Amazon agrees to buy MGM in move to widen its entertainment offerings

[BumRushDaShow]

Source: Washington Post




Amazon will buy MGM parent MGM Holdings from its investment-group owners, paying $8.45 billion to put the historic studio of “Rocky,” “The Pink Panther” and James Bond in the hands of the retailing giant. The move aims to bring much-needed assets to both sides. Like many recent Hollywood entrants, Amazon has struggled to locate the deep well of content enjoyed by Disney, Paramount and other traditional players. And like many traditional Hollywood players, MGM has struggled to keep up with modern Hollywood, in which deep pockets and digital distribution rule the day. Now the two entities are coming together, hoping they can achieve together what they have failed to do apart.

MGM is currently owned primarily by different investment groups, including the New York hedge fund Anchorage Capital, which controls 35 percent of the company and whose leader, Kevin Ulrich, chairs MGM’s board. The board has resisted overtures from traditional media companies in the past, with some feeling more could be done to monetize the properties internally. MGM also features an unusual chief executive structure — namely, it doesn’t have one. The role, which for years had been occupied by the veteran Hollywood producer Gary Barber, is now filled by a handful of the company’s division heads that compose MGM’s “office of the CEO.”

The $8.45 billion total is the second-largest dollar amount Amazon has paid for a company, behind its purchase of Whole Foods for $13.7 billion in 2017 but well ahead of acquisitions like Zoox, the autonomous-vehicle company, which Amazon bought for $1.2 billion last year. Left unclear in the tie-up is what management roles Jennfer Salke, who currently runs Amazon Studios, and Michael De Luca, the veteran producer installed as the head of MGM’s film group last year, would have in the combined entity. Either would likely report to Mike Hopkins, the former Sony Television executive Amazon hired last year to oversee the entirety of its Studios and Prime Video operations.

Also ambiguous is the theatrical future for new titles. MGM has a long-standing history in movie theaters, but Amazon has recently shied away from putting many of its releases in them. The deal brings together old and new, moneyed and cash-strapped, for what each side hopes could be a sum greater than its individual parts. It is an uncharacteristically older acquisition for Amazon, whose targets have generally been new firms and start-ups. In MGM, Amazon gains a key weapon to attract people to Prime Video, its entertainment subscription platform, just days after Warner Media sought to supercharge HBO Max by combining with unscripted powerhouse Discovery. Netflix and Disney Plus are the category leaders.

Read more: https://www.washingtonpost.com/nation/2021/05/26/amazon-agrees-buy-mgm-move-widen-its-entertainment-offerings/

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Breaking. Short article. ETA - Now updated.

Original article -

By Washington Post Staff
May 26, 2021 at 8:46 a.m. EDT

In a landmark marriage of tech and Hollywood, Amazon will buy MGM parent company MGM Holdings for $8.45 billion, the companies said Wednesday. The deal for the embattled studio — the second-priciest in Amazon’s history — gives the online retailer the rights to a raft of classic film properties in its bid to become a dominant entertainment player.

This is a developing story. It will be updated.

I think this was going to be a foregone conclusion.

[mpcamb]

1. Too big. Too much control.

[jimfields33]

2. True. But it was that or MGM go under

[melm00se]

25. Unless I am missing something

their finances don't look that bad.

I see this as more of a move to counter Discovery's move on Warner Media and others that we have not seen but are rumored.

[-misanthroptimist]

3. I guess eventually Amazon will own everything

Even now, it can be a bit difficult to avoid sending money their way. Many times, the alternatives aren't much or any better.

[BumRushDaShow]

4. Eventually these sorts of companies

"shed" some of their holdings to, as they write in marketing parlance, "focus on their core business".

I haven't kept track but I know at one time, MGM's older catalog of films had been bought by Ted Turner for his Turner networks (which included early stuff like "The Wizard of Oz" and "Gone with the Wind" ). I don't know if that ended up transferred with his eventual sale of some his stuff, but MGM (and pieces of it) have been moving around from place to place for some time.

[SoCalNative]

7. All of the classic MGM films

are now part of the Warner Brothers library. Amazon won't be getting those. They'll get the Bond films and some others, but not the classics catalog.

[BumRushDaShow]

9. Yeah I had just done a search to see what happened

AT&T got it with the Warner acquisition (and much of that still airs on TCM, which got rolled into the conglomerate). And of course, I am guessing Amazon made the move because AT&T had this announcement recently -

AT&T announces $43 billion deal to merge WarnerMedia with Discovery

Published Mon, May 17 20217:09 AM EDT Updated Mon, May 17 20214:03 PM EDT

Steve Kovach Sam Meredith


Telecom giant AT&T announced Monday a deal to combine its content unit WarnerMedia with Discovery, paving the way for one of Hollywood’s biggest studios to compete with media giants Netflix and Disney. Under the agreement, AT&T will unwind its $85 billion acquisition of Time Warner, which closed just under three years ago and form a new media company with Discovery. The deal would create a new business, separate from AT&T, that could be valued at as much as $150 billion, including debt, according to The Financial Times.

