Resignation Of Amazon Studio's Roy Price Was 'A Blessing In Disguise' For Investors

Hollywood’s wave of sexual harassment claims is even hitting Amazon.com, Inc. AMZN.

Amazon reported Tuesday that studio head Roy Price resigned on allegations from executive producer Isa Hackett. The company had initially suspended Price and instituted Amazon Studios COO Albert Cheng as interim head.

Even before that, the executive had drawn criticism for his ties to producer Harvey Weinstein and alleged disregard of complaints. In a series of tweets last week, actress and Weinstein accuser Rose McGowan challenged Amazon CEO Jeff Bezos to react:

“I told the head of your studio that HW raped me. Over & over I said it. He said it hadn’t been proven. I said I was the proof…. I had already sold a script I wrote to your studio, it was in development. When I heard a Weinstein bailout was in the works...I forcefully begged studio head to do the right thing. I was ignored. Deal was done. Amazon won a dirty Oscar…. I called my attorney & said I want to get my script back, but before I could, #2 @amazonstudios called to say my show was dead… I am calling on you to stop funding rapists, alleged pedos and sexual harassers. I love @amazon but there is rot in Hollywood”

Will He Be Missed?

Price’s departure was more abrupt than expected, but it was expected nonetheless. Loop Capital considered it a long time coming.

“We believe some investors may view Price's resignation as a negative, particularly given the reputational implications and Amazon's plans to ramp up Prime Video content production,” analyst Anthony Chukumba wrote in a Wednesday note. “We think the opposite is true: Amazon Studios was floundering under Price's leadership (with the company's 2017 Emmy showing particularly embarrassing), and we believe even absent the sexual harassment allegations he would have eventually been shown the door anyway.”

The division had been struggling amid low viewership, internal conflict, and consistent award concessions to competitors Netflix, Inc. NFLX and Hulu.

Amazon is reportedly heightening its investment in original content, calling in talent from Maya Rudolph to Seth Rogan for its 67 TV series and 20 movies now in development.

Loop Capital expects any Price-related disruptions to production timelines to be insignificant to Prime Video, which, in itself, isn't significant to Amazon.

Chukumba reiterated his Buy rating on the stock with a $1,200 price target, and at time of publication, shares were trading at $1,009.13.

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