The deal is the second largest acquisition in Amazon’s history Purchase of $ 13.7 billion of whole foods in 2017.
Amazon hopes to leverage MGM’s storied film history and extensive catalog of 4,000 films and 17,000 TV shows to bolster Amazon Studios, its film and TV division.
“The real financial value behind this deal is the intellectual property treasure in the vast catalog that we are working with the talented team at MGM to redefine and develop,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and offers so many opportunities for high quality storytelling.”
In a statement, Kevin Ulrich, Chairman of MGM said, “The opportunity to align MGM’s history with Amazon is an inspiring combination.”
Amazon’s stocks barely moved on the announcement.
Amazon’s Largest Acquisitions by Business Size.
The deal underscores Amazon’s willingness to spend big bucks to stay competitive in the crowded streaming market. Amazon, Netflix, Disney and other video streaming services have tried to upgrade their content libraries to attract subscribers, allocating billions to content licensing and original programming development.
At the same time, the media juggernauts were further consolidated to achieve greater scalability to take on Amazon and Netflix. discovery $ 43 billion deal to merge with WarnerMedia after splitting off AT & T., announced last weekis the newest sign of it.
Amazon has a long time was ready to make large investments on video content as a strategy to promote Prime memberships, which now total more than 200 million worldwide. It spent $ 11 billion for video and music content last year, up from $ 7.8 billion in 2019. CEO Jeff Bezos argued that These investments reinforce Amazon’s “flywheel effect” by attracting more Prime subscribers, who in turn tend to spend more on the website.
Amazon has had hits in both film and television programs including “The Big Sick” and “Manchester By The Sea”, 2017 Oscar winners for Best Original Screenplay, as well as the series “The Marvelous Mrs. Maisel” and “Transparent”. “”
Another closely watched project, an adaptation of Lord of the Rings, is currently in production. “Lord of the rings” has a first season price tag from $ 465 million, making it probably one of the most expensive television series of all time.
Amazon has also made an aggressive push into sports content and signed a deal with the NFL in May Thursday Night Football will be broadcast from 2022.
Amazon has an experienced agent in Hollywood. The Company announced last week Jeff Blackburn, former lieutenant of Bezos, would be brought back to oversee a new global media and entertainment division that groups their entertainment offerings under one heading, including Prime Video, Amazon Studios, the music and podcasting business, Amazon Games and Twitch .
James Bond wears Tom Ford’s knitted sleeved bomber jacket
Courtesy of Sony
MGM will make Amazon’s TV and movie library even more robust. The Hollywood studio owns the James Bond catalog and has made several hit shows including “The Handmaid’s Tale” and “Fargo”. It also owns the premium cable network Epix and several popular reality television shows including “Shark Tank”, “Survivor” and “The Real Housewives”.
MGM, a private company, has been looking for a buyer for several years. Owners include Anchorage Capital, Highland Capital Partners, Davidson, Kempner Capital Management, Solus Alternative Asset Management, and Owl Creek Investments – funds that took control of the studio when it went bankrupt in 2010.
The MGM deal could exacerbate antitrust concerns for Amazon. The company is currently under investigation by several federal agencies, attorneys general and the European antitrust watchdog. The House of Representatives Antitrust Subcommittee released a comprehensive report last October that found Amazon has monopoly power via third-party providers on its marketplace.
The announcement of the takeover comes one day after new antitrust claims have been made against Amazon. On Tuesday, DC Attorney General Karl Racine announced He is suing Amazon on antitrust grounds, claiming the company’s pricing deals with third-party sellers wrongly raised prices for consumers and undermined competition. Amazon backed up against the claims, saying sellers set their own prices for their products in its marketplace.
Correction: An earlier version had the wrong announcement date in a reference.
– CNBC’s Alex Sherman contributed to this report.