Amazon is reportedly in talks with Metro Goldwyn Mayer (MGM) on an acquisition deal that could be as much as $9 billion, Financial Times (FT) reported, citing sources.
Like other entertainment studios, MGM was crippled by the pandemic as movie theaters closed and people locked down at home. It postponed the release of its latest James bond film, “No Time To Die,” four times. It is now scheduled for release in theaters on Sept. 30 in the U.K. and Oct. 8 in the U.S.
While entertainment is just a small part of Amazon’s business, it’s a growing segment —and one that the eCommerce behemoth is expanding. Amazon invested $11 billion in 2020 on developing original content and acquiring or licensing music and video for its 200-plus million Prime members. In 2019, the company spent $7.8 billion on its entertainment library.
Amazon also has been buying up rights for live sports and closed a $1 billion per year NFL deal to broadcast Thursday Night Football.
The company is also bringing back Jeff Blackburn, who was Jeff Bezos’s right hand for about 20 years. In a memo to staff, Amazon said Blackburn will run a new global entertainment arm that will incorporate its entire library of content, including its Prime video and gaming site Twitch, according to FT.
The MGM acquisition deal is reportedly being handled by Mike Hopkins, senior VP of Amazon Studios and Prime Video, who has been in talks with MGM board chairman Kevin Ulrich, Variety reported. MGM made it know that it was looking for a buyer.
MGM Holdings posted revenue of $403.3 million in the first three months of this year, up 27 percent year over year. Net income was $29.3 million compared to a net loss of $12.1 million during the same period last year.
It’s not known how much Amazon could shell out for MGM, the New York Times reported, citing sources. Its biggest acquisition to date was Whole Foods for $13.4 billion in 2017.
If the deal happens, Amazon will be another corporate conglomerate adding a major movie studio to its holdings. Yesterday, AT&T closed a deal to spin off WarnerMedia and combine it with rival Discovery to create a mega streaming business.