The Amazon – MGM Deal
Remember the days when you would go to the local Blockbuster store to pick up a video? Maybe you would like a film so much you would buy it. Of course after one or two viewings, it would live out the rest of its life on a shelf or in a box never to be viewed again.
What if you had more money than it would take to buy all the Blockbuster stores in the world. Well that’s not a good comparison, but what if you had more money than Fort Knox, and you really liked movies. What would you buy? How about a Movie Studio?
Well that’s what one of the richest companies on the planet is doing, or rather wants to do. Amazon has a deal in the works to buy the Hollywood studio MGM for almost $8.5 billion – a stack of dollar bills over 55 stories high! It will be the second-largest acquisition for the company after gobbling up Whole Foods.
What’s Included In The MGM Purchase
Buying MGM will be Amazon’s biggest move into the entertainment industry. With the purchase Amazon will get the rights to the Golden Age studio’s film and television library. Amazon’s senior vice president of Prime Video and Amazon Studios, Mike Hopkins, fairly gushed over the intellectual property value of MGM’s vast holdings, going back to the 1920s. He said “The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team.”
We all know the MGM mascot, the roaring lion (actually named ‘Leo the Lion’ by the studio). With Leo bellowing at each movies beginning MGM has made such movie classics as Singin’ In the Rain and 2001: A Space Odyssey. MGM also owns the EPIX cable channel and runs a TV studio that produced The Handmaid’s Tale and Fargo (hey, I just watched that again last week – weird movie).
And that’s not all. MGM also splits a money machine, the James Bond movie franchise with a family that holds creative control of the 007 movies. According to Variety, as of 2020 the 24 films released so far in the series have generated $16.3 billion in global ticket sales, adjusted for inflation. Overall more than 4,000 films. Do you remember Moonstruck, Legally Blonde, Rocky, The Pink Panther, The Silence of the Lambs and Poltergeist? Plus some 17,000 tv shows. When will all the 200 million Amazon Prime account holders ever get off the couch!
Is The Deal Done?
The Wall Street Journal reported on Wednesday that the $8.45 billion proposed deal also includes taking on MGM’s current debts. But the deal has not yet really done. Amazon spokesperson said to NPR that there are t’s needing to be crossed and i’s that must be dotted. You see there is this thing called “regulatory approval”. AND the company, Amazon, is already facing antitrust inquiries in both the U.S. and Europe. That means they may not be playing nice in the sandbox with other companies in the same business as Amazon. Like what business are they not already in?
What This Means For Online Sellers
If you are an online seller like me, why give a toss? How is The big’s A buying Leo the Lion and his hoardings going to affect my sales? Well it’s that “Antitrust” thing. You see, some people say that Amazon is manipulating prices, bullying small online sellers and making rules from A to Z about how you can run your business. Not nice.
If you remember the Microsoft antitrust cases like a U.S. court ruling in April 2000 that Microsoft had violated the Sherman Act, and later ordered that Microsoft be broken up into two separate companies. You see the judge ruled that Microsoft had actively tried to crush its competitors, including Apple, IBM, Netscape, Sun, and others (Can you say ‘a very long river in South America’?). Microsoft immediately appealed the ruling and it was overturned. In the EU it was a bit different. In 2007 Microsoft was sued in Europe. Microsoft Corp. v. Commission (2007) T-201/04 was a case brought by the European Commission of the European Union (EU) against Microsoft for abuse of its dominant position in the market (according to competition law). In March 2004, the EU ordered Microsoft to pay €497 million ($794 million U.S. dollars). Then on 12 July 2006, the EU fined Microsoft an additional €280.5 million (U.S. $448.58 million) per day from 16 December 2005 to 20 June 2006. What a difference an Ocean makes.
Amazon Wants To Pay
$$$ THIS MUCH $$$
To Buy MGM !!
Will it be the same with the Amazon antitrust case – pay in the EU – but get off scott free in the Good ‘OL U.S.A.? Stay tuned for… ‘The Amazon Eats the Lion‘– Part II