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| DreamWorks Animation Is Bought by Comcast in $3.8 Billion Deal | DreamWorks Animation Is Bought by Comcast in $3.8 Billion Deal |
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| LOS ANGELES — Hollywood’s smallest publicly traded entertainment company, DreamWorks Animation, threw in the towel on Thursday after a turbulent 12 years, agreeing to sell itself to Comcast’s sprawling NBCUniversal in a deal valued at a hefty $3.8 billion. | LOS ANGELES — Hollywood’s smallest publicly traded entertainment company, DreamWorks Animation, threw in the towel on Thursday after a turbulent 12 years, agreeing to sell itself to Comcast’s sprawling NBCUniversal in a deal valued at a hefty $3.8 billion. |
| The purchase means greater competition for the Walt Disney Company, the world’s largest entertainment company. NBCUniversal plans to use DreamWorks Animation properties, which include “Kung Fu Panda,” “How to Train Your Dragon” and “Shrek,” to bolster its fast-growing theme parks and move deeper into toys and children’s television. | The purchase means greater competition for the Walt Disney Company, the world’s largest entertainment company. NBCUniversal plans to use DreamWorks Animation properties, which include “Kung Fu Panda,” “How to Train Your Dragon” and “Shrek,” to bolster its fast-growing theme parks and move deeper into toys and children’s television. |
| The deal will pay DreamWorks Animation shareholders $41 a share in cash, more than 50 percent over its closing price on Tuesday, when news of a possible deal emerged. Jeffrey Katzenberg, the founding chief executive of the studio, who is expected to reap nearly $400 million from the deal, will become a consultant to NBCUniversal and serve as chairman of a new entity called DreamWorks New Media. | |
| Stephen B. Burke, NBCUniversal’s chief executive and senior vice president of Comcast, in a statement cited DreamWorks Animation’s “dynamic film brand and deep library of intellectual property” as reasons for the deal. “DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come.” | Stephen B. Burke, NBCUniversal’s chief executive and senior vice president of Comcast, in a statement cited DreamWorks Animation’s “dynamic film brand and deep library of intellectual property” as reasons for the deal. “DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come.” |
| Mr. Burke said Chris Meledandri, the chief executive of Illumination, Universal’s animation division, would oversee the DreamWorks Animation business. Mr. Katzenberg’s new entity will be made up of assets like AwesomenessTV, a digital network and studio aimed primarily at teenage girls. | |
| The end of the road for DreamWorks Animation as an independent company reflects an increasingly consolidated Hollywood. To survive, companies have come to rely on interconnected, franchise-oriented businesses – with television, consumer products and theme parks typically more lucrative than film. Mr. Katzenberg’s company, which has tried mightily to diversify away from movies, was ultimately unable to grow fast enough to survive alone. | The end of the road for DreamWorks Animation as an independent company reflects an increasingly consolidated Hollywood. To survive, companies have come to rely on interconnected, franchise-oriented businesses – with television, consumer products and theme parks typically more lucrative than film. Mr. Katzenberg’s company, which has tried mightily to diversify away from movies, was ultimately unable to grow fast enough to survive alone. |
| In recent years, Mr. Katzenberg has pursued sales and mergers with multiple studios, to no avail. A possible acquisition by SoftBank, the Japanese telecommunications giant, went nowhere in 2014. There was also a failed effort to tie up with Hasbro. | In recent years, Mr. Katzenberg has pursued sales and mergers with multiple studios, to no avail. A possible acquisition by SoftBank, the Japanese telecommunications giant, went nowhere in 2014. There was also a failed effort to tie up with Hasbro. |
| The price secured by Mr. Katzenberg was greater than many people in Hollywood thought DreamWorks Animation was worth. It puts the company in the league of Marvel Entertainment and Lucasfilm, both of which were acquired by Disney for about $4 billion each. | |
| For Comcast, the deal comes about a year after its $45.2 billion takeover of Time Warner Cable collapsed under regulatory pressure. The new deal, while significant, is relatively small for the cable and entertainment giant. It is about one-twelfth the size of Comcast’s failed bid for Time Warner Cable and about an eighth the size of its $30 billion acquisition of the entertainment group NBCUniversal, which was completed five years ago. | |
| Comcast executives described the acquisition as a “tuck-in” that provided a boost in creativity and intellectual property for NBCUniversal. | |
| Mr. Burke has focused on developing strong franchises at NBCUniversal over the last several years and the DreamWorks acquisition furthers that effort. In addition to “Shrek,” “Kung Fu Panda,” and “Madagascar,” DreamWorks Animation comes with the rights to a burgeoning TV production studio and a classic media library with the rights to more than 400 titles and characters, including ”Where’s Waldo,” “Casper,” “Lassie,” and “Rudolph the Red-Nosed Reindeer.” | |
| Marci Ryvicker, an analyst with Wells Fargo, said in a research note that the deal “makes a lot of sense and will spur growth in animated films, related consumer products and theme parks — or ‘the Disney way.’” | |
| The deal carries a number of potentials for conflict. DreamWorks Animation is a big supplier of television cartoons to rival Netflix, which provides a low-cost streaming alternative to the cable television service that Comcast sells. Also, AwesomenessTV is part owned by Verizon, which is a competitor to Comcast’s cable and internet business. | |
| Comcast said that the takeover was subject to an antitrust review by the Department of Justice or the Federal Trade Commission but that it does not require approval by the Federal Communications Commission. The company expects the transaction to close by the end of 2016. | |
| Gene Kimmelman, a former antitrust offical at the Justice Department who now is president of Public Knowledge, a nonprofit media advocacy group, said in an email that he did not see any direct competition problems related to the deal. (He vigorously opposed Comcast’s proposed Time Warner Cable acquisition). | |
| But, he added, it raises questions about whether the conditions placed on Comcast’s takeover of NBCUniversal are strong enough to keep Comcast from using its power over popular content from harming the nascent and fast-growing market for streaming video. | |
| Mr. Kimmelman said that he planned to ask regulators to review the conditions related to the NBCUniversal deal in light of the new transaction. |