"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. It's very exciting and provides so many opportunities for high-quality storytelling," he added.
The two companies said that the completion of the deal "is subject to regulatory approvals and other customary closing conditions." Even though streaming is a small part of Amazon's empire, the company has focused on becoming a more prominent player in the entertainment world as of late. For example, a highly anticipated series based on "The Lord of the Rings" is in the works. Prime Video — which also features original and award-winning shows such as "The Marvelous Mrs. Maisel" — is tied to Amazon's immensely popular Prime program, which offers faster delivery and has more than 200 million paid subscribers. Those kinds of numbers make it a competitor to the likes of Netflix , which has 208 million subscribers.
Metro-Goldwyn-Mayer Studios Inc. is an American media company, involved primarily in the production and distribution of feature films and television programs. One of the world's oldest film studios, MGM's corporate headquarters are located in Beverly Hills, California.
MGM was formed in 1924 when the entertainment entrepreneur Marcus Loew gained control of Metro Pictures, Goldwyn Pictures, and Louis B. Mayer Pictures. The new company grew and became one of the 'big five' film studios of Hollywood. The studio built a stable of stars under contract, its motto was 'more stars than there are in heaven'. It was the studio that produced numerous big musicals and won many Oscars. The company was a complete production house, from studios and backlots to full technical facilities. Its most prosperous era was from 1926 until 1959, bracketed by two productions of Ben Hur. The year of 1959 also saw the beginning of the breakup of the company, with the divestiture of the Loews movie chain. Long-term contracts became a thing of the past. Film costs became more unpredictable and making films became more of a gamble. Built initially to produce twenty films or more per year to fill its movie houses, the studio became unsustainable at a reduced output in the 1960s, although it had diversified into television production and rentals of much of its facilities. By the late 1960s, the company's stock price had declined to the point where the value of its assets well exceeded the value of its stock, making it the potential target for a takeover and the company fought off corporate raiders. The company fell under the control of outsiders with little experience in film-making. In 1969, deal maker Kirk Kerkorian bought 40% of MGM and installed new management. The management immediately started a sell-off of assets and laid off much of its staff. Output was reduced to an average of five movies per year. Kerkorian focussed on other ventures, utilizing the company brand. MGM Resorts International, a Las Vegas-based hotel and casino company was created in 1973 as a division of Metro-Goldwyn-Mayer and in the 1980s became an independent company.
Over the next 37 years, the studio was bought and sold on multiple occasions. In all, Kerkorian bought and sold the company three times. Each sale was larger than the previous, and often funded with debt. The debt led to further sell-offs and divestitures. The company sold its Culver City studio complex, its backlots, film library and subsidiaries to pay off incurred debt and reduce ongoing costs. To bolster its output and increase its film library, the company acquired United Artists in 1980. In 1986, Kerkorian sold the company to Ted Turner and bought most of it back, only to sell it again in 1992. Kerkorian bought the company a third time in 1996 and purchased studios such as Orion Pictures and Samuel Goldwyn Co. and their film libraries. In 2004, Kerkorian sold the company to a consortium including Sony Pictures. Finally, in 2010, MGM filed for Chapter 11 bankruptcy. MGM emerged from bankruptcy later that year under the ownership of its creditors, at which time the executives of Spyglass Entertainment, Gary Barber and Roger Birnbaum, became co-chairmen and co-CEOs of the holding company of Metro-Goldwyn-Mayer. Barber has since left the company and the company is once again exploring a sale. On May 26, 2021, Amazon announced it intended to acquire the studio for $8.45 billion.
Today the company produces feature films and television series, purchases films for distribution and distributes its own pictures. In films, the company produces the Rocky and Creed franchises, and the James Bond franchise. Recent productions of MGM Television include The Handmaid's Tale.
