What’s Next for Amazon Studios After Top MGM Movie Execs’ Surprise Exit | Analysis

The abrupt departure of MGM Motion Picture Group chairman Michael De Luca and the group’s president Pam Abdy sent shockwaves thoughout the film industry this week — a sign that Amazon will be putting its own stamp on the almost-100-year-old legacy studio that it acquired for $8.5 billion in March.

“Nobody saw that coming,” one high-level agent told TheWrap from CinemaCon, the annual trade show for the movie theater industry.

Others wondered about the direction of MGM and its deep slate of film projects in the absence of two established industry figures who’ve overseen hit franchises like James Bond, “Creed” and the upcoming “Legally Blonde 3” as well as acclaimed awards bait like “House of Gucci” and “Licorice Pizza.”

And others wondered if this was a sign that MGM Worldwide Television Group chairman Mark Burnett might soon head for the exit door as well.

An executive shakeup was not completely unexpected since Amazon Studios already has a top boss in Jennifer Salke, the former NBC Entertainment president who has headed the streamer’s filmed content division since 2018. “It doesn’t surprise me that this happened because Amazon was already a studio and had its own people in place. And there’s only so much room at the top,” Bryan Sullivan, a partner at Early Sullivan Wright Gizer & McRae who focuses on entertainment and investment, told TheWrap.

Even if logic might lead to the conclusion that De Luca and Abdy would make an exit as behemoth Amazon took over MGM, nobody was entertaining the possibility on Tuesday night at a cocktail party at Las Vegas’ The Palm thrown by Imax, where shrimp was in abundance and masks were totally absent. Executives from Warner Bros., Universal and other major companies talked about returning to theaters and the renewed robust slates of some studio, and some talked about the expectation that Burnett would exit – but not the movie team, which happened the following morning.

Both De Luca and deputy Abdy are regarded as talented industry executives, with long résumés of successful filmmaking and a deep bench of talent relationships. Those struck many as qualities that would be important to any successful movie strategy. “The biggest question is, where are they going?” Sullivan asked. “And are they going to have some sort of relationship with Amazon going forward?” (Amazon did not announce any production deal with either De Luca or Abdy, a typical maneuver when a high-level exec departs a senior role.)

Reps for Amazon and MGM did not respond to requests for comment for this story.

Still, it seems that change — constant and rapid — is the order of the day in Hollywood. And what Amazon’s strategy will be, especially as regards to its theatrical route, is top of mind for industry insiders.

At a party after Universal’s presentation on Wednesday in Las Vegas, which was wall to wall with industry veterans, one studio executive sneered at the move. “Amazon just wants content,” this executive said. “They don’t care about great content.”

A high-level agent agreed that De Luca’s resignation came as a major shock, even to more junior MGM executives. As recently as Tuesday, the agent said, many expected that things would be “business as usual” under the new Amazon bosses and even those within the TV unit and MGM subsidiary Orion were awaiting Amazon’s next town hall before official news was handed down.

However, other insiders said that De Luca might have been inclined to leave no matter what, with the expectation that a new film person could be brought in to lead the unit. Neither De Luca nor Abdy would be happy reporting to Salke, the agent said, let alone to the streamer’s newly promoted movies head, Julie Rapaport.

Another insider with knowledge of Amazon described working for a company of such size “a political nightmare” — something that just might not have suited the outgoing executives.

Indeed, many industry veterans question if MGM can retain an identity or autonomy as a division of Amazon, with the agent fearing that in the long run, the Orion and MGM units could ultimately feed “into the machine” or become merely a co-production label for branding purposes. “Amazon has such a pervasive culture,” the agent said. “I don’t see them wanting competing interests.”

Still, Amazon Studios has traditionally operated at a much higher budget than MGM, with a $13 billion content spend for 2021 that dwarfed the purchase price for MGM. Salke has had major success with tentpole properties like “The Tomorrow War” and “Without Remorse,” as well as “Reacher” on the TV side, and recently won the rights to produce a live-action “Voltron” movie from the director of “Red Notice,” Rawson Marshall Thurber.

Despite Amazon’s involvement, James Bond producers Barbara Broccoli and Michael G. Wilson have been adamant that future 007 installments would remain theatrical releases, and an individual with knowledge of the projects added that it would be unlikely that bigger tentpoles already in the can like “Creed III” would suddenly move to streaming. Other projects in postproduction include the Sylvester Stallone action film “Samaritan,” the Emmett Till biopic “Till” and Ron Howard’s “Thirteen Lives” about the true 2018 story of the Thai soccer team trapped in a cave.

In addition, MGM has other buzzy projects in the works, including new films from Guy Ritchie and Luca Guadagnino, several Channing Tatum projects as part of his company’s first look deal with MGM, an adaptation of a Ta Nehisi-Coates comic book, an adaptation of the musical “Porgy and Bess,” “Project Hail Mary” with director/producers Phil Lord and Chris Miller, and even Mattel’s Polly Pocket toys IP. Producers of several of these projects didn’t immediately respond to requests for comment on their current status at MGM/Amazon.

Sullivan said it’s unlikely that any of these projects will be cast adrift completely as De Luca and Abdy step away from their leadership roles. Even without having their contracts in hand to study, “most C-level executives remain with the project in some capacity” after an exit, Sullivan said. The executives could also form a production company with financing from Amazon rather than bolt to another studio or streamer.

De Luca and Abdy’s exit also underscores that Amazon was less interested in acquiring MGM as an active studio than in the storied company’s rich library. MGM boasts a vault of 4,000 film titles and 17,000 hours of TV programming that includes the “Rocky” movie franchise, James Bond and the Emmy-winning “The Handmaid’s Tale.”

“At Amazon, there’s already a studio, they don’t need MGM’s production staff or their new projects,” Sullivan said. “The library has the biggest value.”

Even as MGM’s film division pares down, many industry watchers are also waiting for another shoe to drop with Burnett. There has long been speculation that Burnett would be on his way out after the Amazon deal closed — especially since Salke is already well-established on the TV side — though an individual close to the executive said he had not decided on his next steps.

Burnett, whose contract expires this year, has a track record with “The Apprentice” and “The Voice” from his days at NBC, but he has struggled to produce any new unscripted hits since he was named chairman of the TV group in 2018. “The Handmaid’s Tale” and “Fargo” have become prestige hits for the studio, but there have been reports that he’s butted heads with other MGM execs.

“Jen is really liked by her team, and Mark has a lot of detractors,” one veteran agent who asked not to be named previously told TheWrap.

“I would be surprised if Mark Burnett sticks around for a long time — very surprised,” Stephen Galloway, dean of Chapman University’s Dodge Film School, said after the deal closed in March.

Sharon Waxman contributed to this report.