Amazon At Altar With MGM?

Amazon MGM
Amazon MGM

In the wake of the surprise $43 billion merger between Discovery and AT&T’s WarnerMedia, rumors are racing that Amazon is poised to scoop up MGM in a deal that is reportedly worth under $10 billion.

Much of this coming from a speculative report Monday in The Information. Deadline separately hears from sources that there’s been a weeks of talks between the tech giant and the Hollywood studio that included sales presentations. MGM declined to comment on rumors, and Amazon did not respond. We’re awaiting more intel at the time of this report.

Rumors have been afloat for years that the 007 studio has been up for sale. Days before Christmas last year, a WSJ report surfaced that MGM had tapped Morgan Stanley and LionTree to explore a sale. At the time, rumors were swirling that another tech giant, Apple, was interested in acquiring the studio. MGM had been seeking $10 billion-plus, a price tag considered too high by a number of potential suitors who have been going off a $6 billion valuation for the company.

According to sources, speculation intensified late last week that an Amazon-MGM deal was imminent. The announcement of the AT&T-Discovery pact appeared to have slowed the momentum of the talks since, so it is unclear whether they will lead to an agreement.

What would Amazon be getting? One of the deepest film libraries, which boasts over 5,200 titles, 17,000 hours of TV, 177 Oscar wins, 12 Best Picture winners, the James Bond franchise that has grossed over $7 billion in its global B.O. lifetime, and the Rocky and Creed movies which have together earned more than a $1 billion. There’s also the Epix pay TV network, of which MGM took full ownership in 2017, buying out the stakes of Paramount and Lionsgate. There’s also Emmy-winning series such as The Handmaid’s Tale, Fargo and Survivor among its big TV assets. The rights to the James Bond franchise are owned by EON Prods.

MGM has been a big believer in theatrical, postponing its 007 title No Time to Die, Daniel Craig’s final pic as James Bond, from Easter 2020 all the way to October 8 of this year due to the pandemic. The studio is waiting for all global markets to be fully back online for the film, which many believe could be a $1 billion box office-grossing success. That said, MGM did entertain offers from streamers for the pic that they ultimately declined.

Meanwhile, Amazon in the wake of its double-digit million Sundance 2019 acquisitions like Mindy Kaling’s Late Night and Brittany Runs a Marathon has switched over to a truncated theatrical window (of one to three weeks) for its movies before they hit Amazon Prime. The streamer’s Oscars contenders One Night in Miami had a three-week theatrical window while Sound of Metal was two weeks. The streamer’s big pic acquisitions Coming 2 America and Without Remorse were respectively released in a handful of theaters during their first weekend on the service.

While Amazon has its own distribution and marketing arm, MGM promotes and releases its movies through United Artists Releasing. which is a joint venture with Annapurna boss Megan Ellison. She has been contributing heavily to that j.v. and the question becomes whether her portion gets bought out by Amazon or whether she takes back the reins on the distribution/marketing ops.

MGM’s financial statements reportedly show $1.496 billion in revenue last year, up from $1.18 billion in 2016. MGM’s biggest shareholder is hedge fund Anchorage Capital, whose founder, Kevin Ulrich, is chairman, and has been leading the sales effort. Amazon recently hit 200 million Prime members, 175 million of which streamed content in the last year.

Former New Line-DreamWorks-Sony executive and Fifty Shades of Grey producer Michael De Luca joined MGM in January last year to turn the studio around, and active it certainly was during the pandemic when several other studios pulled back their activity. MGM acquired such packages as the Ridley Scott-directed Gucci movie that has Lady Gaga playing convicted murderer Patrizia Reggiano, in a film that also has Adam Driver, Jared Leto, Al Pacino, Jack Huston and Reeve Carney. MGM also picked up from Focus in turnaround Paul Thomas Anderson’s next film, as well as the Ron Howard-directed Thai Cave rescue pic Thirteen Lives. They also optioned the Ta-Nehisi Coates novel The Water Dancer with Oprah Winfrey and are working on a Pink Panther reboot and another Creed sequel.

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