Amazon is in talks to acquire MGM, the film studio behind the James Bond franchise, for about $9bn, according to people familiar with the matter.
After a wave of mega-consolidation, MGM is one of the few Hollywood studios not to have been gobbled up by a larger conglomerate, with Warner Bros operating within AT&T; Fox under Disney; Universal within Comcast; and Paramount inside ViacomCBS.
That sector consolidation was reignited on Monday with the merger of Discovery and WarnerMedia, as traditional media groups race to build more scale to compete with big technology companies in an entertainment business ruled by online streaming.
Like other movie studios, MGM has been hit hard by the coronavirus pandemic. As cinemas have remained largely empty in the US and Europe over the past year, MGM postponed releasing the blockbuster Bond film No Time To Die four times.
With the movie on hold and Covid-19 surging last autumn, Netflix held talks with MGM about acquiring No Time To Die for a streaming release, but the price the studio wanted became prohibitively expensive, said people familiar with the matter. It is scheduled for a cinema release on September 30 in the UK and October 8 in the US.
MGM has an expansive library of movies and shows, including Fargo, The Handmaid’s Tale and the Hobbit and Bond franchises.
MGM’s biggest shareholder is hedge fund Anchorage Capital, which began buying the studio’s debt in 2010 as part of a bankruptcy plan in the wake of the financial crisis. MGM reported net income of $29m on $403m in revenue in the first quarter.
Amazon declined to comment. MGM did not respond to a request for comment.
The ecommerce giant is in the middle of recharging its entertainment plans, after last week telling staff that Jeff Blackburn, a longtime lieutenant of chief executive Jeff Bezos, would return to the company to run a new “Global Media & Entertainment organisation”. The unit will incorporate the breadth of Amazon’s entertainment content, from the Prime Video service to the games streaming site Twitch.
Last year, Amazon spent $11bn on creating, acquiring or licensing music and video content for Prime subscribers, up from $7.8bn in 2019. The company has also been busy acquiring rights for live sport, including a deal with the NFL, worth about $1bn per year, to broadcast Thursday Night Football.
In a recent letter to shareholders, Bezos announced Amazon had surpassed 200m Prime members.
The Information first reported on Amazon’s talks with MGM.
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