Amazon is nearing a deal to buy Hollywood Studio MGM Holdings for almost $9 billion, according to reports. In the decade since its declared bankruptcy, MGM has been owned by a collection of hedge funds and holding companies, and began exploring a sale in December. Potential buyers have been wary of the movie and TV studio’s asking price over the years, but talks with Amazon have been growing since the start of the year.
MGM has evolved in a number of directions since its founding in 1924 and houses an impressive number of assets as a result of the diversification of the company’s projects. The movie studio behind titles such as James Bond, Fargo, and The Handmaid's Tale holds an attractive catalog for streaming services vying for beloved branded content in their library. However, due to complications involved with rights to some films being shared or split, the sale of MGM doesn’t come down to a simple acquisition of a single studio.
According to The Wall Street Journal, talks between Amazon and MGM Holdings have escalated this week, making it probable that the tech giant will buy the Hollywood studio for close to $9 billion. Although there is not yet a guarantee of the sale, people close to the situation have provided some insight into the deals that have taken place behind closed doors, including the fact that the MGM board was briefed on the matter on Sunday night. Check out The Wall Street Journal's tweet below:
Not only would the acquisition of MGM by Amazon be a major foray by a tech company in Hollywood, the deal would mark Amazon’s second largest purchase in company history, only behind Whole Foods in 2017. The deal comes after a number of pandemic-related factors that have changed the game for MGM. In 2018, the company ousted their Chief Executive, Gary Barber, for having unsanctioned conversations with Apple, leading to a drop in the price of shares. Yet, although production took a hit at the onset of the pandemic, MGM’s already-established library proved to be in demand for people bored at home. It is no surprise that the uptick in earnings has generated new interest for potential buyers, including Amazon.
Hollywood has seen a rapid rise in media consolidation this year, and the acquisition of MGM by Amazon would be another in a growing list that includes the negotiations between AT&T and Discovery, which were announced last week. These private discussions and deals make it impossible to anticipate how the media landscape is going to continue to change in upcoming years, even blindsiding individuals who are directly affected by the deals. MGM has been in unsteady hands for years, and as companies that were once on the sidelines now enter the race, the deal with Amazon has the potential to affect how people consume media forever.
Source: The Wall Street Journal