Amazon agrees to buy MGM in move to widen its entertainment offerings [View all]
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/
Breaking. Short article. ETA - Now updated.
Original article -
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.
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