Amazon is purchasing MGM in a blockbuster deal, and here's why MGM selling for more than Marvel and Star Wars combined isn't at odd as it seems. The last couple of decades have just been bursting with giant entertainment companies either merging with each other into one even bigger entity or one giant company being acquired by an even bigger one. Just some of these instances include NBC merging with Universal, which later was purchased by Comcast; AT&T buying Warner Bros, then more recently merging it with Discovery; and of course, Disney buying Fox's movie and TV assets.
The ink on the contracts for Warner Bros.' merger with Discovery was barely dry when reports surfaced that Amazon was in talks to buy legendary movie studio MGM, and sure enough, the massive deal was confirmed only a few days later. While many would argue giant media companies gobbling each other up is far from a good thing for consumers in the long run, it's a trend that looks unlikely to go away anytime soon.
One thing some fans have noticed is that Amazon bought MGM for a staggering $8.45 billion, which is more than the combined price that Disney paid to buy arguably its two most important assets today, Marvel and Star Wars. Disney bought Marvel in 2009 for $4 billion, then paid another $4 billion in 2012 to acquire Lucasfilm, with ownership of Star Wars being the main reason for doing that. The biggest thing to remember when comparing Disney's purchases of Marvel and Lucasfilm to Amazon's purchase of MGM is the timing involved, as well as the number of assets - it's not just James Bond at the forefront. Amazon can utilize MGM's library of IPs to jumpstart several iconic franchises on the big and small screen.
Today, consumers know Marvel Studios as being a hit factory, with each new MCU entry raking in hundreds of millions, if not billions in profit. However, it took a few years for Marvel Studios to become that kind of box office juggernaut. When Disney bought Marvel, only Iron Man and The Incredible Hulk were released, and the latter, while not an outright box office bomb, didn't perform up to financial expectations. Plus, the sale didn't include the screen rights to the X-Men and Spider-Man, two of Marvel's heaviest hitters, decreasing its value at the time.
As far as Lucasfilm goes, while the company had plenty of assets, none of the others even remotely compared to Star Wars, so that deal was essentially for Disney to acquire a single franchise, albeit a highly profitable one. While Disney also got the rights to make more Indiana Jones films, Paramount Pictures still retains distribution rights to the prior four, limiting Disney's opportunity to make money with that franchise.
By contrast MGM comes complete with a boatload of iconic IPs, not least of which is the James Bond franchise, which has earned over $7 billion theatrically worldwide just by itself. Then there's the Rocky/Creed franchise, also a billion-dollar property. Also part of the sale is the sprawling Stargate sci-fi franchise, RoboCop, The Silence of the Lambs, and even current TV hits like The Handmaid's Tale and Fargo. Combine all those with the absolutely massive overall content library MGM has, and Amazon now owns thousands of titles it can use to increase the appeal of Amazon Prime, or even license out to other streaming services if it chooses. For Amazon, the $8.45 billion was a wise investment.