Rocky Balboa and James Bond could have a new home on Amazon. That’s what will happen if the e-commerce giant buys Hollywood’s iconic Metro-Goldwyn-Mayer (MGM) movie studio.
News of the pending deal started circulating on May 17 after The Information reported it. According to The Information, Amazon could pay between $7 billion to $10 billion for the studio.
Will Amazon buy MGM?
Amazon and MGM representatives wouldn’t comment on a possible deal between the two companies. However, if the deal is completed, the purchase would be Amazon’s second-largest acquisition. The 2017 purchase of Whole Foods for $13.4 billion was Amazon's largest buy.
The possible purchase would also mean that Amazon could add MGM’s 4,000 films to its Prime Video streaming service. Prime Video enables Amazon’s Prime members, including 200 million paid subscribers, to stream top television shows and movies for little to no cost.
MGM is one of the world’s oldest film studios and producers of classics like Gone with The Wind (1939), Doctor Zhivago (1965), and Ben Hur (1925). Besides the popular James Bond and Rocky franchises, MGM is also the home of Tomb Raider, Legally Blonde, and The Pink Panther franchises.
Currently, New York investment firm Anchorage Capital owns MGM Holdings. According to The Wall Street Journal, the firm has reportedly been looking to sell since December. Besides its big-name movies, MGM also owns the Epix streaming channel.
MGM isn’t the first big entertainment company that Amazon has considered purchasing. Bloomberg reported in 2018 that the company was considering buying cinema chain Landmark Theaters. The theater chain was acquired by Cohen Media Group instead.
Rumors also circulated in 2020 that Amazon was considering purchasing AMC Entertainment Holdings (AMC).
Is Amazon buying MGM Resorts?
The MGM movie studio doesn’t own MGM Resorts International (NYSE: MGM), the gaming company whose holdings include top Las Vegas casinos MGM Grand and MGM Mirage.
Although the movie studio and the gaming company both share the MGM name, they are separate entities.
Confusion about the two MGM entities helped boost MGM Resorts gaming stock on May 17. The shares popped to $41 on May 17 before closing at $38.75.
Amazon’s (AMZN) stock valuation is up.
On May 18, Amazon stock was up by 1.02 percent and traded at over $3,304 per share. The tech giant has a market cap of about $1.7 trillion. In its 2021 first-quarter earnings report, Amazon founder Jeff Bezos said that streaming on Prime Video was up over 70 percent YoY.
“As Prime Video turns 10, over 175 million Prime members have streamed shows and movies in the past year,” Bezos said in the report.
Amazon Studios had its most successful awards season earlier this year when the streaming service won three Golden Globe awards—two for the comedy Borat Subsequent Moviefilm and one for best-supporting actor John Boyega in Small Axe.
Amazon’s (AMZN) forecast looks favorable.
Analysts predict that Amazon stock could climb even higher within the next 12 months, according to CNN Business. They estimate that the stock price could increase by over 27 percent.