Amazon’s interest in one of Hollywood’s oldest studios began with James Bond and peaked with Eddie Murphy.
The e-commerce giant is in talks to buy MGM, the studio of “Gone with the Wind” and “Rocky.” MGM has told its employees that it has a firm offer from Amazon at $9 billion, but also that the deal could fall apart soon if they don’t agree on a price. Amazon has remained quiet, as it so often does. Whether or not the two sides come to an agreement, it raises the question: Why now?
Agents and bankers have been trying to get technology firms to buy a Hollywood studio for as long I’ve covered the entertainment industry. It never happened. Netflix and Amazon decided to build their own studios, buying talent instead of companies.
While MGM seemed like it could be the one exception that rule, its chairman Kevin Ulrich has seemed reluctant to give up the Hollywood lifestyle. Chief Executive Officer Gary Barber talked to Apple about buying the company for a reported $6 billion a few years ago. Yet Kevin Ulrich fired Barber and killed the deal, a move everyone in Hollywood viewed as a mistake at the time. Who else was going to pay more than $6 billion for an aging library?
Yet the pandemic has given both MGM and Amazon a chance to reconsider their positions. Unable to release its movies in theaters, MGM sold some of the lesser titles to streaming services and discussed selling the latest James Bond movie, “No Time to Die,” to Apple and Netflix. While the would-be buyers balked at the price tag, MGM used those talks to explore a sale of the whole company. It officially put up a for-sale sign by hiring a bank to assess its options.
While many companies have looked and passed, including Sony, the pandemic changed the way all the tech companies value movies. The closure of theaters made streaming services the default cinema, and streaming services saw an opportunity to dominate the market for new movies as they already do in new TV.
That drove Netflix to spend $450 million for two sequels to “Knives Out,” and commission sequels to pandemic hits such as “Extraction” and “The Old Guard.”
Amazon has had little success making movies in house. Its biggest successes have been movies it acquired at Sundance, such as “Manchester by the Sea” and “The Report.” Its two biggest movies of the pandemic, “Borat” and “Coming 2 America,” were also acquisitions. “Coming 2 America,” the sequel to the popular Eddie Murphy comedy, is one of the most popular new movies in Amazon history.
Amazon wants to release big movies and create franchises that can appeal to viewers all over the world. It doesn’t have any in-house nor executives with the track record. MGM offers Bond, one of the most popular film franchises around, as well as a deep roster of film executives, led by Mike De Luca.
MGM is also unique among acquisition targets in that owns a library of titles ripe for exploitation, and isn’t encumbered by cable networks or other legacy businesses that don’t appeal to streaming services.
Logic doesn’t mean this is a foregone conclusion. Pretty much no one thinks MGM is worth the $9 billion it wants, and it doesn’t own its most valuable asset. Though MGM releases the Bond movies, it doesn’t control them. The Broccoli family wields veto power over all things Bond. You can’t cast a new Bond or create a spinoff TV series without their approval. And thus far, they’ve been reluctant to do much of anything but release a movie every few years in as many theaters as possible.
What will they think of an online retailer controlling their beloved spy?
But Amazon already overpaid to get in business with “Lord of the Rings.” What’s a few billion dollars to Jeff Bezos? He just brought back his long-time deputy Jeff Blackburn to made sense of his sprawling media business. James Bond would make for a shiny new toy. — Lucas Shaw
The best of Screentime (and other stuff)
The new king of Hollywood
This was the week of the David Zaslav story. Zaslav, the CEO of Discovery, just orchestrated one of the biggest coups in media history. After a couple years of relentlessly pitching his company, he will now be overseeing one of the largest media empires in the world.
The New York Times posted a good ticktock of how the deal came to be, while Felix Gillette and Gerry Smith broke down the new company’s odds of competing with Netflix and Disney.
Lost in all the analysis of what this deal says about the media landscape and who else will buy who are three pretty startling facts:
- AT&T paid $85 billion to Time Warner, a deal most people at the time said was a bad idea. AT&T said it would boost its phone business. It didn’t boost its phone business. But the guy who pushed for the deal in the first place got a promotion and is now selling it just three years later.
- The deal is supposed to make Discovery and WarnerMedia more competitive with Netflix and Disney in the long run. But in the short term, the timing couldn’t be worse for HBO Max, which just found its footing after a rocky launch. The service is about to launch in Latin America and Europe. Instead of focusing on that, its employees will now be distracted and leadership will be unable to make any huge decisions.
- Speaking of those employees… WarnerMedia employees just suffered through four years of regulatory reviews, layoffs and integration. They are now looking at two more years of regulatory reviews, layoffs and integration.
If you want to read the snarkiest take possible on this deal, check out The Ankler, which framed it as yet another case of an arrogant interloper trying and failing to make it in Hollywood.
TV is giving up, Snapchat is growing up
Remember the upfronts? Every May, the largest media companies in the U.S. host presentations for advertisers in New York. Those happened last week, and they were completely overshadowed by the WarnerMedia-Discovery deal. But! If you are curious what broadcast networks are saying to advertisers, Joe Adalian summed it up pretty well: When Network TV Gives Up: Franchises, Reboots and Very Few Laughs.
If the upfronts are a study in decline, Snap’s Partner Summit had the hallmarks of a business still on its ascent. The company now has more than 500 million monthly active users.
The #1 movie in the world is…
“F9,” the latest installment in the “Fast and Furious” movie franchise. The movie grossed more than $160 million at the international box office this weekend, the biggest opening of the pandemic for any Hollywood movie.
The film doesn’t open in the U.S. for another month, but it’s going to be huuuuge.
- Keep an eye on ratings for the NBA playoffs. Viewership collapsed last year, which could be blamed on everything from the election to the decline in TV. The playoffs this year are back at their normal time, but they also must compete with society’s desire to go outside.
Hollywood doesn’t employ many Asians
Here’s the latest study from the University of Southern California:
Only 44 of the 1,300 films reviewed featured Asian and and Pacific Islander lead or co-lead characters driving the story. And nearly 40% of the films reviewed had no API representation at all.
This means only 3.4% of the top-grossing movies in 13 years featured at least one API protagonist in a prominent role. These characters were portrayed by 22 individual actors, including Dwayne Johnson, who is credited in 14 of the 44 films.
Deals, deals, deals
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ByteDance CEO Zhang Yiming is stepping down, and will be succeeded by his co-founder Liang Rubo. This is a good time to listen to Bloomberg’s TikTok podcast.
- Sony Music signed a deal with China’s second-biggest streaming service, NetEase Cloud Music. Sony had an exclusive deal with Tencent, but those exclusive deals are ending after the government said no more.
- Universal Music signed a deal with Triller, ending its standoff with the social media company.
- Axel Springer is in talks to buy Axios.
Weekly playlist
There are at least three good new albums out this past weekend, including Allison Russell’s folksy “Outside Child,” Patrick Paige II’s “If I Fail Are We Still Cool” and Olivia Rodrigo’s “Sour.”
Also, if you aren’t watching “Hacks” on HBO Max, I don’t know what’s wrong with you.
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