Will MGM become Amazon’s ticket to the Hollywood Major League?

Jeff Bezos (Jeff Bezos) has been desperately chasing himself for years game of Thrones -The out-of-control blow will cause Amazon’s video streaming business to break into the Hollywood Major League.

According to a recent book by Brad Stone, the billionaire entrepreneur said to his team: “It’s not that hard” Amazon is not bound. It is said that Bezos then decomposed the elements of Hollywood’s success into key essential criteria: hero protagonist, “civilization is high risk”, betrayal and violence, etc.

At MGM, the movie studio behind the legendary franchise James Bond with Rocky, Bezos may have found what he wanted. But many people still suspect that this acquisition is his careful calculation.

In the next few years, the only MGM asset considered to be a true gem is James Bond The franchise is jointly owned by the company with the Wilson/Broccoli family through another vehicle. This means that for any future Bond project, Amazon will rely on the approval of producer Barbara Broccoli and his half-brother Michael G. Wilson.

“Barbara and Michael are the ones who decide when to make a movie. For a long time, MGM’s hedge funds have been trying to turn the tide. James Bond Become a TV series that can contend with Game of Thrones And both people firmly opposed it. “Said a person who knew broccoli and Wilson.

“They are very, very sensitive to franchising. So what MGM has is that when Barbara and Michael decide to make a Bond movie, they [MGM] The right to receive funding and distribute movies. However, the real decision about Bond is made by Barbara and Michael. ”

MGM has many award-winning movies, including classic movies such as Ordinary suspect, Good and evil And ugly with The Silence of the Lambs, But its creativity as a film studio is widely considered to have reached its peak.At the same time, the early MGM titles with the definition of the era, such as gone With the Wind with The Wizard of Oz It was sold in the previous transaction and has disappeared.

Thomas Hughes, the former film and television rights platform Vuulr, said: “This is not the largest film studio in town.” “Is this changing the face of Hollywood because of the purchase of MGM? Not true. Land. Is it because Amazon is doing it to change the face of Hollywood? Maybe.”

Amazon is investing a lot of money in content creation, seeing it as a link between attracting Prime members and retaining members. Last year, Amazon spent $11 billion on creating, acquiring or licensing music and video content for Prime subscribers, up from $7.8 billion in 2019.

Through its own Amazon Studios, the company is Transparent with Marvelous Mrs. Messer, Won two Golden Globe Awards and five Emmy Awards.Amazon 2017 movies Manchester by the Sea Become the first film produced by a streaming platform nominated for the Best Picture Academy Award.

“I think it shows that you are serious about content,” said Brian Yarbrough, a senior analyst with Edward Jones. But he added: “This is a hot business, and the risk of you spending billions of dollars on content is always there, and people don’t want to see it.”

Since MGM’s bankruptcy in 2010, MGM has been in the hands of financial wizards. Its largest shareholder hedge fund Anchorage Capital (Anchorage Capital) called for such action. After the fund went bankrupt in 2010, it began to purchase MGM debt as part of the bankruptcy plan. financial crisis.

A person who has worked with MGM in the past said: “Once MGM is sold, Anchorage and other hedge funds that control MGM will not bring much benefit.” The only decent thing in the past few years is key with Maid’s story series. ”

The people working with MGM added that it might make more sense for Amazon to adopt the Netflix model, which involves paying a premium for the best creative talents instead of buying an old studio, which many people think is its best. Good day.

Amazon will get a larger library to provide its users with more choices. “The Amazon guys are not fools. Of course, this deal seems a bit unusual and expensive, but I think they just found out that they need more content to provide streaming services, and that’s the price they are willing to pay for it. “Of course. , This may be an old and tired library, but it is better than the one currently provided by Apple. “

Morgan Stanley analysts estimate that Amazon will receive about 4,000 movies and 17,000 TV series in total. It will also get the cable channels Epix and MGM HD-through these channels Amazon can build its booming advertising business, which is now worth about $20 billion a year.

Two people familiar with the matter said that Apple is also bidding for MGM, but it is only prepared to pay as much as $6 billion. These people added that the cable company Comcast had also considered the offer, but eventually gave up.

“Amazon is actually trying to reach a licensing agreement with Sony Pictures, which eventually went to Netflix and Disney. They realized that they really needed content from the streaming service, which is why they are paying absolutely crazy prices. The reason for buying MGM.” said a banker who was not directly involved in the transaction.

People familiar with the matter said that for Amazon, the transaction will not destroy the value of the bank. It is worth mentioning that there are almost no studios to be acquired.

Because Republican and Democratic lawmakers have repeatedly accused Amazon of using its commercial power to acquire companies and potential potential competitors, the transaction is expected to become the target of political attacks.

“This proposed merger is yet another example of Big Tech’s commitment to fully dominate all sectors of our economy,” he said. In tweet Republican Representative Ken Buck, member of the Antitrust Subcommittee of the House Judiciary Committee.

But observers are skeptical, and regulators will take many actions to stop Amazon’s development. Although it is the dominant player in e-commerce, the same cannot be said for streaming and content creation. Amazon will continue to compete fiercely with Netflix, Disney and other companies.

Professor Chris Sagers, an antitrust expert at Cleveland-Marshall College of Law, said: “The government has to challenge this deal to be relatively difficult.” “But it’s not because I think it’s relatively difficult. The transaction is not potentially dangerous. Amazon is engaged in many businesses and they are using their combination to make a difference.”