Jeff Bezos Says MGM Deal Thesis Simple: Intellectual Property

Amazon CEO Jeff Bezos said Wednesday that the reason the tech giant plans to acquire MGM is simple: its trove of beloved content.

“If you saw this morning’s announcement, we are looking forward to welcoming MGM to the Amazon fold,” Bezos told shareholders at the company’s previously scheduled annual meeting.

“We are really excited about MGM,” the founder and outgoing CEO said, touting the studio’s library of more than 4,000 films and 17,000 TV shows.

“The acquisition thesis here is really very simple. MGM has a vast, deep catalog of much beloved intellectual property. And with the talent at Amazon and the talent at MGM Studio, we can reimagine and develop that IP for the 21st century. It will be a lot of fun work and people who love stories will be the big beneficiaries.”

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Bezos also announced that Andy Jassy, head of fast-growing Amazon Web Services, will take the CEO reins July 5 as Bezos segues to the role of executive chairman. The Amazon founder was going to step aside sometime in the third quarter but a date had not been set.

Bezos spoke today during a Q&A, taking a handful of shareholder questions, one on MGM. He seemed pleased, but his comments — the first mention of the $8.75 billion deal — came towards the end of an event that lasted more than an hour and after presentations by multiple top-level executives. That’s a reflection of the fact that the century-old studio is becoming a small piece of a massive company. Content on Prime Video is one tool that’s helping drive subscribers to Amazon Prime, a motor of the e-commerce giant’s growth. Streaming competition is fierce and unlike studio-backed rivals, Prime Video didn’t have a big library.

People close to Amazon have said the company will continue to release movies in theaters. As for one very prized piece of IP, Eon bosses Barbara Broccoli and Michael G. Wilson released a statement saying that they “are committed to continuing to make James Bond films for the worldwide theatrical audience.”

During the first part of the annual meeting, shareholders slammed the company, alleging racism, sexism, union busting and privacy violations.

After months and weeks of speculation, Amazon and MGM are merging in a deal that has the e-commerce giant acquiring the storied studio for $8.45 billion. Amazon didn’t give a timetable for closing but said the combination will need regulatory approval.

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