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Amazon has agreed to acquire film studio MGM Holdings for $8.45 billion, the company announced Tuesday, marking Amazon’s biggest push into Hollywood as the company attempts to bolster its streaming platform amid increasing competition from the likes of Netflix, Disney, and WarnerMedia and Discovery’s upcoming media behemoth.
The acquisition gives Amazon access to MGM’s vast catalog of classic Hollywood films like “Gone With the Wind,” “The Wizard of Oz,” “Singin’ in the Rain,” “Rocky,” “Silence of the Lambs” and “Pink Panther.”
MGM also shares the film rights of the James Bond franchise with Eon Productions—a holding company owned by the Wilson/Broccoli family—which will retain creative control over the spy film series.
MGM operates a TV studio—that has produced several hits like “The Handmaid’s Tale” and “Fargo”— along with the premium cable channel Epix.
The announcement notes that the deal will be completed after “regulatory approvals.”
“MGM has a vast catalog with more than 4,000 films. . . that have collectively won more than 180 Academy Awards and 100 Emmys,” said Mike Hopkins, Amazon’s senior vice president of Prime Video and Amazon Studios in the release. He described the “real financial value behind this deal” as the “treasure trove” of intellectual property they “plan to reimagine and develop together with MGM’s talented team.”
The deal is the second-largest acquisition in Amazon history, second only to the $13.7 billion the company paid for Whole Foods in 2017. MGM’s acquisition comes at a time when Amazon is looking to beef up its video streaming offering to compete with the likes of Netflix and Disney. Its streaming service, Prime Video, is a key part of the e-commerce giant’s Prime subscription service which also offers free two-day shipping, music streaming and a host of other services. In its 2020 annual report published last month, the company disclosed that it had spent $11 billion on producing TV shows, movies and music for Prime. This was a sharp rise from the $7.8 billion the company had spent on media back in 2019. Earlier this year, Amazon also signed a 10-year deal—estimated to cost $1.3 billion per year—with the NFL for exclusive broadcast rights to Thursday night football games starting in 2023.
Amazon’s decision to acquire MGM comes hot on the heels of another major Hollywood tie-up in which AT&T agreed to spin off its media division WarnerMedia and merge it with Discovery in a $43 billion deal. That deal, if it goes through, aims to create a global streaming giant to take on the likes of Amazon, Disney and Netflix.
Source: Forbes
Image Source: Getty Images
