Amazon is in Negotiations to Buy MGM (Metro-Goldwyn-Mayer Studios Inc.) for $9 Billion

Amazon in Negotiations to Buy MGM for $9 Billion

Amazon is close to closing a deal to buy Metro-Goldwyn-Mayer Studios Inc. and its entire media library. If the deal goes through for the purported price tag of $9 billion (the deal is currently in the $7-10 billion range), Amazon Prime Video would become the streaming home of every movie and TV series that MGM owns.

Some of those movies include: Rain Man, Dances with Wolves, The Silence of the Lambs, Robocop, the Rocky film franchise, the Creed film franchise, and the Legally Blonde film franchise to name a few.

The James Bond film franchise would also be in the mix, which is interesting because MGM had been considering selling the rights to stream No Time to Die to Amazon or another potential streamer for an exuberant price. Now it seems Amazon may get the right to stream every James Bond film, including No Time to Die, in a gigantic bundle deal.

Regarding TV shows, some of those TV shows included in the potential Amazon / MGM deal include: Vikings, Survivor, Stargate, Fargo, and Teen Wolf.

If the sale goes through, it would be a dramatic boon to Amazon, its streaming platform, and the value Amazon provides to its Prime customers. The deal would bring over 4,000 movies and 17,000 hours of television show viewing time to the streaming service. It would also provide Amazon with what is most valuable to a streaming service – exclusive content that can be obtained no where else.

Outside of the Day 1 benefits the acquisition would have for Amazon, it would also have secondary value, namely remakes and TV shows based on their acquired films, new franchises, reboots, and “re-imaginings”, a clever term that means a soft reboot/remake.

I am not surprised Netflix did not put in a bid for MGM. With the debt they are currently holding for original content creation for this year and next year, where would Netflix get an additional $9 billion? Only one place I can think of – their subscribers. With the most recent monthly price increase in mind, that wasn’t happening.

Disney is not as cash rich as it used to be with their parks and movie theater revenue crippled because of the pandemic. Plus the majority of MGM’s content, if acquired, would only be viewable on Hulu. Because of the aforementioned factors, Disney not placing a bid for MGM makes perfect sense.

WarnerMedia is in the process of being sold off by AT&T. I don’t get the logic of that move but with AT&T’s debt, lowering their dividend, and the state of flux over there, AT&T was in no position (nor did they want to be) to buy MGM. AT&T is in the slow process of clearing their debt, hence the WarnerMedia sale. AT&T didn’t want to add to their debt (repeating multiple mistakes from their past) with another fruitless acquisition.

Apple is the enigma in this. Acquiring MGM would have made Apple TV+ a significant player in the streaming war theater. Instead, Apple TV+ will remain relegated to the back of the pack where it currently resides. Apple has the cash on hand. Why didn’t they put a bid in, a sizable one, for MGM?

If Amazon’s MGM acquisition goes through, Amazon will move up into the fourth slot when it comes to streaming services, behind Netflix, Disney+, and HBO Max.

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