Yahoo Finance Amazon Bid for MGM to Get FTC Antitrust Review (Report)
Amazon’s $8.5 billion deal to acquire MGM will be subject to an antitrust review by the Federal Trade Commission, the Wall Street Journal reported, citing anonymous sources.
Last month, Amazon announced a definitive agreement to acquire MGM and its well-stocked library of 4,000 movies and 17,000 TV shows, including the storied James Bond film franchise.
More from Variety
Jack Huston Joins Amazon's Lulu Wang, Nicole Kidman Drama Series 'Expats'
'Blacula' Reboot in the Works From MGM, Bron and Hidden Empire Film Group (EXCLUSIVE)
'The Tomorrow War' Being Promoted by Amazon on Shipping Boxes (EXCLUSIVE)
The FTC and the Justice Department share oversight of reviewing the antitrust implications of significant proposed mergers and acquisitions. The FTC recently got the green light after a recent interagency meeting with the DOJ to review the Amazon-MGM deal, given that the FTC currently is leading a broader antitrust probe into Amazon’s business practices, per the WSJ report.
Amazon declined to comment on the Journal report. An FTC spokeswoman said the agency “does not confirm the existence of investigations, and we have no further comment on this.”
Word that the FTC will be heading up the review of Amazon-MGM comes after Lina Khan — an outspoken critic of big tech companies, including Amazon — was sworn in as the agency’s chair on June 15. President Biden appointed Khan, a Democrat, as an FTC commissioner in March, and last week he named her to head the agency.
Amazon hasn’t said when it expects the MGM deal to close. The ecommerce giant is expecting to mine MGM properties like the James Bond, Pink Panther and Rocky franchises for new originals to feed into the global Prime Video service. If it secures regulatory approval, the MGM deal would be Amazon’s second-largest acquisition, behind the company’s $13.7 billion purchase of Whole Foods in 2017.
With respect to antitrust concerns, Amazon’s position has been that competition in the entertainment industry is already intense — and particularly so in the streaming space — and that bringing MGM into the Amazon fold will result in more choice and more content for consumers.
It’s also worth noting that MGM is among the smallest of Hollywood’s established studios with approximately 1% of the total 2020 box office gross in North America, compared with approximately 80% for the top five distributors: Sony Pictures, Universal Pictures, Warner Bros., Disney/20th Century Fox/20th Century Studios and Paramount Pictures.
In addition, Amazon’s $8.45 billion price tag is much smaller than other recent acquisitions in the entertainment industry that have obtained — or survived — regulatory review. Those include Disney’s $71 billion deal for Fox Entertainment in 2019 and AT&T’s $85 billion acquisition of Time Warner (the latter of which the DOJ tried and failed to block in court).
Best of Variety
Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
