This story originally ran back in June of 2021, shortly after Amazon announced an agreement with MGM to purchase the century-old Hollywood studio. Amazon closed that acquisition this week.
Amazon on Wednesday formally announced that it has agreed to pay $8.45 billion to acquire MGM.
The purchase price represents a 41% premium over earlier valuations made by Apple and Comcast, after each company considered their own potential acquisitions of the studio assets baring a 97-year-old Hollywood brand. (MGM put itself on the market back in December.)
“The acquisition’s thesis here is really very simple: MGM has a vast, deep catalog of much-loved intellectual property. With the talented people at MGM and Amazon Studios, we can reimagine and develop that IP for the 21s Century," Amazon founder and soon-to-be ex-CEO Jeff Bezos told investors Wednesday.
The purchase of Metro-Goldwyn-Mayer is somewhat of an outlier for Amazon. The company with a market capitalization of more than $1.65 trillion is far from willy nilly in the M&A market. It’s only bigger acquisition was Whole Foods, which it paid $13.7 billion for in 2017.
We know Amazon is getting a library with more than 4,000 film titles, including the James Bond and Rocky movie franchises, as well as a TV library of more than 17,000 episodes, from series including Fargo and The Handmaid's Tale.
But what’s Amazon really getting?
Well, it’s not the studio of Gone With the Wind, The Wizard of Oz and Singin' in the Rain, which Louis B. Mayer himself once bragged, had “more stars than the heavens.” We can tell you that.
A Brief History of MGM
Kirk Kerkorian, a former amateur boxer and WWII pilot, who bootstrapped himself into becoming an airline mogul, purchased the aging musical factory known as MGM in 1969 as a decided Hollywood outsider, a true barbarian at Tinseltown’s rusting gates.
Kerkorian also purchased United Artist in 1981 for $380 million, in a fire sale after the studio’s Heaven’s Gate debacle, combining it with MGM.
In 1985, Atlanta media mogul Ted Turner paid Kerkorian $1.5 billion to buy MGM/UA Entertainment. Three months after that deal closed, Turner turned around and sold the 44-acre MGM studio property, along with its film processing lab, to Lorimar-Telepictures Corp. for $190 million. That Culver City lot is now owned by Sony.
Turner then sold the MGM name, its Leo the Lion logo, along with the MGM motion picture, television production and distribution, and home video businesses, back to Kerkorian for $300 million.
Turner kept the pre-1986 MGM film library, which included classic titles such as Gone With the Wind, as programming grist for Turner Broadcasting. Turner’s empire was absorbed by Time Warner Inc. in 1996 in a $7.5 billion deal. Those older MGM titles remain in the WarnerMedia vault, which has been sold several times since, including last week.
As for the late Kerkorian—the man often accused of “killing” MGM—he sold MGM/UA again in 1990 to Giancarlo Parretti’s Pathe Communications for $1.36 billion, keeping the MGM name to license to casinos and theme parks. In 1996, Parretti defaulted on his loans. The MGM studio ended up in the hands of French bank Credit Lyonnais, which sold it back to Kerkorian.
In 2005, Kerkorian sold MGM to a consortium led by Sony. By this time, the studio’s status had been devalued down to greener film and TV libraries, and desperate real estate holdings, all weighed down by debt.
MGM emerged from 2010 Chapter 11 restructuring, with the executives behind Spyglass Entertainment, Gary Barber and Roger Birnbaum, in charge of a holding company called Metro-Goldwyn-Mayer.
That company now produces films and TV shows, many under the heading of valuable franchise brands.
What’s Really in the Bag for Amazon?
Perhaps most notable is the James Bond franchise—the 25th film in the series, No Time to Die, starring Daniel Craig as the title character, is set for a pandemic-delayed Oct. 8 theatrical release.
The Bond franchise is still vital. Its last film, 2015’s Spectre, grossed more than $880.6 million in global box office.
Bond will undoubtedly be a boost for the Amazon Prime Video service, which touts 175 million active users worldwide. But Amazon will now control only 50% of the Bond franchise—the duo of Barbara Broccoli and her half brother, Michael G. Wilson, the offspring of Bond producer Albert R. “Cubby” Broccoli, controls the other half.
Amazon is also getting a Bond franchise facing inflection: Craig, who is the seventh actor to play the iconic British spy, is now 53.
Rocky is another storied film franchise under the MGM banner. The franchise has been revitalized under the “Creed” name, with Michael B. Jordan playing a youthful boxer, the bastard son of old Rocky Balboa nemesis-turned-ally Apollo Creed, now trained by Rocky himself, still played by the franchise’s original aging star, Sylvester Stallone. Creed II earned more than $214 million in global box office receipts in 2018, with a third film due out in 2022.
Other active film franchises flying the MGM flag include RoboCop, Stargate, Legally Blonde and The Pink Panther.
Outside of established film brands, MGM’s pending film slate also includes Ridley Scott's House of Gucci, starring Lady Gaga and Adam Driver; an untitled ‘70s-era film directed by Paul Thomas Anderson (Boogie Nights) and starring Bradley Cooper; and the Aretha Franklin biopic Respect starring Jennifer Hudson.
On the TV side, MGM has a prolific production engine, headed by reality mogul Mark Burnett. MGM produces a range of active titles, with Hulu’s The Handmaid’s Tale probably the best known. However, the studio also makes Peacock’s Hannibal Lecter-themed Clarice, History Channel’s Vikings and FX dark comedy Fargo.
Notably, Amazon is also getting the raw footage and everything else associated with The Apprentice, the mid-aughts reality show starring Donald Trump. It’s widely speculated that Amazon might take control of a treasure trove of unreleased behind-the-scenes footage and outtakes that are potentially embarrassing to the former U.S. president. It’s unclear, however, as to whether Amazon has the rights to release this footage. ■
