Kid Rasta
07-27-2005, 05:26 AM
From NY Post:
NBC Universal is in discussions to acquire DreamWorks SKG, the private live-action film business left behind after the company took public its animation division last year, The Post has learned.
The deal, if completed, would be another sign that the ambitions of the powerful Hollywood trio that formed the company 11 years ago have never been fully reached.
While talks with Universal are ongoing, sources familiar with the matter said they are still at an early stage and that no deal is imminent.
The potential sale comes as the company's animation unit — which was spun off last year into a separate publicly traded company — faces a series of troubles, including a falling stock price and a Securities and Exchange Commission investigation.
While three sources familiar with the matter confirmed that DreamWorks has been shopping its live action unit, a spokesperson for the company denied it was for sale. A spokesperson for Universal declined to comment.
DreamWorks does not break out figures for its live action unit — which remains a private company — but public comments earlier this year by David Geffen, who has taken the reins of the unit, suggest that management believes it is worth about $1 billion.
Geffen, along with director Steven Spielberg and ex-Disney exec Jeffrey Katzenberg, founded DreamWorks in 1994.
In an interview earlier this year at the 92nd Street Y in Manhattan, Geffen appeared to downplay the importance of live action to DreamWorks' bottom line.
"The animation company has a market cap of over $4 billion, and the whole company has a market cap well over $5 billion," he said, according to a transcript published by BusinessWeek. "The animation business is infinitely more profitable."
A few months ago, DreamWorks began putting out feelers to other studios looking for potential buyers, sources said, but talks with Universal Studios have become the most advanced. DreamWorks and NBC Universal — Universal Studio's parent — already have an extensive television production partnership.
The studio, which has won Oscars in the past for movies including "Gladiator" and "American Beauty," has lately fared poorly at the box office. Most recently, its hoped-for summer blockbuster "The Island" flopped in its opening weekend, taking in just $12.1 million. The film, backed by DreamWorks and Warner Bros., cost nearly $130 million to make.
Overall this year, DreamWorks is the 7th-ranked studio with a 5.5 percent market share, according to tracking firm Box Office Mojo. It has grossed about $275.5 million in box office receipts.
DreamWorks Animation, meanwhile, has had a rocky road as a public company. Recently, the company was forced to warn Wall Street that its quarterly earnings were worse than expected and disclose an SEC probe into the trading of company shares. The company, which is run by Katzenberg, was also forced to cancel a $500 million stock offering.
Last year, DreamWorks shed its music business, selling its record company to Universal for $100 million and its music publishing unit to New York-based venture capital firm Dimensional Associates for about $50 million.
NBC Universal is in discussions to acquire DreamWorks SKG, the private live-action film business left behind after the company took public its animation division last year, The Post has learned.
The deal, if completed, would be another sign that the ambitions of the powerful Hollywood trio that formed the company 11 years ago have never been fully reached.
While talks with Universal are ongoing, sources familiar with the matter said they are still at an early stage and that no deal is imminent.
The potential sale comes as the company's animation unit — which was spun off last year into a separate publicly traded company — faces a series of troubles, including a falling stock price and a Securities and Exchange Commission investigation.
While three sources familiar with the matter confirmed that DreamWorks has been shopping its live action unit, a spokesperson for the company denied it was for sale. A spokesperson for Universal declined to comment.
DreamWorks does not break out figures for its live action unit — which remains a private company — but public comments earlier this year by David Geffen, who has taken the reins of the unit, suggest that management believes it is worth about $1 billion.
Geffen, along with director Steven Spielberg and ex-Disney exec Jeffrey Katzenberg, founded DreamWorks in 1994.
In an interview earlier this year at the 92nd Street Y in Manhattan, Geffen appeared to downplay the importance of live action to DreamWorks' bottom line.
"The animation company has a market cap of over $4 billion, and the whole company has a market cap well over $5 billion," he said, according to a transcript published by BusinessWeek. "The animation business is infinitely more profitable."
A few months ago, DreamWorks began putting out feelers to other studios looking for potential buyers, sources said, but talks with Universal Studios have become the most advanced. DreamWorks and NBC Universal — Universal Studio's parent — already have an extensive television production partnership.
The studio, which has won Oscars in the past for movies including "Gladiator" and "American Beauty," has lately fared poorly at the box office. Most recently, its hoped-for summer blockbuster "The Island" flopped in its opening weekend, taking in just $12.1 million. The film, backed by DreamWorks and Warner Bros., cost nearly $130 million to make.
Overall this year, DreamWorks is the 7th-ranked studio with a 5.5 percent market share, according to tracking firm Box Office Mojo. It has grossed about $275.5 million in box office receipts.
DreamWorks Animation, meanwhile, has had a rocky road as a public company. Recently, the company was forced to warn Wall Street that its quarterly earnings were worse than expected and disclose an SEC probe into the trading of company shares. The company, which is run by Katzenberg, was also forced to cancel a $500 million stock offering.
Last year, DreamWorks shed its music business, selling its record company to Universal for $100 million and its music publishing unit to New York-based venture capital firm Dimensional Associates for about $50 million.