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.
It’s the first groundbreaking deal in a long anticipated marriage of the era’s big tech players and Hollywood, sparked by a digital revolution in content and the explosion of streaming. The pact, which will recast Prime Video, is the second mega-merger in as many weeks following the planned combination of AT&T’s WarnerMedia and Discovery.
Amazon declined to comment beyond the release but a person close to the company said, as Deadline reported Friday, that it intends to continue MGM’s theatrical releases and looks forward to MGM’s fan-favorites hitting theaters.
The announcement this morning is pretty bare bones and there’s no press briefing planned. It’s early days and the Seattle company didn’t address some big issues including the structure of a merged leadership or the future of Epix.
Amazon is holding its annual shareholder meeting today at noon and is bound to get some questions about the purchase. The pricetag, while no sweat for a company with a $1.6 trillion market cap, is still a hefty for the studio and a triumph for MGM chairman Kevin Ulrich, whose Anchorage Capital has been a major investor for a decade.
Bezos, at Amazon’s last quarterly earnings in late April, gave Prime Video a shout out as it turned 10. He said over 175 million Prime members had streamed shows and movies over the past year and that streaming hours are up more than 70% year-on-year. Amazon Studios garnered 12 Academy Award nods and two wins, he noted, touting upcoming originals Tom Clancy’s Without Remorse, The Tomorrow War and The Underground Railroad. (Bezos is stepping down as CEO of Amazon later this year for the new title of executive chairman, handing the reins to Andrew Jassy, who runs Amazon Web Services.)
Amazon did note MGM’s nearly century-long history of filmmaking and said it complements the work of Amazon Studios, which has mostly focused on television production. “Amazon will help preserve MGM’s heritage and catalog of films, and provide customers with greater access to these existing works. Through this acquisition, Amazon would empower MGM to continue to do what they do best: great storytelling,” the Jeff Bezos-founded company said.
“MGM has a vast catalog with more than 4,000 films—12 Angry Men, Basic Instinct, Creed, James Bond, Legally Blonde, Moonstruck, Poltergeist, Raging Bull, Robocop, Rocky, Silence of the Lambs, Stargate, Thelma & Louise, Tomb Raider, The Magnificent Seven, The Pink Panther, The Thomas Crown Affair, and many other icons—as well as 17,000 TV shows—including Fargo, The Handmaid’s Tale, and Vikings—that have collectively won more than 180 Academy Awards and 100 Emmys,” said Mike Hopkins, senior VP of Prime Video and Amazon Studios. “The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team.”
“It has been an honor to have been a part of the incredible transformation of Metro Goldwyn Mayer. To get here took immensely talented people with a true belief in one vision. On behalf of the Board, I would like to thank the MGM team who have helped us arrive at this historic day,” said Ulrich.
“I am very proud that MGM’s Lion, which has long evoked the Golden Age of Hollywood, will continue its storied history, and the idea born from the creation of United Artists lives on in a way the founders originally intended, driven by the talent and their vision. The opportunity to align MGM’s storied history with Amazon is an inspiring combination,” he added.
The companies didn’t anticipate when they expect the deal to close but noted that it’s subject to regulatory approval.