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Amazon snaps up 'James Bond' franchise owner MGM for $8.45 billion as streaming war heats up

New York - The studio also owns the Epix cable channel and makes popular TV shows including 'Fargo', 'Vikings'.

Amazon.com Inc said on Wednesday it is buying MGM, the fabled US movie studio home to the "James Bond" franchise, for $8.45 billion, giving it a huge library of films and TV shows and ramping up competition with streaming rivals led by Netflix and Disney+.

Privately held MGM, or Metro Goldwyn Mayer, was founded in 1924, and also owns the Epix cable channel and makes popular TV shows including "Fargo", "Vikings" and "Shark Tank."

"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," said Mike Hopkins, senior vice president of Prime Video and Amazon Studios.

Amazon's Prime Video faces a long list of competitors including Netflix Inc, Walt Disney Co's Disney+ , HBO Max and Apple Inc's Apple TV+. The companies are increasing spending and expanding in international markets, aiming to capture the pandemic-led shift to binge-watching shows online.

The proliferating streaming services are also scrambling for brands that they can expand and libraries of older shows and movies. Analysts have said this is a big motivation for another round of consolidation of media properties after a brief hiatus during the pandemic.

Underscoring the trend, AT&T Inc announced a $43 billion deal last week to spin out its WarnerMedia business and combine it with Discovery Inc, one of the most ambitious yet in the streaming era.

Lucrative franchise rights

Amazon has picked up Academy Awards over the years and slowly moved from art-house fare toward content with wider appeal. The MGM acquisition accelerates that move, giving it rights to James Bond, one of the most lucrative franchises in film history that’s earned nearly $7 billion at the box office globally, according to MGM. MGM also has a massive library of classic films.

The potential to mine this intellectual property, by making new shows and films based on popular characters, will help Amazon draw viewers to Prime, two former Amazon executives told Reuters.

Still, efforts by Amazon to profit off MGM's library won’t be easy, or cheap.

In many cases, MGM’s content is tied up in multi-year deals with television networks, the former Amazon executives said. Amazon cannot air MGM’s reality show “The Voice,” for instance, which contractually is in the hands of NBC.

Bringing a new installment of the “James Bond” saga to Prime viewers may be a particularly difficult task, the sources said. The terms under which MGM acquired the franchise leave control in the hands of the Broccoli family, the Bond films’ producers.

News of the acquisition followed quickly on the return of Jeff Blackburn, Amazon’s former senior vice president overseeing content and M&A, who had left early this year.

Incoming CEO Andy Jassy had particular trust in Blackburn after decades at Amazon together, hoping he'd shepherd a complicated merger, the sources said.