Comcast, Apple Kicked MGM Tires, Valued Studio Less Than Amazon Does

NEWS ANALYSIS — With Amazon reportedly considering spending $9 billion to acquire MGM to supercharge its movie and TV production ambitions, questions remain just how valuable the vaunted Hollywood studio is.

MGM, which is owned by private-equity group Anchorage Capital, has been on the sales block since last year — enticing would-be buyers with a 4,000-movie catalog that includes the “James Bond,” “Rocky,” “RoboCop,” “Pink Panther,” “Tomb Raider,” “Chucky” and “Legally Blonde” franchises. Some of the titles would require new sequels to jumpstart renewed moviegoer interest. Comcast and Apple looked at the books and valued the studio at around $6 billion, according to the New York Times.

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Sanchit Jain, media analyst with Enders, believes Amazon would be willing to pay more since it eyes movies and TVs as a marketing extension of its Prime membership platform.

“They may be prepared to pay more because you get people into Prime Video, and two or three weeks later they go for fully charged Amazon Prime with e-commerce, music, etc.,” Jain said. “It makes the entry point to the Amazon flywheel more appealing. With Amazon it is all about subscription growth.”

While MGM Chairman Mike De Luca pitched Amazon the studio’s upcoming movie slate that includes biopic Respect, on the life and career of Aretha Franklin, starring Jennifer Hudson, and House of Gucci, starring Lady Gaga and Adam Driver — the fact remains MGM only controls 50% of the vaunted Bond franchise, with the remainder owned by Barbara Broccoli and her brother Michael Wilson through their production company. The siblings reportedly have total control on who plays Bond, script dialog, casting decisions, stunts and related marketing. Previous attempts to spin off the Bond character in TV series have been rebuffed by the sister and brother.

No Time to Die, the 25th Bond movie, and last with Daniel Craig in the title role after 15 years, is slated to hit theaters Oct. 8 after multiple delays due to the pandemic.

Amazon, which paid more than $13 billion for Whole Foods, is one of the few companies with the deep pockets required to pull the trigger on an acquisition. The e-commerce behemoth recently re-hired Jeff Blackburn, an architect of of its Prime streaming service, to head the company’s global media and entertainment operations. Jennifer Salke heads Amazon Studios — a studio that has remained loyal to the ever-shortening theatrical window.

“MGM is a production studio that, with an injection of capital, could do really great,” Tim Richards, CEO of the VUE theatrical chain in the U.K., told the Evening Standard. “When you have films that are grossing well in excess of $1 billion, any business in the world would look at that and not change the [business] model.”

Richards contends that until pandemic hit, the theatrical business was booming compared with declines in home entertainment.

“2019 was a $43 billion box office year,” he said. “This was growing every single year.”

 

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