Amazon’s entertainment strategy has evolved as streaming services have proliferated. Indie films like “Manchester by the Sea” and unconventional series like “The Marvelous Mrs. Maisel” and “Transparent” gave Amazon a foothold in Hollywood; domination will require a steady supply of hits that appeal to wide audiences.
Amazon’s appetite for movies became ravenous during the pandemic. It paid $125 million for the rights to “Coming 2 America,” $80 million for “Borat Subsequent Moviefilm” and $200 million for “The Tomorrow War,” a Chris Pratt adventure that will arrive on Prime on July 2. Amazon also has Oscar ambitions, buying the rights to “Sound of Metal,” which was nominated for best picture and other top awards at this year’s ceremony and won the Oscars for sound and editing.
The problem: Amazon Studios has had limited bandwidth, most of which is tied up with television series — including a coming “Lord of the Rings” adaptation that is believed to be the most expensive show ever made, with a one-season budget of $465 million.
MGM managers could help. Michael De Luca, MGM’s movie chairman, has a track record that includes, at various companies, the “Rush Hour,” “Austin Powers” and “Fifty Shades of Grey” franchises. When it comes to making its own hit films, Amazon has long struggled. In one debacle from 2015, Amazon spent lavishly to bring Woody Allen into its fold and later terminated the contract, prompting lawsuits.
MGM also has a 17,000-episode television library and a TV studio that makes “Vikings,” “The Handmaid’s Tale,” “Fargo” and various “Real Housewives” shows. In 2014, MGM acquired Mark Burnett’s production company, One Three Media, which holds rights to competition series like “The Voice.” Mr. Burnett, a contentious figure in Hollywood because he helped shape Donald J. Trump’s image with “The Apprentice” and remained close to him during his divisive presidential term, serves as MGM’s television chairman.
Anchorage Capital, a New York investment firm, has been the majority owner of MGM for more than a decade. Before that, MGM was tossed between owners. Bitten by falling DVD revenue, the studio eventually filed for bankruptcy to eliminate some $4 billion in debt. It was worth about $2 billion in 2010, according to analysts.
Kevin Ulrich, Anchorage’s chief executive and MGM’s chairman, formally put the studio on the block late last year. Anchorage has been under pressure from various stakeholders to exit the investment, with some agitators complaining that Mr. Ulrich was overly enamored with Hollywood and should have sold years ago.