AT&T said it would receive an aggregate amount of $43 billion in a combination of cash, debt and WarnerMedia’s retention of certain debt. AT&T shareholders would receive stock representing 71% of the new company, while Discovery shareholders would own 29%, it added.

If approved by regulators, the deal effectively reverses AT&T’s years-long plan to combine content and distribution in a vertically integrated company. The companies said the deal is expected to close in the middle of 2022. Shares of Discovery were up as much as 9% Monday morning before falling 5% at the end of regular trading. AT&T’s stock price fell 2%.

AT&T said Discovery President and CEO David Zaslav will lead the new company, which will have a new name announced in coming days. The board would consist of 13 members, seven initially appointed by AT&T including the chair, and Discovery would appoint six members, including Zaslav. “It is super exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity,” Zaslav said, adding that AT&T and Discovery’s assets “are better and more valuable together.”

https://www.cnbc.com/2021/05/17/att-to-combine-warnermedia-and-discovery-assets-to-create-a-new-standalone-company.html

Of course with that, AT&T might start breaking up some of that Warner stuff per the above article.

[melm00se]

24. This has been repeated over and over again

throughout history.

I remember hearing/reading that

The Japanese will own everything(they didn't).
Walmart will own everything (they don't).
America will own everything (we don't).
The VOC would own everything (they didn't).
The BEIC would own everything (they didn't).

Every company/country eventually steps in it and they lose their pre-eminent position.

[-misanthroptimist]

27. We can only hope, I guess.

[LudwigPastorius]

28. "Every company/country eventually steps in it and they lose their pre-eminent position."

...yet the 1% not only maintain their wealth and influence, but grow it.

[FakeNoose]

5. It was my Amazon Prime membership that made this possible

I'm fine with this, as long as it means the old library of MGM movies will still be available and preserved for future generations. It's better than selling to an international buyer, or to a buyer that doesn't have the resources or the good intention to maintain the archive. Amazon has both.

Thank you Jeff Bezos!

[SoCalNative]

8. Again

the classic MGM films have been owned by Warner Brothers for quite some time, after Ted Turner sold off his company/assets to Time Warner.

[BumRushDaShow]

10. Per my post above

that stuff is now owned by AT&T and with their announcement of an attempted merger with Discovery, it might be interesting what they do with their Warner holdings (seems they are suggesting spinning that whole "entertainment" piece of their biz off since they are supposed to be a telecom company ).

[LiberatedUSA]

6. The first things the aliens will see when we get close to...

...their planet, will be all the Amazon sponsored adds playing in giant high def holograms all around the ship.

“Free shipping for a year if you invite us down, learn our language and sign up.”

[exboyfil]

11. MGM does not have outright control of Bond

They have a current distribution deal with Eon. The Broccoli family controls the IP.

[turbinetree]

12. More tax write off BS......

for a company that already pays nothing in taxes....and is trying to get to the moon....

[PoliticAverse]

13. "in move to world domination". n/t

[Calista241]

14. WTB more Stargate SG1 and Stargate Atlantis.

Hoping Amazon invests in these shows.

[Bayard]

15. They are becoming a monster

Although, they still get plenty of my money.

If you get a chance, read--"The Store", by James Patterson. The future of Amazon.

[Auggie]

16. Content is king. And it's a lot cheaper to buy existing stuff than create new.

[keithbvadu2]

17. Thinking of::: RoboCop - Omni Consumer Products

[LudwigPastorius]

29. Ironically, with this deal, RoboCop is now one of the intellectual properties owned by Amazon.

I'm not a huge fan of those movies, I'd watch a rebooted series of it in the vein of Battlestar Galactica...dropping the camp elements and perhaps making it more of a social commentary on the current state of policing in this country.

[Yavin4]

18. Other tech companies that were going to take over the world: IBM, AT&T (Ma Bell), Microsoft....

AOL
Google
Facebook
And now, Amazon.

I remember when AOL bought Time Warner, and everyone freaked out at the time. Today, most people don't even know what AOL is.

This is a nothing burger deal. MGM is pretty worthless, other than James Bond. I doubt that Amazon is going to put much money into reviving the studio.

[BumRushDaShow]

20. "MGM is pretty worthless, other than James Bond"

Don't discount the "Rocky" franchise. And as a born and bred Fluffian, I *still* haven't seen the whole first film after all this time, let alone any of the 7 subsequent sequels!

But I did drive by this to and from work everyday -



(someone threw a mask on it last year)

Every day someone (or many someones) run up those Art Museum steps.



(and the entire skyline has changed over the past 45 years )

[Deminpenn]

19. Wonder if Amazon isn't heading toward the same fate of

Standard Oil.

[greenjar_01]

21. Doesn't MGM own The Apprentice? So now, like, Bezos owns the Apprentice?

[Mr.Bill]

22. At least Amazon isn't trying to buy Congress

like the Koch Brothers.

[Jose Garcia]

23. MGM owns The Apprentice

Gonna be hilarious if Bezos releases the outtakes.

[bucolic_frolic]

26. Thus far investing in the Couch Potato Society has been quite profitable

even if many citizens are listless, thoughtless, and obese