Amazon looking to buy Hollywood's MGM
Amazon.com Inc. is in talks to buy James Bond movie company Metro-Goldwyn-Mayer, according to a person familiar with the matter, potentially taking one of the last major independent film studios off the market.
Amazon is considering a bid of about US$9 billion, said the person, who asked not to be identified because the deliberations are private. Discussions could still fall apart and details such as price may change, the person said. The Information and Variety previously reported on the talks.
An agreement would cap a rush of streaming deals that are set to make 2021 a record year for media takeovers. Reports about the discussions came on the day that AT&T Inc. announced its plan to create a new entertainment company by merging assets with Discovery Inc. in an entity that will be valued at about US$130 billion including debt.
The proliferation of streaming services, including newer arrivals such as Disney+, HBO Max and Paramount+, has put pressure on Amazon to acquire more programming. MGM’s vast backlog also provides plenty of material at a time when production of new shows and movies is still recovering from the pandemic.
MGM and Amazon declined to comment on deal talks.
More than US$80 billion in media takeovers have been announced so far this year, according to data collected by Bloomberg. That puts 2021 on track to be the busiest period for the industry since at least 2000, when AOL and Time Warner Inc. announced plans to combine.
MGM has been seen as a takeover target for years, but was never able to close a sale. The company made a fresh push last year, when the Wall Street Journal reported it hired advisers to solicit offers.
MGM also discussed other scenarios with tech giants. MGM, whose library includes the “Rocky” films and “Silence of the Lambs,” held talks with Apple Inc. and Netflix Inc. about taking its new James Bond film directly to streaming. But the company said last year that it’s committed to a theatrical release for the film, which is currently slated for Oct. 8 in the U.S.
Amazon, meanwhile, is reshuffling its entertainment operations with the return of longtime executive Jeff Blackburn. He briefly left the e-commerce company to join Silicon Valley venture capital firm Bessemer Venture Partners. But now he’s taking command of Amazon’s entire entertainment division, including the Prime Video streaming service, Amazon Studios and the video-game-streaming site Twitch.
An Amazon acquisition of MGM would be its largest purchase since it bought Whole Foods Market for US$13.7 billion in 2017.
Talking to Chairman
Amazon’s bid for MGM is being handled by video executive Mike Hopkins, according to Variety. He’s dealing directly with MGM Chairman Kevin Ulrich, the publication said.
MGM traces its roots back to the 1920s merger of Marcus Loew’s Metro films with a film company run by Hollywood legend Louis B. Mayer. While making great pictures like “Dr. Zhivago” and “2001: A Space Odyssey,” MGM drifted in and out of financial distress in the second half of the 20th century. Over the decades it was owned by Time Inc., CNN founder Ted Turner and more than once by the late billionaire Kirk Kerkorian.
Now, it’s one of the last large movie studios that’s maintained its independence from larger media groups. Warner Bros. is now part of AT&T, Walt Disney Co. acquired 20th Century Fox, Paramount is owned by ViacomCBS Inc., and Universal Pictures is controlled by Comcast Corp.
There’s been speculation before about Amazon acquiring entertainment companies. It was previously seen as a possible buyer of AMC Entertainment Holdings Inc., the movie chain, with some investors confusing it with AMC Networks Inc., the owner of cable channels.
Investors suffered a similar sort of confusion on Monday, with the Information report boosting shares of MGM Resorts International, a casino company that isn’t part of Metro-Goldwyn-Mayer. MGM Resorts stock jumped as much as 5.8 per cent in late trading before quickly retreating.