MGM was the last studio to convert to sound pictures, but in spite of this fact, from the end of the silent film era through the late 1950s, Metro-Goldwyn-Mayer was the dominant motion picture studio in Hollywood. Always slow to respond to the changing legal, economic, and demographic nature of the motion picture industry during the 1950s and 1960s, and although at times its films did well at the box office, the studio lost significant amounts of money throughout the 1960s. In 1966, MGM was sold to Canadian investor Edgar Bronfman Sr., whose son Edgar Jr. would later buy Universal Studios. Three years later, an increasingly unprofitable MGM was bought by Kirk Kerkorian, who slashed staff and production costs, forced the studio to produce low-quality, low-budget fare, and then ceased theatrical distribution in 1973. The studio continued to produce five to six films a year that were distributed through other studios, usually United Artists. Kerkorian did, however, commit to increased production and an expanded film library when he bought United Artists in 1981.
MGM ramped up internal production, as well as keeping production going at UA, which included the lucrative James Bond film franchise. It also incurred significant amounts of debt to increase production. The studio took on additional debt as a series of owners took charge in the 1980s and early 1990s. In 1986, Ted Turner bought MGM, but a few months later, sold the company back to Kerkorian to recoup massive debt, while keeping the library assets for himself. The series of deals left MGM even more heavily in debt. MGM was bought by Pathé Communications in 1990, but Parretti lost control of Pathé and defaulted on the loans used to purchase the studio. The French banking conglomerate Crédit Lyonnais, the studio's major creditor, then took control of MGM. Even more deeply in debt, MGM was purchased by a joint venture between Kerkorian, producer Frank Mancuso, and Australia's Seven Network in 1996.
The debt load from these and subsequent business deals negatively affected MGM's ability to survive as a separate motion picture studio. After a bidding war which included Time Warner and General Electric , MGM was acquired on September 23, 2004, by a partnership consisting of Sony Corporation of America, Comcast, Texas Pacific Group , Providence Equity Partners, and other investors.
After its bankruptcy in 2010, MGM reorganized, with its creditors' $4 billion debt transferred to ownership. MGM's creditors control MGM through MGM Holdings, a private company. New management of its film and television production divisions was installed. The creditors have since contracted Morgan Stanley and LionTree Advisors to explore a sale.
Because of the way it had acquired control of the company, Crédit Lyonnais soon put the studio up for sale, with the highest bidder being Kirk Kerkorian. Now the owner of MGM for the third time, Kerkorian's deal with Mancuso quickly angered John Calley, who quit United Artists and was named head of Sony Pictures Entertainment. By selling a portion of the studio to Australia's Seven Network, Kerkorian was able to convince Wall Street that a revived MGM was worthy of a place on the stock market, where it languished until he sold the company to a group of hedge funds tied to Sony, which wanted to control the studio library to promote the Blu-ray Disc format.
On April 11, 1997, MGM bought Metromedia's film subsidiaries for US$573 million, substantially enlarging its library of films and television series and acquiring additional production capacity. The deal closed in July of that year. This catalog, along with the James Bond franchise, was considered to be MGM's primary asset. In the same year, MGM's long-running cable television series, Stargate SG-1, first aired. Kerkorian bought out Seven Network the following year.
In December 1997, MGM attempted to purchase 1,000 films held by Consortium de Réalisation, but was outbid by PolyGram. However, they ultimately succeeded when they acquired the 2/3 of pre-1996 PolyGram Filmed Entertainment library from Seagram in 1999 for $250 million, increasing their library holdings to 4000. Prior to that, MGM had held a home video license for 100 of the films since spring 1997. The PolyGram libraries were purchased by its Orion Pictures subsidiary so as to avoid its 1990 video distribution agreement with Warner. The studio also obtained the broadcast rights to more than 800 of its films previously licensed to Turner Broadcasting.
By 1998, MGM had started a specialty film unit using The Samuel Goldwyn Company under the Goldwyn Films name. Samuel Goldwyn Jr. sued Metromedia over salary and damages when he worked at Goldwyn Company under Metromedia and sued MGM over the use of the Goldwyn name claiming trademark infringement and unfair competition. MGM and Metromedia settled on January 10, 1999, with MGM's Goldwyn Films changing its name to G2 Films.
