Amazon Values MGM’s Content Library at $3.4 Billion

variety.com:

Todd Spangler NY Digital EditorAmazon had pegged its deal for MGM, which it closed last month, as worth around $8.5 billion.

But the actual estimated value of the studio’s library of movies and TV shows is less than half that, the ecommerce giant disclosed Friday.In its 10-Q filing with the SEC, Amazon detailed the components of the MGM deal.

The assets “primarily consist of $3.4 billion of video content,” with the deal price including $4.9 billion of goodwill, which represents “the established reputation of a business regarded as a quantifiable asset.”MGM’s catalog comprises more than 4,000 film titles and 17,000 TV episodes, including franchises like James Bond, Rocky and Legally Blonde.Amazon bought MGM Holdings for $6.1 billion in cash (net of cash acquired) and assumed $2.5 billion of debt, which “we repaid immediately after closing,” it said in the filing.

Amazon added, “Due to the limited amount of time since the MGM acquisition, the valuation of certain assets and liabilities is preliminary and subject to change.” According to Amazon, “the effects of the MGM acquisition were not material to our consolidated results of operations,” and therefore the company did not provide a pro-forma breakdown of Q1 results that incorporated MGM.