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Amazon Reportedly Closes in on MGM Acquisition

MGM
(Image credit: MGM)

According to reports from the financial press, Amazon could announce a deal this week to acquire MGM for $9 billion including debt. If completed, the transaction would solidify Amazon’s Prime service as the largest competitor to Netflix in a market that is seeing further consolidation and competition.

According to the Wall Street Journal, MGM’s share price rose from $105 to $150 after the paper announced an imminent deal Monday afternoon. It also had about $2 billion in long-term debt at the end of March, the newspaper reported.

MGM is one of the most storied studios in Hollywood with a legacy that inspired two ‘70’s era movies celebrating its musical past (“That’s Entertainment” and “That’s Entertainment 2”), and also holds such lucrative franchises as “James Bond,” as well as more recent hits as Hulu’s “The Handmaid’s Tale” and “Fargo.”

Amazon Prime is the world’s second largest streaming service with more than 150 million subscribers, the vast majority of whom subscribe through the online retailer’s “Amazon Prime” service. Netflix is the world’s largest, with more than 204 million subscribers. Amazon is advancing on Netflix’s dominance, spending $20 billion on original music and video in 2020 and is also increasing its efforts to secure live sports TV as well. 

The deal could face antitrust concerns that particularly European countries have already raised over Amazon’s size and perceived power, according to the WSJ. While the proposed deal has been a poorly-kept industry secret for months now, yesterday's report prompted a response from Rep. Ken Buck (R-Col.), the ranking Republican member of the House Antitrust Subcommittee.

“This proposed merger is yet another example of Big Tech’s commitment to total dominance in every sector of our economy," Rep. Buck said. "If Congress does not act soon, there won’t be a market Big Tech doesn’t control.”

Tom Butts

Tom Butts has been the editor in chief of TV Technology since 2001. He started out in this industry reporting for member communications for the National Association of Broadcasters in 1995. He is also former editor of DTV Business for Phillips Publishing (now Access Intelligence) and launched digitalbroadcasting.com for VerticalNet in 1999. He is a graduate of the University of Maine.