The big business story this weekend in the entertainment space was the proposed merger of some AT&T assets including HBO Max, Warner Bros and more with Discovery Plus and all of its cable channels. Now, rumors of continued consolidation in the media space are swirling as Amazon is reportedly in talks to acquire MGM and its extensive film library that includes co-ownership of the James Bond franchise, along with hit shows and film series like Rocky/ Creed, Survivor, Shark Tank, The Handmaid’s Tale and Fargo. The deal, which is apparently far from finished, would likely cost in the high single digit billions, though that exact number is likely a sticking point.
There have been rumors of an MGM sale for months, though there has been a lot of conversation about a proper valuation for the company. According to Next TV, both Apple and Comcast reportedly estimated the company was worth around $6B when they discussed a possible sale late last year/ early this year. Anchorage Capital, however, owns the majority of the company is allegedly looking for something more in the $9B range. It’s unclear what exactly Amazon would be willing to pay for the legendary studio with a library that reportedly includes 12 Best Picture winners and more than 5,200 titles, but it’s probably a safe bet to say if negotiations have gotten this far, the massive company is willing to go above that $6B others were willing to pay.
It’s easy to see why so many companies are focused on either growing or selling right now. When cable was at its peak and many customers were subscribing to a hundred or more channels, it was easier to compete as a niche player. The same goes for smaller production houses and studios when movie theaters were fully open and running at capacity. Unfortunately, given the pandemic and the increasing migration away from cable and toward streaming services, the market has gotten very hard to compete in. Because of that, many smaller properties are looking to sell and many larger properties are looking to acquire more assets, creating a really hot market.
Of course whether or not this is good for consumers is an open question. On the one hand, the larger streaming services having more differentiated content is certainly a good thing. It’s also nice to subscribe to less total things. For example: I used to subscribe to WWE Network. Now that content is housed within Peacock, which means I get a lot of additional content for the same price. Less options, in general, however is rarely a good thing for consumers, and it seems likely we will continue to see price increases in order to pay for all this additional content.
It seems like this proposed MGM/ Amazon deal is a long way for being completed. It was first reported over at The Information and in the time since, the negotiations have been verified by many other outlets. As Comcast and Amazon could both tell you, however, talking about a purchase and actually getting over the finish line is another matter entirely. So, for now, all we can do is wait and see and hope wherever MGM ends up, it finds itself in a comfortable position and able to churn out more great content we can all enjoy, at least if we subscribe to the right services.