Blockbuster deal: Amazon reportedly in talks to buy MGM Studios - 18th May 2021

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MGM is the home of the James Bond and Rocky franchises. CREDIT: AP

By Ryan Faughnder

Amazon is in talks to acquire Metro-Goldwyn-Mayer Studios, the Beverly Hills based film and TV company behind the James Bond and Rocky film franchises and TV shows including The Voice according to three people familiar with the matter who were not authorised to comment.

Amazon is looking to bulk up its film and TV operations with MGM’s deep film library and substantial television production work as it looks to keep Prime Video competitive with Netflix and Disney+, which are spending billions to dominate the streaming wars, the sources said.

The Seattle-based company had long been thought to be a potential acquirer due largely to the appeal of the MGM film and TV library, which includes 4000 movies such as Robocop, The Pink Panther and The Silence of the Lambs. MGM’s scripted TV division is responsible for Fargo, The Handmaid’s Tale and Vikings.

The Information first reported the talks, which escalated recently and are said to be in the advanced stages. Sources said the purchase price being discussed is within a range of $US7 billion to $US9 billion ($9 billion-$11.5 billion).

MGM declined to comment, and Amazon reps did not respond to requests for comment.

If MGM does sell to Amazon, it would be a landmark pact for Hollywood, which is increasingly dominated by tech giants. Internet giants like Amazon, Apple and Google parent Alphabet have long been speculated as potential acquirers of a legacy movie studio.

Deal talks come after Amazon had a solid showing at the 93rd Academy Awards, where it had 12 nominations for movies including One Night in Miami and Sound of Metal. It released popular movies in the pandemic, including Borat Subsequent Moviefilm and Coming 2 America, which it acquired from Paramount. But the tech titan still needs more to keep up.

The discussions, which could still fall apart, also come after Amazon executive Jeff Blackburn returned to the company to oversee Prime Video, Amazon Studios and other entertainment businesses. The move was seen as another sign that Amazon is ramping up in entertainment.

MGM’s sale would be the latest consolidation in the media and entertainment space as companies join forces to achieve competitive size and scope.

AT&T on Monday said its media arm WarnerMedia would spin off and merge with Discovery to form a new company that could take on Netflix and Disney+.

MGM has been on the block for months. The company tapped bankers to explore a sale as early as December. Smaller studios have struggled to remain competitive as larger players bulk up for the streaming wars. Lionsgate and others are consistently rumoured to be targets for acquisition.

Some of MGM’s moves during the pandemic have fuelled sale rumours. Film chairman Michael De Luca has been beefing up its slate. MGM in November announced plans for Oprah Winfrey and Brad Pitt to produce an adaptation of Ta-Nehisi Coates’ The Water Dancer. In August, the company vowed to remake its Orion Pictures label to focus on movies with diverse filmmakers and casts under Alana Mayo, the former production head of Michael B. Jordan’s company Outlier Society.

It would be the latest ownership change for the storied brand with the roaring lion logo. MGM emerged from Chapter 11 protection in December 2010 under a prepackaged plan to wipe out $US4 billion in debt. New York-based private equity firm Anchorage was among a group of MGM’s top creditors who became shareholders at that time.

Since 2018, MGM has been run by an “office of the CEO” that includes chief operating officer Chris Brearton, TV head Mark Burnett and other executives. MGM adopted the structure when CEO Gary Barber was abruptly fired after eight years.

Barber had been pushing for a sale, which Anchorage head Kevin Ulrich opposed, according to people familiar with the matter who were not authorised to comment.

McClatchy