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Amazon has closed its $8.5 billion acquisition of MGM, officially bringing the film and TV studio into its fold.
The landmark deal was first announced last May, with the company citing MGM’s vast library as driving the purchase. “With the talent at MGM and the talent at Amazon Studios, we can reimagine and develop that IP for the 21st century,” Amazon founder Jeff Bezos said after the purchase was announced.
MGM’s library includes more than 4,000 film titles and 17,000 TV episodes, including intellectual property like the Rocky/Creed franchise, The Silence of the Lambs, Thelma & Louise, and TV shows like The Handmaid’s Tale and Survivor. Significantly, it also includes MGM’s stake (shared with Eon Productions) in the James 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 Mike Hopkins, senior vp Prime Video and Amazon Studios, in a statement. “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.”
The deal close came after the window for U.S. regulators to challenge it closed, though the Biden administration has warned companies that it reserves the right to challenge some deals even after they are completed. European regulators signed off on the merger earlier this week, writing in their approval that the deal “would not significantly reduce competition” and that “the overlaps between Amazon and MGM are limited.”
In the U.S., some labor groups had asked the FTC to challenge the acquisition, arguing that Amazon’s status as a producer and distributor of content, as well as of devices like the Amazon Fire products, would give it unwarranted market share and pricing power.
Earlier this year, federal antitrust regulators signaled that they planned to be aggressive about challenging mergers. However, with the clock running out on both the Amazon-MGM deal and the WarnerMedia-Discovery deal, it is possible that their focus is elsewhere.
With the deal closed, the focus will now turn to how Amazon plans to run MGM, which will join Amazon Studios, led by Jennifer Salke, and Prime Video in the tech giant’s entertainment arsenal.
Among the questions is how Amazon plans to structure Amazon Studios and MGM, which have some overlapping functions. While Amazon Studios is more TV-focused, both divisions produce films and TV shows. Michael De Luca oversees MGM’s film operations, with Mark Burnett leading its TV division.
There is also the question of whether Amazon will commit to traditional theatrical releases for future MGM projects (Amazon Studios has given many of its originals theatrical releases). And then there is Epix, the pay-TV and streaming service owned by MGM. With Amazon hosting its own premium streaming service in Prime Video, as well as a free, ad-supported service in IMDb TV, it isn’t clear that Epix has an obvious role to play in the combined company, though distribution deals with cable and satellite operators could hinder any efforts to move it to streaming-only.
Amazon has been investing heavily in entertainment assets in recent years, and the company says more than 175 million of its Amazon Prime subscribers have streamed 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 its upcoming series adaptation of The Lord of the Rings. Its films have included mainstream fare like Borat Subsequent Moviefilm and such awards fodder as One Night in Miami.
The company has also spent handsomely to buy exclusive content from others, including Paramount’s Coming 2 America, and its new deal with the NFL for exclusive rights to Thursday Night Football.
All told, the company spent $13 billion on video and music content in 2021. And that was before its MGM purchase.
“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,” said Chris Brearton, MGM’s COO, in a statement. “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. 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.”
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