The streaming content wars are providing opportunities for lucrative mergers and acquisitions work for a bevy of Big Law firms.
Paul, Weiss, Rifkind, Wharton & Garrison and Latham & Watkins are counseling Metro-Goldwyn-Mayer Inc. on the film studio’s nearly $9 billion sale to Amazon.com announced Wednesday. Cravath, Swaine & Moore is representing Amazon.
Jeffrey Marell, co-head of the M&A practice at Paul Weiss, is leading a team of lawyers for MGM on merger-related matters that includes corporate partners Brian Lavin and Cullen Sinclair, as well as associate Hillary DiLorenzo. Cravath corporate partners Erik Tavzel and Andrew Elken are at the helm of the team advising Amazon.
The proposal marks the latest salvo in the quest by Amazon and other companies to move from cable to streaming media. The bid for MGM also marks Amazon’s largest deal since its nearly $14 billion acquisition of Whole Foods Market Inc. in 2017.
Big-ticket transactions such like the Amazon-MGM union and Discovery’s tie-up with AT&T’s WarnerMedia can create large pay days for the investment banks advising those companies, as well as the sizeable roster of lawyers lining up to represent such enterprises on market-moving combinations.
Paul Weiss is also representing privately held media company Advance Publications Inc., the largest shareholder in Discovery Inc., on its blockbuster agreement last week to merge with AT&T Inc.’s WarnerMedia LLC in a $43 billion deal.
Sinclair is part of a Paul Weiss team counseling Advance on the Discovery deal that’s led by former corporate chair Robert Schumer—the younger brother of Sen. Chuck Schumer (D-N.Y.)—and former deputy corporate chair Ariel Deckelbaum.
Other Paul Weiss lawyers advising Advance include finance partner Tracey Zaccone, capital markets co-head John Kennedy, tax partners Jeffrey Samuels and Brian Krause, M&A litigation co-chair Jaren Janghorbani, antitrust partners Charles “Rick” Rule and Aidan Synnott, and antitrust partner Lewis Clayton.
Sullivan & Cromwell has taken the lead for AT&T on the merger between WarnerMedia and Discovery, which is using the tax-advantaged Reverse Morris Trust structure and expected to close by mid-2022.
Debevoise & Plimpton and Proskauer Rose are both advising Discovery, whose board of directors has turned to Wachtell, Lipton, Rosen & Katz for counsel.
Cravath Moves to Amazon Side of Table
Amazon, which turned to Sullivan & Cromwell to advise on its Whole Foods acquisition, has previously been across the negotiating table from Cravath.
The Washington Post Co. was advised by Cravath on the $250 million sale of its namesake newspaper in 2013 to Amazon founder, president, and outgoing CEO Jeffrey Bezos. Cravath also counseled Atlas Air Worldwide Holdings Inc. on the cargo airline’s 2016 sale of a stake to Seattle-based Amazon. JPMorgan Chase & Co. tapped Cravath to handle a $7 billion revolving credit facility last year for Amazon.
A Cravath spokeswoman didn’t respond to a request for comment about whether the firm has previously handled a major M&A deal for Amazon. An Amazon spokeswoman said the company, which recently disclosed a $17 million pay package for its general counsel David Zapolsky, doesn’t discuss its external advisers.
Amazon and MGM said in a press release that their merger is subject to regulatory approvals and other closing conditions. A successful acquisition by Amazon, which earlier this year agreed to pay about $1 billion annually to the National Football League for streaming broadcast rights, could be a boon to Cravath’s bottom line.
When Cravath counseled Time Warner Inc., a former parent of WarnerMedia, on its ultimately ill-fated mega-merger with America Online Inc. at the turn of the century, the New York-based firm reaped a $35 million success fee, reportedly one of the largest-ever at the time for such a transaction.
One party in the Amazon-MGM deal stands to reap the benefits from its completion.
MGM, which emerged from bankruptcy more than a decade ago under new ownership, is controlled by Anchorage Capital Group LLC. The New York-based hedge fund, whose CEO is Harvard Law School graduate Kevin Ulrich, is poised to make a $2 billion profit from the sale of MGM, according to Bloomberg News.
Ulrich and Anchorage general counsel Jason Cohen, a former associate at Simpson Thacher & Bartlett, didn’t respond to requests for comment about their legal advisers. Nor did MGM chief legal officer Lesley Freeman, an O’Melveny & Myers alum who joined the Beverly Hills, Calif.-based movie studio in 2016.
Latham partners Kendall Johnson and Rick Offsay, both of whom joined the firm through its addition in late 2014 of a Century City, Calif.-based entertainment law team from O’Melveny, are handling entertainment-related matters for MGM on its deal with Amazon. Christopher Brearton, a former O’Melveny partner who also made the switch to Latham, joined MGM in 2018 as its COO.
Other lawyers from Latham representing MGM on its sale to Amazon include corporate vice chair Jason Silvera; antitrust partners Amanda Reeves, Kelly Fayne, Lars Kjolbye, and David Little; employee benefits partner Julie Crisp; and data and technology transactions partners Ghaith Mahmood and counsel Robert Blamires.