional US media companies are now trying to re-invent themselves as streaming services to keep up with the streaming giant.   

Disney, Apple, and Comcast have all recently launched streaming platforms with global ambitions.  Hulu, Starz, and Paramount+  have also joined the highly-competitive market. 

An Amazon spokeswoman said they don’t comment on rumors and speculation.  

STREAMING SERVICE BREAKDOWN

Here’s a look at the new streaming challengers and what you get with each: 

NEW PLAYERS 

Discovery’s merger with AT&T’s WarnerMedia 

There is no name yet for the new service that will be launched next year when the deal is complete. 

It’s unclear how much it’ll cost a month and where it’ll be available first. 

The new service will combine WarnerMedia’s news and entertainment brands like HBO Max and CNN with Discovery’s reality TV empire. 

Discovery already has its own streaming service – Discovery+. 

That has all of Discovery’s lifestyle brands along with HGTV and international sports rights. It owns Eurosport, the European sports TV network and the GolfTV streaming network.  

Disney+

Disney’s entertainment service, featuring shows and movies from Disney, Pixar, Marvel, Star Wars and National Geographic.

Price: $7 a month or $70 a year. Getting Disney Plus with ESPN Plus and Hulu, both owned by Disney, will cost $13 a month.

Promotions: Seven-day free trial. Free year with all Verizon Wireless unlimited plans and when customers switch to Verizon’s Fios Home Internet or 5G Home Internet.

Original shows: ‘The Mandalorian,’ a live-action ‘Star Wars’ series created by Jon Favreau. A prequel to the ‘Star Wars’ movie ‘Rogue One.’ A series about the Marvel character Loki. A rebooted ‘High School Musical’ series. A documentary series focused on Disney.

Other shows and movies: Animated classics, including ‘Aladdin’ and ‘The Jungle Book,’ will be available at launch; others will be added as streaming deals with other services expire. Movies released in 2019 or later will go to Disney Plus rather than a rival streaming service first. Disney Plus will also house past seasons of ‘The Simpsons,’ which Disney got through its purchase of Fox’s entertainment business.

Apple TV+ 

Apple’s entry into the streaming business.

Price: $5 a month

Promotions: Seven-day free trial. A year free to buyers of a new iPhone, iPad, Apple TV, iPod Touch or Mac.

Original shows: A Jason Momoa series called ‘See’ and ‘The Morning Show,’ a comedy starring Jennifer Aniston, Reese Witherspoon and Steve Carrell. The service will launch with nine original shows and movies, with more expected each month.

Other shows and movies: None.

Peacock 

The service from Comcast’s NBCUniversal will carry 15,000 hours of video at launch.

Price: Undisclosed

Promotions: Free for many Comcast cable and internet customers.

Original shows: Reboots of ‘Battlestar Galactica’ and ‘Saved by the Bell.’ Comedy series ‘Rutherford Falls,’ from Michael Schur, creator of ‘The Good Place’ and ‘Parks and Recreation.’

Other shows and movies: ’30 Rock, ‘Will & Grace,’ and ‘Cheers,’ though these won’t stream exclusively on Peacock. Peacock will get ‘Parks and Recreation’ and ‘The Office’ once existing deals with Netflix expire. ‘Bridesmaids,’ ”E.T.’ and other movies from Universal Pictures, Focus Features and DreamWorks Animation.

STREAMING VETERANS 

Netflix 

Price: Netflix’s most basic plan is $8.99 per month, its Standard plan with HD quality – the company’s most popular offering – is $12.99 per month and the Premium plan is $15.99 per month.  

Original Shows: Netflix features more than 1,000 original offerings, including Stranger Things, The Crown, Orange Is The New Black, Bojack Horseman and GLOW.

Hulu

Launch date: March 2008

Price: Hulu offers four levels of service: Basic ($5.99 per month), Premium ($11.99 per month), Basic + Live TV ($44.99 per month), and Premium + Live TV ($50.99 per month). Basic has ads, while Premium is ad-free.

Original shows: Hulu offers significantly fewer originals than its competitor Netflix, with 26. Popular series include The Handmaid’s Tale, Castle Rock, PEN15 and The Act. 

Amazon Prime 

Price: Amazon Video is available to all Amazon Prime members. The Prime membership is $12.99 per month or $119 per year.  

Original shows: Amazon has 39 original shows, including The Man in the High Castle, Bosch, Mozart in the Jungle, Patriot, Sneaky Pete and The Marvelous Mrs. Maisel 

Advertisement

Advertisement
Read more:

Loading

Leave a Reply

Your email address will not be published. Required fields are marked *

Follow by Email
Pinterest
LinkedIn
Share