Amazon has announced that it is purchasing the legacy Hollywood studio MGM in a hefty $8.45 billion transaction that will bolster the Silicon Valley behemoth’s already considerable Hollywood footprint and give its Prime Video streaming service a competitive advantage as well as control over valuable movie titles including the James Bond and Rocky franchises, as well as numerous classics such as The Wizard of Oz.. Amazon and MGM announced their comprehensive merger deal this morning, under which Amazon will purchase MGM for $8.45 billion.
The transaction is currently awaiting regulatory approval. Late last year, MGM was said to be worth $5.5 billion.
“Amazon will help preserve MGM’s heritage and catalog of films, and provide customers with greater access to these existing works,” the companies said. “Through this acquisition, Amazon would empower MGM to continue to do what they do best: great storytelling.”
The MGM library contains such popular titles as the James Bond movies, the Rocky and Creed movies, The Silence of the Lambs, Raging Bull, Basic Instinct, and the Legally Blonde movies. MGM also owns numerous movies from the golden age of Hollywood.
The MGM library also contains 17,000 TV shows. The surfeit of content will help Prime Video compete in the increasingly crowded streaming entertainment field, where Netflix, Disney+, and HBO Max are battling for dominance.
“The real financial value behind this deal is the treasure trove of [intellectual property] in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios, in a statement.
“It’s very exciting and provides so many opportunities for high-quality storytelling.”
One of the biggest hurdles was probably the 007 property. According to Variety, the Broccoli family maintains unprecedented creative control of the IP through Eon Productions, who have been stewards of the film series dating back to Bond’s first on-screen appearance in 1962’s “Dr. No.” They report:
Under a deal first hammered out by Albert “Cubby” Broccoli, MGM has the right to finance and distribute all of the Bond movies and splits the profits with EON. However, Broccoli’s heirs and Eon’s chiefs, Barbara Broccoli and her half-brother Michael G. Wilson, still have final say on everything from the film’s marketing and distribution plans to whoever will slip into Bond’s tuxedo when Daniel Craig hangs up the role.
Insiders believe that Broccoli and Wilson would likely nix any plans to debut Bond films on Amazon’s streaming service Prime Video and would insist on a theatrical release, as is their contractual right. That was a key stumbling block when MGM briefly floated the possibility of selling the COVID-delayed Bond sequel “No Time to Die” to Apple for north of $600 million. The producers have also been resistant to have Bond pop up in spinoffs or television shows, the kinds of ancillary properties that could prove highly lucrative. Moreover, the films have been heavily licensed to cable networks and streaming platforms, which could complicate matters.
“If Barbara isn’t on board with this, things could be very difficult,” says an executive who has worked on Bond films.
Looks like Barbara is on board.
Amazon Studios is also presently working on a television series based on The Lord of the Rings that is said to cost upwards of $465 million to produce. Will Amazon bring the right level of aplomb to some of these most respected properties? Bounding Into Comics reports that many of the IPs may get “reimagined.” A risky proposition in the minds of many.
This acquisition, which is CEO Jeff Bezos’ largest since the online retailer purchased Whole Foods for $13.7 billion in 2017, follows AT&T Inc.’s $43 billion combination of its WarnerMedia division with Discovery Communications Inc., creating a streaming giant to compete with Walt Disney Co.’s Disney+ and Netflix.