News ID: 303187
Published: 0409 GMT May 18, 2021

Amazon said to make $9 billion offer for MGM

Amazon said to make $9 billion offer for MGM

Amazon is weeks into negotiations on a deal to acquire MGM for about $9 billion, industry sources tell Variety.

Chatter that Amazon (and other tech and media giants) has been sniffing around MGM has circulated for some time. But sources indicated that Amazon’s interest in acquiring the studio has taken on a new tenor beyond the usual rumor mill. The deal is said to be being orchestrated by Mike Hopkins, senior vice president of Amazon Studios and Prime Video, directly with MGM board chairman Kevin Ulrich, whose Anchorage Capital is a major MGM shareholder.

Reps for Amazon and MGM declined to comment.

MGM had already effectively nailed up a “for sale” sign: Variety confirmed in December that the company was looking for a buyer.

News of Amazon’s talks with MGM began to swirl in recent days. It is reported Monday that Amazon was in talks about a potential deal for MGM, which could run between $7 billion and $10 billion. Industry sources said MGM reps have been whispering to prospective buyers for months about a price tag of $9 billion while others see it as worth about $5 billion.

In a sign Amazon has upped its focus on entertainment, last week the company announced that it had tapped Jeff Blackburn, a former high-ranking executive who recently exited the ecommerce giant, to return to Amazon in a new role overseeing a consolidated global media and entertainment group.

Amazon currently has more than 200 million Prime members worldwide, and Jeff Bezos recently told investors that 175 million of those streamed Prime Video content in the past year. The company clearly wants to turn Prime Video into an even bigger habit for customers worldwide — and a quick way to do that would be to stir MGM’s extensive library of titles into the mix.

MGM claims to own one of the world’s “deepest libraries” of premium film and TV content.

For Amazon, media is a relatively small piece of its gargantuan empire but represents a fast-growing business segment. In 2020, the company spent $11 billion on TV shows, movies and music for Prime services — up 40 percent from the year prior.

For the first three months of 2021, MGM Holdings reported revenue of $403.3 million (up 27 percent year over year) and net income of $29.3 million (versus a net loss of $12.1 million in the year-earlier quarter).

 

   
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