In 2000, MGM changed its overseas distribution arrangement. Since 1981, MGM had distributed its films internationally through United International Pictures , a joint venture of MGM, Universal Pictures, DreamWorks Pictures and Paramount Pictures. UIP was accused by the European Union of being an illegal cartel, and effective November 2000 MGM severed its ties with UIP and distributed films internationally through 20th Century Fox.
MGM purchased 20 percent of Rainbow Media Group from Cablevision Systems for $825 million in 2001. MGM attempted to take over Universal Studios in 2003, but failed, and was forced to sell several of its cable channel investments .
In January 2002, MGM formed the MGM Entertainment Business Group with lawyer Darcie Denkert as president. This placed her in charge of MGM on Stage, the company's theatrical arm. Her friend Dean Stolber joined her as co-president of the theatrical unit. MGM Holdings Main article: MGM Holdings Bidding war and corporate reorganization
In 2002, Kerkorian put MGM up for sale again, with a suggested sale price of $7 billion. In 2004, many of MGM's competitors started to make bids to purchase the studio, beginning with Time Warner. It was not unexpected that Time Warner would bid, since the largest shareholder in the company was Ted Turner. His Turner Entertainment Group had risen to success in part through its ownership of the pre-May 1986 MGM library. After a short period of negotiation with MGM, Time Warner was unsuccessful. The leading bidder proved to be Sony Corporation of America, backed by Comcast and private equity firms Texas Pacific Group , DLJ and Providence Equity Partners. Sony's primary goal was to ensure Blu-ray Disc support at MGM; cost synergies with Sony Pictures Entertainment were secondary. Time Warner made a counter-bid , but on September 13, 2004, Sony increased its bid of US$11.25/share to $12/share , and Time Warner subsequently withdrew its bid of $11/share . MGM and Sony agreed on a purchase price of nearly $5 billion, of which about $2 billion was to pay off MGM's debt. From 2005 to 2006, the Columbia TriStar Motion Picture Group domestically distributed films by MGM and UA.
In 2006, MGM announced it would return as a theatrical distribution company. MGM struck deals with The Weinstein Company, Lakeshore Entertainment, Bauer Martinez, and many other independent studios, and then announced its plans to release 14 feature films for 2006 and early 2007. MGM also hoped to increase the amount to over 20 by 2007. Lucky Number Slevin, released April 7, was the first film released under the new MGM era. The Weinstein distribution agreement covered three years and got Weinstein films, but was ended three months early.
On May 31, 2006, MGM announced it would transfer the majority of its home video output from Sony Pictures Home Entertainment to 20th Century Fox Home Entertainment.
MGM also announced plans to restructure its worldwide television distribution operation. In addition, MGM signed a deal with New Line Television in which MGM would handle New Line's U.S. film and series television syndication packages. MGM served as New Line's barter sales representative in the television arena until 2008.
A tentative agreement was signed in Seoul on March 15, 2006, between MGM, South Korea-based entertainment agency Glovit and Busan city officials for a theme park scheduled to open in 2011. MGM Studio City was projected to cost $1.02 billion build on 245 acres owned by the city in a planned tourist district and contain 27 attractions, a film academy with movie sets, hotels, restaurants and shopping facilities. Glovit was expected to find funding and oversee management of the park, while MGM received a licensing agreement making them handle content and overall planning and the option to buy a 5%-10% share.
On November 2, 2006, producer/actor Tom Cruise and his production partner, Paula Wagner, signed an agreement with MGM to run United Artists. Wagner served as United Artists' chief executive. Cruise produced and starred in films for UA, and MGM distributed the films. MGM in the digital age
Over the next several years, MGM launched a number of initiatives in distribution and the use of new technology and media, as well as joint ventures to promote and sell its products. In April 2007, it was announced that MGM movies would be able to be downloaded through Apple's iTunes service, with MGM bringing an estimated 100 of its existing movies to iTunes service, the California-based computer company revealed. The list of movies included the likes of modern features such as Rocky, Ronin, Mad Max, and Dances with Wolves, along with more golden-era classics such as Lilies of the Field and The Great Train Robbery. In October, the company launched MGM HD on DirecTV, offering a library of movies formatted in Hi Def. Also in 2006, MGM licensed its home video distribution rights for countries outside of the United States to 20th Century Fox. MGM teamed up with Weigel Broadcasting to launch a new channel titled This TV on November 1, 2008. On August 12, 2008, MGM teamed up with Comcast to launch a new video-on-demand network titled Impact. On November 10, 2008, MGM announced that it will release full-length films on YouTube.
