Source: Amazon is in talks to acquire MGM for between $7B and $10B, in what would be its biggest move to expand into entertainment

Amazon is in discussions to acquire MGM, said a person familiar with the situation, in what would be the ecommerce giant's biggest move yet to expand in entertainment.

The Information 2021-05-18

Context & Ripple Effects

The reported negotiations became a signed $8.45B agreement for MGM days later, making the talks the opening stage of Amazon’s second-largest acquisition after Whole Foods. Related coverage also shows the transaction ultimately cleared in Europe and closed in 2022.

The deal matters as an acquisition-led route into entertainment, but its scale also brought scrutiny: the FTC later opened an in-depth investigation into the MGM purchase.

First-order effects

Amazon and MGM enter negotiations around a $7B-to-$10B valuation, putting MGM’s studio assets at the center of Amazon’s entertainment-expansion plans.
MGM’s owners gain a prospective exit at a multibillion-dollar price, while Amazon takes on the execution and approval risk of a major acquisition.

Second-order effects

The size of Amazon’s proposed purchase increases the likelihood of antitrust examination, a pressure that later materialized in the FTC’s in-depth investigation.
A completed deal would make Amazon’s entertainment push more dependent on integrating an acquired studio than on building its position solely through internal investment.

Third-order effects

Amazon’s pursuit of MGM points to entertainment competition being shaped by large technology companies buying established media assets, with regulatory review increasingly part of the transaction timeline.
If this acquisition-led model persists, the ability to secure approval for major content deals will influence how quickly large platforms can expand beyond their original markets.

The trend: Large technology platforms are using acquisitions of established media businesses to accelerate entertainment expansion, while antitrust review becomes a central constraint on that strategy.

Discussion

@nickwingfield Nick Wingfield on x
Scoop by @jtoonkel and me. An MGM-Amazon deal, if it happens, might explain why Jeff Blackburn was keen to come back to run Amazon entertainment https://thein.fo/...
@woodyallenpages Woody Allen Pages on x
If it happens, Amazon will own Woody Allen classics like ANNIE HALL, MANHATTAN and HANNAH AND HER SISTERS. I wonder if they will give the rights back to Allen instead. That would be an incredible win for Allen if he could get (or at least buy) the rights back. https://twitter.com…
@stroughtonsmith Steve Troughton-Smith on x
Fast-forward ten years and all the major movie studios will be owned by tech companies. It'll start an arms race. Only Disney survives https://twitter.com/...
@bradstone Brad Stone on x
Amazon buying MGM wouldn't be without irony. When the studio tried to advertise the James Bond film Skyfall in 2012 on https://amazon.com/, the company objected; it had a strict policy against guns being brandished in banner ads.
@themistermarcus @themistermarcus on x
Must be nice to just sit around pondering shit like this because you're that rich. 😂 https://twitter.com/...
@gennefer Gennefer Gross on x
Bezos, Jeff Bezos, making a play for MGM, but this is... *looks directly into camera* No Time to Buy https://twitter.com/...
@fmanjoo Farhad Manjoo on x
They should replace the lion with a roaring Bezos https://twitter.com/...
@chaneyj Jen Chaney on x
By the end of the week, there will be one massive, single entertainment conglomerate. https://twitter.com/...
@fatuogwuche Fatu on x
If Amazon succeeds, they'll acquire a huge stake in the James Bond and Rocky franchise, significantly beefing up their entertainment portfolio. https://twitter.com/...
@whartonrigby @whartonrigby on x
I figured this would either happen with Netflix or Amazon... That MGM library is loaded with classics. 🔥 https://variety.com/...
@thespaceshipper @thespaceshipper on x
Just because MGM is Stargate SG-1/Atlantis/Universe (and Forbidden Planet, First Man Into Space, Spaceballs, The Ice Pirates, Supernova... well I don't know the history of each rights). Soon on Prime? https://variety.com/...
@bittrscrptreadr Bitter Script Reader on x
I go away for two hours and... https://twitter.com/...
@awallenstein Andrew Wallenstein on x
Sounds like Amazon's entertainment portfolio could be expanding. If only Jeff Bezos could tap someone he used to work with to oversee it all. Someone with considerable experience working with streaming and studios. Someone looking for a new job... ...and vengeance! https://twitte…
@brooksbarnesnyt Brooks Barnes on x
MGM's movie chief presented his coming slate to Amazon on Friday. But MGM wants a lot of $$$ and only owns 50% of James Bond, which means a lot of 007's untapped value (TV spinoffs) is hard to extract. https://www.nytimes.com/...
@richlightshed Rich Greenfield on x
#streamingwars heating up 🔥🔥🔥 https://twitter.com/...
@tjallard TJ Allard on x
Whoever controls your pipeline, controls your world. Next step well be Amazon's own “internet”. https://twitter.com/...
@sub8u Subrahmanyam Kvj on x
“Tech companies don't ‘get’ creative industries” “Amazon Said to Make $9 Billion Offer for MGM” https://variety.com/... https://twitter.com/...
@loudmouthjulia Julia Alexander on x
I always assumed it would be Amazon or Apple if any company was going to do it. A) They have the money, b) they could use the catalog of Bond movies, and Epix's library + pay 1 opportunity isn't a bad get for Amazon, and c) can brag about Bond. https://www.theinformation.com/ ...
@stevesilberman Steve Silberman on x
Thinking about how much this headline would have blown my mind when a hyper nerdly little guy named Jeff came to the @Wired offices in 1995 to tell us about his startup: an online bookstore. https://twitter.com/...
@levie Aaron Levie on x
If your company isn't buying or selling a movie studio right now, are you even a company? https://twitter.com/...
@pkafka Peter Kafka on x
Con: Big Tech buying a big media asset is like waving a flag in front of @amyklobuchar @SenWarren et al. Pro: Actually just a studio that makes James Bond movies and Shark Tank. No news or sports to take away/hold hostage. https://twitter.com/...
@mgsiegler M.G. Siegler on x
The name's Bond. Jeff Bond. https://twitter.com/...

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