Amazon in talks to buy MGM for $9 billion: RPTS

Yahoo Finance’s Brian Sozzi, Myles Udland, and Julie Hyman discuss the potential Amazon-MGM deal and what it would mean for the streaming landscape.

Video transcript

JULIE HYMAN: We are now going to turn to another story, a continuing story really, that we have been following and that has to do with consolidation within media. Amazon is reportedly in talks to acquire MGM, the movie studio for about $9 billion. Various sources reporting that, first The Information, then Variety, and others. And as we know, there's Amazon Prime that has that video component. But this would really beef it up considerably. You see there the library that MGM has in addition to the new productions that it's making, right.

So the deal according to Variety is being orchestrated and negotiated by Mike Hopkins, who's the senior vice president of Amazon Studios and Prime Video. We don't know if the deal is going to get done, but you know as we were discussing this morning, Myles, this is really-- it's a different calculus than it is for some of the other, for Discovery, for example, to buy more content, because Amazon's main business is not content, right? You could argue it's either stuff or web services, cloud services, depending on how you look at it.

MYLES UDLAND: Yeah, I mean, I think another thing that this kind of brings up for me, and we talked about this with Craig Moffett yesterday a little bit, that WarnerMedia, Discovery deal, on the one hand, I mean it's such a big deal, it's $43 billion deal and you think like OK, there's the top, right, there's the consolidation in the media space. But you know, Craig and a number of other analysts all started immediately looking at Comcast and the move that they might need to make and sort of the chairs are just beginning to spin here. And obviously, we're a much smaller part of the media ecosystem but you know, our parent company was just-- or our parent company spun us off and we're going to have new owners, I guess sometime later this year, for $5 billion.

And so all those deals are-- and this is a $9 billion deal. So all these deals are part of what clearly is a reshuffling in how you conceive of the bundle. And to your point, Julie, about MGM or really content being an appendage of Amazon. I think Amazon is content, we see with the NFL, they'll dip their toe into a certain part of the ecosystem, they'll get a toehold, they'll see what works, they'll see what doesn't. The $9 billion does not matter to them. And I think they are going to kind of take it from there. And I see this as an Amazon acknowledging that this is very, very much not over in terms of the reshuffling, the re-consolidation, the re-imagining of this nightmare bundle, de-bundling, whatever you want to call it, that we're looking at here on the screen.

JULIE HYMAN: I mean, just on an anecdotal basis, of the streaming services I have, Amazon definitely the one I watch the least but I still pay the fee for Amazon Prime because all the other stuff it provides. So we'll see how this plays out if it actually makes Amazon Prime more attractive for some subscribers.