On April 14, 2008, a South Korea government agency announced that MGM and Incheon International Airport Corporation agreed to build MGM Studio Theme Park. The selected site was a 1.5 million square meter Yeongjongdo island property near the Incheon International Airport. However, the park was designed but never built. MGM files for bankruptcy
As of mid-2009, MGM had US$3.7 billion in debt, and interest payments alone totaled $250 million a year. MGM was earning approximately $500 million a year on income from its extensive film and television library, but the economic recession is reported to have reduced this income substantially.
Whether MGM could avoid voluntary or involuntary bankruptcy had been a topic of much discussion in the film industry. MGM had to repay a $250-million line of credit in April 2010, a $1-billion loan in June 2011, and its remaining US$2.7 billion in loans in 2012. In May 2009, MGM's auditor gave the company a clean bill of health, concluding it was still on track to meet its debt obligations. At that time, the company was negotiating with its creditors to either extend the debt repayment deadlines or engage in a debt-for-equity swap. Industry observers, however, questioned whether MGM could avoid a Chapter-11 bankruptcy filing under any circumstances, and concluded that any failure to conclude the negotiations must trigger a filing. MGM and its United Artists subsidiary were now producing very few films each year, and it was widely believed that MGM's solvency would depend on the box-office performance of these films . There was some indication that Relativity Media and its financial backer, Elliott Associates , had been acquiring MGM debt in an attempt to force the company into involuntary bankruptcy.
On August 17, 2009, chief executive officer Harry E. Sloan stepped down and MGM hired Stephen F. Cooper as its new CEO, a corporate executive who guided Enron through its post-2001 bankruptcy and oversaw the restructuring and growth of Krispy Kreme in 2005. Expectations were that Cooper was hired to act quickly on MGM's debt problems. On October 1, 2009, the studio's new leadership negotiated a forbearance agreement with its creditors under which interest payments due from September to November 2009 did not have to be paid until December 15, 2009.
MGM stated in February 2010 that the studio would likely be sold in the next four months, and that its latest film, Hot Tub Time Machine, might be one of the last four films to bear the MGM name. However, some stated that the company might continue as a label for new James Bond productions, as well as other movie properties culled from the MGM library.
MGM Holdings, Metro-Goldwyn-Mayer and 160 affiliates filed for Chapter 11 bankruptcy on November 3, 2010, with a prepackaged plan for exiting bankruptcy which led to MGM's creditors taking over the company. On December 20, 2010, MGM executives announced that the studio had emerged from bankruptcy. Spyglass Entertainment executives Gary Barber and Roger Birnbaum became co-Chairs and co-CEOs of the studio. Post-bankruptcy era
On January 4, 2011, MGM and Weigel Broadcasting announced plans to distribute MeTV nationwide. On February 2, 2011, MGM named Jonathan Glickman to be the film president of MGM. Six days later, MGM was finalizing a distribution deal with Sony Pictures Entertainment to handle distribution of its 4,000 films and DVDs worldwide and on digital platforms, including the two upcoming Bond films: Skyfall and Spectre. There were four studios who were bidding on the Bond distribution rights: Paramount Pictures, Warner Bros. Pictures, 20th Century Fox, and Columbia Pictures. Paramount was the first studio who dropped out of the Bond bidding. The deal was finalized on April 13, 2011. Post-bankruptcy, MGM also co-financed SPE's The Girl with the Dragon Tattoo. 20th Century Fox's deal with MGM handling its library distribution worldwide was set to expire in September 2011. However, the deal was renewed and extended on April 14, 2011 and, after five years, was renewed and extended again on June 27, 2016. It was expired in June 2020.
