Related Posts
Source: Variety
Although the name may not stand out nearly as much as the likes of Disney or Warner Brothers, there was a time when Metro-Goldwyn-Mayer Studios (often referred to as just MGM) was one of the crowning jewels of the Hollywood film scene. Having produced such staples of film history as the 1939 epic “Gone With the Wind”, the 1952 musical “Singin’ in the Rain”, and several of the action-packed cinematic endeavors of British spy James Bond, it’s hard to imagine what the current world of cinema would look like had it not been for the contributions of this legendary studio. However, over the past couple decades, MGM has gone through its fair share of financial struggles and continues to face difficulty in maintaining relevance in a rapidly evolving media landscape. It doesn’t even own the rights to many of its most iconic works, as media mogul Ted Turner purchased, then immediately resold the studio while holding on to the majority of its intellectual properties (most of which are now under the ownership of WarnerMedia). The ups and downs of this once beloved cornerstone of cinema have persisted ever since, and just recently, yet another possibility of it being bought out by a larger company came into existence.
According to sources claiming to have major ties to the film industry, the tech giant Amazon is said to have begun negotiations to purchase MGM, making an offer of about $9 billion in order to acquire the film studio. Although representatives from either Amazon or MGM have yet to publicly address these claims, sources suggest that Mike Hopkins, the senior vice president of Amazon Studio, the company’s own film distribution division, and Amazon Prime Video, its own personal streaming service, is currently discussing the potential acquisition with Kevin Ulrich, MGM’s current chairman of the board and one of the leaders of major MGM stakeholder Anchorage Capital.
In hindsight, news of MGM receiving new ownership should not be too much of a surprise, especially considering the studio has allegedly been seeking a new buyer for several months now. Reports that MGM had begun searching for a larger company to acquire it first began to appear in December of last year, and while there have likely been several potential bidders looking to incorporate the studio into its assets, Amazon has long been considered one of the most likely to so, and these recent developments make the chances of the tech giant buying MGM all the more likely.
Despite many reports that Amazon is willing to put up $9 billion in order to acquire MGM, some analysts believe the actual total could either be much lower or a bit higher. According to The Information, the deal could actually be anywhere between $7 billion or $10 billion, although some analysts claim that the studio and its assets aren’t worth much more than $5 billion, meaning that the final price could be much closer to this estimate. In any case though, purchasing the studio will require a financial transaction that the majority of companies in the nation might not be capable of participating in, although that’s hardly an issue for something like Amazon, which continues to rake in billions of dollars each year as one of the world’s most prominent industrial leaders. In fact, just last year, Amazon spent over $11 billion to acquire various films, television series, and music for its Prime division – an increase of 40% from the previous year – so even if Amazon does end up paying the largest sum possible for MGM, it will hardly be a fraction of what they are already spending on a regular basis.
What is surprising, however, is how small of a purchase this would be compared to other recent media purchases from major conglomerates. For comparison, AT&T spent over $85 billion in order to acquire WarnerMedia and all of the properties under its umbrella, and Disney shelled out $71 billion in its purchase of 20th Century Fox. Even CBS spent just over $12 million when it merged with Viacom (owner of Paramount Pictures), a total that just barely goes above what is currently being offered to purchase MGM. For a studio that has had such an important legacy, it is somewhat disappointing that its current value isn’t much larger than most would assume it deserves.
As the owner of the streaming platform Amazon Prime Video, it makes perfect sense that Amazon would want a major motion picture studio of its own to advertise its product. Over the past couple years, several different streaming services have either been introduced by major studios or partnered with major studios in order to obtain exclusive streaming rights to their most noteworthy titles. These include Disney+, the WarnerMedia owned HBO Max, and of course the biggest of the bunch Netflix, which recently made a deal with Sony Pictures to become the studio’s primary platform to release their films for streaming once their window of theatrical exhibition comes to an end. All of these services push a specific studio’s output as a means of advertising, and by acquiring MGM, and with it such titles as the Rocky franchise, “The Silence of the Lambs”, and “Stargate”, Amazon could start to do likewise and pass off a major studio as one of its own.
Then again, the idea of MGM being yet another component of a much larger corporation, as unsurprising as it may be in today’s day and age, does feel a little bit disappointing. After all, one would like to think that the studio that gave the world such classics as “The Wizard of Oz”, “Ben-Hur”, and “2001: A Space Odyssey” would shine bright throughout the decades as one of the powerhouses of Hollywood. History, however, has shown that maintaining such a pedigree is much easier said than done, and MGM’s inability to stay under the ownership of one company has resulted in the studio having a status in the film industry much lower than it once had. Whether or not Amazon will help or hurt MGM in the long run is uncertain, but whatever happens, it probably won’t be too out of place compared to what has already happened.
