In a major development for the media industry, Amazon has acquired MGM Studios for USD 8.5 billion, in a move that brings the film and TV studio giant under its umbrella.
The deal was announced first in May last year, with Amazon stating that the vast library of content owned by MGM was a major reason for the purchase. After the purchase was announced to the media, Amazon founder Jeff Bezos said that the company will utilize the talent at both MGM and Amazon to reimagine IP for the 21st Century.
The library owned by MGM includes more than 17,000 TV episodes and 4,000 movie titles. Some of these include hugely popular franchises like Rocky, The Silence of the Lambs, and TV shows like Survivor. The deal has made headlines for the fact that the James Bond franchise is also part of the transaction.
MGM brings almost a century of experience to the deal
Mike Hopkins, Senior VP, Amazon Studios said in a statement that MGM has almost a 100 years’ worth of producing entertainment, and that Amazon shared their commitment to deliver a wide range of television shows and films to a global audience. He also said that Amazon welcomed MGM creators, talent and employees, and looked forward to work together to continue creating and delivering high-quality content to audiences.
Amazon closed the deal after US Federal regulators failed to challenge it in a pre-specified window. Significantly, the Biden administration has warned that it can challenge deals even after they are completed. European regulators meanwhile said that he deal would not significantly reduce competition, and that there are limited overlaps between the two companies.
Citing that Amazon would get unwarranted market-share and pricing power since it would be a producer and distributor of content as well as media devices like the Amazon Fire stick, labor groups in the US had urged the FTC to challenge the acquisition. Earlier this year, regulators had stated that they would be aggressive about challenging mergers. The regulators however, missed the window to challenge the Amazon deal, as also the WarnerMedia deal with Discovery last year.
Since the announcement of the deal closure, the focus will now shift to the way Amazon intends to run MGM which will join Amazon Studios and Prime Video in its bouquet. Before the purchase of MGM, Amazon has spent a total of USD 13 Billion on music and video content in 2021.
COO for MGM, Chris Brearton said in a statement that the company is excited to join the Amazon family, with it’s collection of iconic brands, legendary films and TV shows, and incredible creative partners. He also said that MGM was responsible for producing some of the most well-known films and TV shows of the last century, and was looking forward to doing the same after coming together with Amazon Studios and Prime Video. Brearton said the new partnership would endeavor to provide the best in entertainment for many years in future.