MGM moved forward with several upcoming projects, including remakes of RoboCop and Poltergeist, and released their first post-bankruptcy film Zookeeper, which was co-distributed by Columbia Pictures on July 8, 2011. The new MGM, under Barber and Birnbaum's control, focuses on co-investing on films made by another party, which handle all distribution and marketing for the projects. MGM handles international television distribution rights for the new films as well as its library of existing titles and also retains its in-house production service. In separate 2011 deals, the rights to MGM's completed films Red Dawn and The Cabin in the Woods were dealt to FilmDistrict as well as Lionsgate Films, respectively.
On October 3, 2012, Birnbaum announced his intention to exit his role as an MGM executive and return to 'hands-on' producing. He will remain with the studio to produce films on 'an exclusive basis'. In December 2012, Denkert retired as co-president of MGM on Stage after producing five Broadway and West End plays. In May 2014, MGM introduced The Works, a channel available in 31 percent of the country, including stations owned by Titan Broadcast Management.
In 2013, the Orion brand was revived as a television production label for a syndicated court show. The Orion Pictures name was extended in fourth quarter 2014 for smaller domestic and international video on demand and limited theatrical releases.
In March 2017, MGM announced a multi-year distribution deal with Annapurna Pictures for some international markets and including home entertainment, theatrical and television rights. Later on October 31, 2017, the two companies formed a US distribution joint venture called Mirror Releasing. However, this partnership will not be exclusive to all MGM films, as several of them will continue to be released through existing studio partners, such as Warner Bros. and Paramount. It also does not include newly relaunched Orion Pictures. On February 5, 2019, Annapurna and MGM rebranded and expanded their US distribution joint venture as United Artists Releasing, marking another revival of the United Artists brand, with the Orion Pictures distribution team and films joining the venture. The decision was made to coincide with the United Artists brand's 100th anniversary. Beginning with Operation Finale, a majority of MGM's films released by the UAR joint venture are released by Universal Pictures Home Entertainment while 20th Century Fox continued releasing a majority of the April 1986-August 2018 catalog until June 2020 and releases from Annapurna and Orion, with the exception of Creed II, which was released by Warner Home Video due to the film being a co-production between MGM and Warner Bros..
Following the Harvey Weinstein sexual abuse allegations in October 2017, MGM was listed as one of 22 potential buyers interested in acquiring The Weinstein Company. In October 2017, MGM's board renewed Gary Barber's contract as chairman and CEO until December 2022. In February 2018, Chris Brearton, the former media M&A attorney of Latham and Watkins, was appointed as chief operating officer. On March 19, 2018, MGM Holdings announced that Barber had been fired by the studio's board of directors. MGM gave no reason for his firing. For the interim, the company would be led by the newly formed 'Office of the CEO'.
In April 2019, MGM signed a two-year, first-look deal for films with Smokehouse Pictures, owned by George Clooney and Grant Heslov. The deal's first film is an unnamed John DeLorean film based on journalist Alex Pappademas' Epic magazine article 'Saint John', written by Keith Bunin and Clooney as director with a possibility of starring.
In April 2019, MGM made a multi-film non-exclusive creative partnership with AGBO Films to co-develop, co-produce and co-finance a slate from the MGM library. The deal includes a new film projects joint development fund with the first film under the deal to be a remake of The Thomas Crown Affair.
MGM agreed to a $100 million co-financing slate deal with Bron Creative in June 2019. The slate consisted of at least nine films including three Orion Pictures films.
MGM was the first studio to delay the film No Time to Die due to the COVID-19 pandemic. This was followed by an April 2020 layoff of 7% of employees.
A shuffle of top executives occurred in the first four months. Glickman left in January 2020 and replaced by Michael De Luca as chairman of the motion picture group. A motion picture group president, veteran executive and producer Pamela Abdy, was named in early April. Co-presidents of production Cassidy Lange, Adam Rosenberg left by May 1, 2020.
