Amazon to Buy MGM For $8.45 Billion

The deal represents Amazon’s biggest foray to date into the content game

Diane Haithman

Photo montage by TheWrap (Photos: MGM; Warner Bros.)

Amazon will acquire MGM for $8.45 billion, the companies announced Wednesday.

The deal represents tech giant Amazon’s biggest entry into the entertainment content business, as well as its second-largest acquisition behind its $13.7 billion deal to buy Whole Foods in 2017.

“MGM has a vast catalog with more than 4,000 films—”12 Angry Men,” “Basic Instinct,” “Creed,” “James Bond,” “Legally Blonde,” “Moonstruck,” “Poltergeist,” “Raging Bull,” “Robocop,” “Rocky,” Silence of the Lambs,” “Stargate,” “Thelma & Louise,” “Tomb Raider,” “The Magnificent Seven,” “The Pink Panther,” The Thomas Crown Affair” and many other icons—as well as 17,000 TV shows—including “Fargo,” “The Handmaid’s Tale,” and “Vikings”—that have collectively won more than 180 Academy Awards and 100 Emmys,” Mike Hopkins, senior vice president of Prime Video and Amazon Studios, said in a statement on Wednesday. “The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team. It’s very exciting and provides so many opportunities for high-quality storytelling.”

“It has been an honor to have been a part of the incredible transformation of Metro Goldwyn Mayer. To get here took immensely talented people with a true belief in one vision. On behalf of the board, I would like to thank the MGM team who have helped us arrive at this historic day,” Kevin Ulrich, chairman of MGM’s board of directors, added. “I am very proud that MGM’s Lion, which has long evoked the Golden Age of Hollywood, will continue its storied history, and the idea born from the creation of United Artists lives on in a way the founders originally intended, driven by the talent and their vision. The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”

Amazon’s acquisition of MGM is subject to regulatory approvals and other customary closing conditions.

The deal follows more than a week of news reports that Amazon was on the verge of completing an acquisition of MGM. The reported price tag was $9 billion. Rumors had been swirling since December that MGM was exploring a sale with an asking price of a reported $5.5 billion, with the 97-year-old studio generally assumed to be pinning its sale hopes on the value of its legacy library that includes the James Bond and Rocky franchises.

As one of Hollywood’s oldest studios, MGM holds one of the largest film archives in the industry. Along with the James Bond and “Rocky” franchises, MGM produces the TV hits “The Handmaid’s Tale” and “Vikings,” as well as reality shows “Survivor” and “The Voice.” The studio’s library includes 4,000 film titles and 17,000 hours of TV programming, all catnip to media companies looking to feed their hungry streaming services with content.

The deal comes on the heels of AT&T’s recent deal to spin off WarnerMedia in a merger with Discovery, another indicator of the need for companies with streaming services to gobble up smaller studios or content libraries to feed the streaming beast.

Along with its extensive film and TV library, MGM also owns premium cable network Epix, which earlier this year expanded its partnership with Paramount to make films licensed to the network available on Paramount+.In 2019, the studio grossed just over $23 million at the domestic box office, with thepandemic-delayed 25th Bond film “No Time to Die” slated for an October release in theaters.

Not only does Amazon — with a market cap of more than $1.6 trillion —have deep pockets, but gaining access to MGM’s content is in keeping with its voracious appetite for building its media division. Amazon spent $11 billion in 2020 on movies, TV shows and music for its Amazon Prime service. The company had also recently arranged for Jeff Blackburn, who had left the company in February, to return next month as SVP of a new media division that will include all of the company’s media services, including Amazon Prime, Twitch, Audible, and Amazon Studios.

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