Amazon and MGM said Thursday that their $8.5 billion deal has closed. The storied, nearly century-old studio — with more than 4,000 film titles, 17,000 TV episodes, 180 Academy Awards and 100 Emmy Awards — is now part of Amazon “and will complement Prime Video and Amazon Studios’ work in delivering a diverse offering of entertainment choices to customers,” Amazon said in its announcement.
Amazon Studios and streaming service Prime Video are led by Amazon’s Mike Hopkins. No news on management structure in terms of how the two studios will fit together; an Amazon spokesperson said the digital giant is planning to make offers and welcome all of MGM’s current employees.
It’s early days yet with the deal just closed this morning, but here’s what else could be gleaned about the new entity:
- In terms of production, Amazon is excited by MGM’s slate and doesn’t anticipate changes in release dates or on projects that are in progress.
- Amazon is not planning to make all MGM content exclusive to Prime Video.
- On theatrical, Amazon intends to continue supporting theatrical release, not as a one-size-fits-all proposition but something to be determine case by case.
- There are no plans to make changes to the Bond franchise.
“MGM has a nearly century-long legacy of producing exceptional entertainment, and we share their commitment to delivering a broad slate of original films and television shows to a global audience,” said Hopkins, whose title is SVP of Prime Video and Amazon Studios. “We welcome MGM employees, creators, and talent to Prime Video and Amazon Studios, and we look forward to working together to create even more opportunities to deliver quality storytelling to our customers.”
Amazon Studios and Prime Video are part of a larger Amazon division called Global Media & Entertainment led by Jeff Blackburn that includes Music, Podcasts/Wondery, Audible, Games, Twitch and other services. Blackburn, the longtime Jeff Bezos lieutenant, returned to Amazon in 2021 to take the new position.
Chris Brearton, chief operating officer of MGM, said, “We are excited for MGM and its bounty of iconic brands, legendary films and television series, and our incredible team and creative partners to join the Prime Video family,”
“MGM has been responsible for the creation of some of the most well-known and critically acclaimed films and television series of the past century,” he added. “We look forward to continuing that tradition as we head into this next chapter, coming together with the great team at Prime Video and Amazon Studios to provide audiences with the very best in entertainment for years to come.”
This morning’s news means the U.S. Federal Trade Commission declined, as expected, to sue to block the merger or impose conditions on the historic deal, which comes just as another mega-combo of WarnerMedia and Discovery gets set to close in April. The FTC deadline passed overnight.
Earlier this week, Amazon won unconditional EU antitrust approval for the merger when the European Commission decided it wouldn’t pose competition concerns in Europe.
The e-commerce giant with its massive market cap of $1.56 trillion acquired the century-old studio behind the James Bond and Rocky franchises from investors led by Anchorage Capital, whose founder Kevin Ulrich is chairman of MGM. This deal is the first in a long-anticipated marriage of deep-pocketed big tech players and Hollywood.
The price tag was considered high but is barely a ripple for the Bezos-founded e-commerce behemoth that is looking to MGM’s expansive library to recast the 11-year-old Prime Video streaming service. Prime Video helps fuel Amazon Prime, the biggest consumer loyalty program in the world and one that’s key to driving Amazon’s empire.
Amazon said last month that over 200 million Amazon Prime members worldwide streamed shows and movies on Amazon Prime in 2021. It just increased the price of an Amazon Prime membership in the U.S. for the first time since 2018 by $2 a month to $14.99, with annual memberships going from $119 to $139.
For an idea of scale, Amazon had sales of $470 billion for all of last year and $137 billion for the fourth quarter on profit, respectively, of $33 billion and $14 billion. Amazon shares are up a hair at $3,084 today. The company recently announced a 20-for-1 stock split for later this spring that will make individual shares more affordable.
Founder Bezos, announcing the deal, said it was driven by IP and promised to “help preserve MGM’s heritage and catalog of films, and to provide customers with greater access to these existing works.” Amazon will also “empower MGM to continue to do what they do best, great storytelling.”
Bezos has since stepped away from day-to-day operations at Amazon, which is now run by CEO Andrew Jassy, former head of Amazon Web Services. Amazon Studios is led by Jennifer Salke. On Wednesday, news came that co-head of film Matt Newman is going to Prime Video’s global Sports group to develop sports docuseries, movies and scripted fare. Julie Rapaport remains as Amazon’s Head of Movies.
Both sectors remain vibrant areas for Amazon, the former seeing the launch of Thursday Night Football in the autumn. Rapaport will continue to report into Amazon Studios’ boss Salke, while Newman will now report to Marie Donoghue, VP of Global Sports Video.
MGM’s motion picture group, led by chairman Michael De Luca and president Pamela Abdy, has had a great run recently with Paul Thomas Anderson’s widely nominated Licorice Pizza, House of Gucci and the latest Bond installment No Time to Die. Its library includes titles like 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 and The Thomas Crown Affair to name a few. Standouts in TV, overseen by Mark Burnett, include Fargo, The Handmaid’s Tale and Vikings.
Amazon nabbed three acting Oscar nominations this year for Aaron Sorkin’s Being the Ricardos for Nicole Kidman, Javier Bardem and JK Simmons, as well as a Best Makeup and Hairstyling nom for Coming 2 America.
In September, the streamer will launch the first of five planned seasons of The Lord of the Rings: The Ring of Power, an anticipated, epic and especially expensive television project, adding to series including The Underground Railroad, Jack Ryan, The Marvelous Mrs. Maisel, Fleabag, The Boys and others.
