Amazon has assigned a value of $3.4 billion to MGM’s film and TV operation, which it acquired along with the rest of the fabled Hollywood company in a deal that closed last March.
The number appeared in an SEC filing this morning related to the company’s first quarter results. (Companies typically issue an earnings release with select numbers and then follow up later with a more thorough, official accounting for the SEC.) Amazon’s lackluster quarterly report yesterday, which included an unexpected loss and a soft outlook for the current quarter, has rattled investors and sent the tech giant’s stock down 12% so far today.
Amazon notes in the filing that the MGM deal closed March 17. It spent $6.1 billion in cash and assumed $2.5 billion in debt, repaying the debt immediately after the deal close.
Key library titles and franchises in the MGM and United Artists stable include film and TV franchises like James Bond (though the rights are limited), Stargate, Creed, Legally Blonde, Shark Tank and The Handmaid’s Tale.
Along with the film and TV content, Amazon pegged the goodwill value of MGM at $4.9 billion, most of which it is allocating to its North America segment. Goodwill, for accounting purposes, refers to less-tangible assets like a brand name, customer relationships or proprietary technology.
Not surprisingly for a company worth nearly $1.3 trillion, the MGM deal was deemed “not material” to Amazon’s overall financial results, the filing said. No pro forma results of operations were included with the company’s full quarterly report. As with other tech companies like Apple, Amazon’s video operations have not historically been broken out as separate line items in financial reports.
Acquisition-related costs were “not significant,” the filing added.