Amazon completed its $8.5 billion acquisition of MGM, officially taking over the film and television studio.
This landmark deal was first announced last May, when the company cited MGM’s extensive library as the driving force behind the purchase. “With the talent at MGM and the talent at Amazon Studios, we can reimagine and evolve this intellectual property for the 21st century,” Amazon founder Jeff Bezos said after the purchase announcement.
MGM’s library includes over 4,000 film titles and 17,000 television series, including intellectual property such as the Rocky/Creed franchise, The Silence of the Lambs, Thelma & Louise, and television shows such as The Handmaid’s Tale and The Revenant “. Notably, it also includes MGM’s share (with Eon Productions) of the James Bond franchise.
“MGM has a nearly century old heritage of producing exceptional entertainment, and we share their commitment to bringing a wide range of original films and TV shows to a wide audience,” Mike Hopkins, senior vice president of Prime Video and Amazon Studios, said in a statement. “We welcome MGM staff, creators and talent to Prime Video and Amazon Studios and look forward to working together to create even more quality storytelling opportunities for our clients.”
The closing of the deal came after U.S. regulators closed the window for challenging it, though the Biden administration has warned companies that it reserves the right to challenge some deals even after they’ve been completed. European regulators signed off on the merger earlier this week, writing in their approval that the deal “won’t significantly reduce competition” and that “matches between Amazon and MGM are limited.”
In the US, some working groups have asked the FTC to challenge the acquisition, arguing that Amazon’s status as a producer and distributor of content, as well as devices such as the Amazon Fire products, would give it undue market share and price power.
Earlier this year, the federal antitrust authorities signaled they planned to act aggressively with regard to merger challenges. However, as time is running out for both the Amazon-MGM deal and the WarnerMedia-Discovery deal, their focus may be elsewhere.
With the deal closed, the focus will now turn to how Amazon plans to manage MGM, which will join Jennifer Salke-led Amazon Studios and Prime Video in the tech giant’s entertainment arsenal.
Questions include how Amazon plans to structure Amazon Studios and MGM, which share overlapping functions. While Amazon Studios is more focused on TV, both divisions produce movies and TV shows. Michael De Luca oversees MGM’s film production, while Mark Burnett heads up the television division.
There is also the question of whether Amazon will make traditional theatrical releases for future MGM projects (Amazon Studios has produced many of its original theatrical releases). And then there’s Epix, MGM’s pay TV and streaming service. With Amazon hosting its own premium streaming service on Prime Video, as well as a free ad-supported service on IMDb TV, it’s unclear if Epix has an obvious role in the combined company, although distribution is handled by cable and satellite TV. the operators may thwart any attempt to translate it for streaming only.
Amazon has been investing heavily in entertainment assets in recent years, and according to the company, more than 175 million Amazon Prime subscribers have watched its movies or TV shows.
Its original shows have included The Marvelous Mrs. Maisel and The Wheel of Time, and the company is spending $500 million on the first season of an upcoming Lord of the Rings adaptation. His films have included mainstream films such as Borat’s Follow-up Film and award-winning films such as One Night in Miami.
The company has also spent heavily buying exclusive content from others, including Paramount’s Coming 2 America and a new deal with the NFL for exclusive rights to Thursday night football.
In total, the company spent $13 billion on video and music content in 2021. And that was before the MGM purchase.
“We are delighted that MGM and its many iconic brands, iconic films and television series, and our incredible team and creative partners will join the Prime Video family,” Chris Brearton, MGM COO, said in a statement. “MGM is responsible for producing some of the most famous and critically acclaimed films and television series of the last century. We look forward to continuing this tradition in the next chapter by teaming up with the excellent team at Prime Video and Amazon Studios to provide viewers with the very best entertainment for years to come.”