In May 2020, MGM made an investment, facilitated by its television group, in Audio Up podcast production studio, platform and network. Audio Up would also produce 5 podcasts per year for MGM and agreed to an exclusive first look for its works. Later that month, MGM agreed to a two-year film and television first-look development deal with Killer Films.
In 2013 and 2015, Starz Entertainment signed exclusive film licensing agreements with MGM for 585 movies and 176 television series. In August 2019, Starz found a film in the agreement on a streaming service which MGM agreed was under the agreement and had it pulled. Starz pressed them and MGM admitted in November that 244 films and television series were being shown on other platforms including Epix. MGM indicated that month that the license tracking system was fixed. Finding films on other platforms a month later, Starz found an additional 100 films on other platforms. With this seeming to diminish their channel's value to cable operators, Starz sued on May 4, 2020, to uncover all contract violations.
In December 2020, MGM began to explore a potential sale of the studio, with the COVID-19 pandemic and the domination of streaming platforms due to the closure of movie theaters as contributing factors. The company hired Morgan Stanley and LionTree Advisors to handle the process on behalf of the studio. On May 17, 2021, online shopping company Amazon entered negotiations to acquire the studio and even made a bid for about $9 billion. The negotiations are made with Anchorage Capital Kevin Ulrich. On May 26, 2021, it was officially announced that the studio will be acquired by Amazon for $8.45 billion. Headquarters
Since August 22, 2011, its headquarters have been in Beverly Hills, California. MGM rents space in a six-story office building. The 144,000-square-foot facility was originally constructed for the venerable William Morris talent agency, but had remained all but unoccupied until MGM's move because of the agency's merger with Endeavor Talent Agency in April 2009. MGM planned to house a private theater and a private outdoor patio in the building.
Prior to 2003, its headquarters had been in the Colorado Center in Santa Monica, California, occupying at least 150,000 square feet of space there. In 2000, MGM announced that it was moving its headquarters to a new building in Century City that was to be the first high-rise in Los Angeles to be completed in the 21st century. Upon the company's agreement to be its lead tenant halfway through the design building process, the structure became identified as the MGM Tower, opening in 2003. When MGM moved into the lavishly appointed spaces devised by Alex Yemenidjian, former chairperson and chief executive of MGM, Roger Vincent and Claudia Eller observed in the Los Angeles Times that 'Yemenidjian spared no expense in building out the studio's space with such Las Vegas-style flourishes as towering marble pillars and a grand spiral staircase lined with a wall of awards.'
Scott Johnson, the architect, designed the bottom third of the tower with extra-large floors so MGM executives could have outdoor decks. Seemingly no expense was spared, from the marble imported from Italy for MGM's area to the company's exclusive use of a dedicated private garage, security checkpoint, and elevator bank: all to enable celebrities who visited the complex discreet entry and exit, bypassing public spaces. One of three screening rooms placed in the tower was a 100-seat theater on the ground floor . The 14th-floor lobby housed the executive suites and a wall of Oscar statuettes for Academy Award-winning films. The street leading to the building's garage was renamed MGM Drive and a large MGM logo, illuminated at night, crowned the top of the building. As of December 2010, MGM rented 200,000-square-foot of space in the MGM Tower at a cost of almost $5 per square foot per month.
Emerging from bankruptcy protection in 2010, MGM announced that it planned to relocate the headquarters to Beverly Hills as part of an effort toward removing almost $5 billion in debt since the lease in Century City was not scheduled to expire until 2018. Vincent and Eller said that MGM's per square foot monthly rent would be far lower in the Beverly Hills building than in the MGM Tower. Larry Kozmont, a real estate consultant not involved in the process, said 'It's a prudent move for them. Downsizing and relocating to a space that is still prominent but not overly ostentatious and burdened by expenses is fundamental for their survival.' MGM vacated its namesake tower on August 19, 2011.