In a bid to secure content for its burgeoning video-on-demand service, cable giant Comcast on Monday inked an agreement with Sony Pictures Entertainment and the equity partners in Metro-Goldwyn-Mayer to offer Sony- and MGM-owned films on Comcast systems and use content from the two studios to launch new channels.
As part of the content distribution pact, Comcast will consider buying a stake of as much as 20 percent, or $300 million, in the Sony consortium that agreed in principle on Monday to buy MGM for $12 a share.
Sources said the agreement Comcast struck with Sony helped the film studio put together a last-minute winning bid for MGM. Sony, along with a team of private-equity partners, agreed to pay $3 billion cash, plus the assumption of $1.9 billion in debt, for MGM.
In addition to distributing MGM and Sony content on Comcast’s VOD platform, the partners will create a joint venture, managed by Comcast, and launch new channels using content from the two studios.
Gaining content has been an important piece of the puzzle for Philadelphia-based Comcast. Earlier this year the company made an unsolicited $54 billion bid for the Walt Disney Co. on the belief that the cable company could leverage Disney’s content on its platform of 21.5 million subscribers.
Comcast Inks Content Distribution Deal as Part of MGM Sale
Sep 14, 2004 • Post A Comment