Field executives are surprised that Amazon is in negotiations to obtain Metro-Goldwyn-Mayer in a deal that could arrive at $9 billion. Their shock arrives from a belief that the price tag tag seriously overvalues the studio powering James Bond, the Pink Panther and “Legally Blonde.”

Other companies have kicked the tires on MGM at many details throughout a cease-and-start out revenue method that has been dragging on for months. Sector insiders say that the correct value of the studio is extra in the $5 billion to $6 billion array together with the assumption of some debt. Even then, they are skeptical that MGM’s prize asset, its stake in the 007 franchise, can be adequately monetized.

That’s for the reason that of the unprecedented creative control which is held by Eon Productions and its operator the Broccoli family members, who have been stewards of the film sequence dating again to Bond’s initial on-monitor visual appeal in 1962’s “Dr. No.” Under a deal initially hammered out by Albert “Cubby” Broccoli, MGM has the suitable to finance and distribute all of the Bond flicks and splits the profits with EON. Nonetheless, Broccoli’s heirs and Eon’s chiefs, Barbara Broccoli and her 50 %-brother Michael G. Wilson, still have last say on all the things from the film’s advertising and marketing and distribution plans to whoever will slip into Bond’s tuxedo when Daniel Craig hangs up the function.

Insiders believe that that Broccoli and Wilson would possible nix any ideas to debut Bond films on Amazon’s streaming services Key Video clip and would insist on a theatrical release, as is their contractual right. That was a key stumbling block when MGM briefly floated the chance of offering the COVID-delayed Bond sequel “No Time to Die” to Apple for north of $600 million. The producers have also been resistant to have Bond pop up in spinoffs or television demonstrates, the sorts of ancillary houses that could demonstrate hugely beneficial. Moreover, the films have been seriously certified to cable networks and streaming platforms, which could complicate issues.

“If Barbara isn’t on board with this, items could be very hard,” says an executive who has worked on Bond films.

Moreover, the franchise is in changeover. Craig is leaving the job following 5 movies and there is real issue that his really hard-living womanizer character may perhaps not have as a great deal resonance with younger generations. That is problematic given that much of the value of MGM is banked on Bond continuing to seduce audiences for years to arrive.

But MGM’s brass appears to be undeterred. Two months back, Michael De Luca, chairman of the company’s motion image group, and other executives produced a formal presentation to Amazon. The PowerPoint was viewed by Mike Hopkins, senior VP of Amazon Studios and Prime Video, who is an advocate for the offer. Just one individual in the know mentioned the parties are in an exceptional negotiating window.

Representatives from Amazon and MGM did not immediately react to requests for comment.

Other providers have been down this highway with MGM right before only for talks to collapse. MGM was conversing to Apple in early 2020 right before COVID upended the landscape, and other legacy studios took a seem at the firm.

The timing might do the job to MGM’s benefit. AT&T is spinning off WarnerMedia and combining it with Discovery, substantially maximizing that company’s information offerings at a time when it is making an attempt to appeal to much more subscribers for HBO Max. That may possibly leave other rivals hunting to get articles producers, and MGM, along with Lionsgate and AMC, is between the couple digestible media qualities that could possibly be on supply.

The sale approach has been on and off mainly because board chair Kevin Ulrich, whose hedge fund Anchorage Funds is a significant shareholder, is not confident he would like to market even as MGM’s other investors are pressuring him to cash out at a time when streamers are wanting to bolster their content material arsenals.

Goldman Sachs, JP Morgan and Morgan Stanley have represented MGM at several periods in the past number of decades and the full method has been “weird,” according to an insider, owning to a blend of intense bankers and buyers with diverse agendas.

“It’s been like people indicating ‘My home is not for sale but what would you pay back me for it? Oh no, it’s not for sale,” as one human being described it.

Beneath De Luca, the film facet of MGM has been making the form of splashy acquisitions that could posture it for a sale, lining up assignments like Paul Thomas Anderson’s “Soggy Bottom” and Ridley Scott’s “House of Gucci.” Sources reported the $9 billion valuation financial institutions a large amount on MGM’s forthcoming slate creating powerful box business returns and Tv licensing revenue.

The serious benefit of MGM is its library, nevertheless it has been closely exploited. The company boasts 4,000 film titles, including classics and hits these kinds of as “Four Weddings and a Funeral,” “Silence of the Lambs,” “The Birdcage” and “Stargate.” Many of its most well-known films, this sort of as “Rocky” collection, have presently been rebooted as the “Creed” movies, or unsuccessful to be revived, as was the circumstance with “Ben-Hur” and “RoboCop.” Other franchises, such as Peter Jackson’s “The Hobbit,” have wrapped up.

The business has had accomplishment on television, developing the likes of “Fargo” and “The Handmaid’s Tale,” as well as in the unscripted realm with “The Voice” and “Survivor,” but rival studios were being still astonished by the $9 billion price tag tag. Resources pointed out that 4 yrs back, Amazon paid out $13.7 billion for the entirety of the Entire Foods supermarket chain, only a number of billion more than it may well spend for MGM.