Amazon Puts MGM’s Content Library At $3.4 Billion

When Amazon bought MGM last month, it estimated the deal to be worth roughly $8.5 billion. However, the ecommerce giant revealed on Friday that the studio's true estimated value of its film and television catalog is less than half that amount.

Amazon outlined the deal's components in its 10-Q SEC filing, which concluded on March 17. The assets "mostly" include $3.4 billion worth of video content, but the acquisition price also includes $4.9 billion worth of goodwill, which is "the established reputation of a business that is seen as a valuable asset."

More than 4,000 film titles and 17,000 television episodes are included in MGM's extensive collection, including franchises like James Bond, Rocky, and Legally Blonde. "Reimagine and develop MGM's intellectual property for the 21st century," as Amazon founder and executive chairman Jeff Bezos phrased it last year.

Amazon paid $6.1 billion in cash for MGM Holdings (net of cash acquired) and absorbed $2.5 billion in debt, which it stated it "repaid immediately after closing" in a filing. Due to the short period since the MGM acquisition, the assessment of certain assets and liabilities is provisional.

There was no pro-forma for Q1 results that took into account MGM's purchase because, according to Amazon, the acquisition had no significant impact on the company's consolidated financials. For Amazon's huge business operations, the acquisition-related costs "were not significant," according to the company. A total of $36.6 billion in cash and equivalents were on hand at the end of March for the internet giant's books.

Michael De Luca, MGM's motion picture group chairman, and Pamela Abdy, MGM's motion picture group president, quit last week following Amazon's decision to terminate the arrangement.