Comcast buys DreamWorks Animation for $3.8 billion
Comcast has purchased movie studio DreamWorks Animation (DWA) for $3.8 billion.
The deal, announced on Thursday morning, will bring a sizable library of youth-oriented content under control of NBCUniversal, which is owned by Comcast.
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“DreamWorks Animation is a great addition to NBCUniversal,” said Steve Burke, CEO of NBCUniversal, in a press release. “Jeffrey Katzenberg and the DreamWorks organization have created a dynamic film brand and a deep library of intellectual property. DreamWorks will help us grow our film, television, theme parks and consumer products businesses for years to come."
DreamWorks Animation's catalogue includes Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon.
As part of the deal, DWA CEO and co-founder Jeffrey Katzenberg will become chairman of DreamWorks New Media. That area will include the company's digital media company Awesomeness TV and NOVA.
It is a diminished role for Katzenberg, who has led DWA ever since the company spun off from DreamWorks SKG in 2004. Viacom now owns DreamWorks, which produces live-action films.
Early reports about the acquisition reported that Katzenberg would exit entirely. For now, he is staying.
“Having spent the past two decades working together with our team to build DreamWorks Animation into one of the world’s most beloved brands, I am proud to say that NBCUniversal is the perfect home for our company; a home that will embrace the legacy of our storytelling and grow our businesses to their fullest potential,” Katzenberg said in a press release.
With DWA, Comcast adds another piece to what has become one of the biggest and broadest mosaics in modern media.
DWA is still a movie company at heart, but Katzenberg had been working to build out the company's business in digital. The company brought in $300 million from Netflix in 2015 and has seen growing income from AwesomenessTV.
If anything, DWA is now too attached to Netflix, according to analyst Jan Dawson.
"Though not subject to the vagaries of box office receipts, DWA’s Netflix relationship is arguably vulnerable to uncertainties of a different kind. Netflix’s business is inherently opaque from the outside, and management may conclude that DWA’s properties are not meeting its goals, and cut spending in future years," Dawson wrote in a recent piece for Variety.
With DWA, Comcast adds another piece to what has become one of the biggest and broadest mosaics in modern media. It remains the largest cable TV provider in the U.S. and also provides Internet access to most of those customers.
On top of its cable and Internet service business, Comcast has been building out a major content operation. Its first big move came back in 2009 with the purchase of majority ownership of NBCUniversal. NBCU includes NBC broadcasting, a variety of local affiliates, numerous cable news channels including CNBC, MSNBC, Bravo, E!, USA Network and Telemundo. On the Universal side of NBCU, there's Universal Studios and Universal Parks & Resorts, the latter of which could end up benefitting from adding characters like Shrek to their properties.
The deal predictably sent DWA shares soaring, as the deal paid a premium of more than 50% compared to its Tuesday share price. Investors were less enthused for Comcast, as its shares remained steady.
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Jason Abbruzzese is a Business Reporter at Mashable. He covers the media and telecom industries with a particular focus on how the Internet is changing these markets and impacting consumers. Prior to working at Mashable, Jason served as Markets Reporter and Web Producer at the Financial Times. Jason holds a B.S. in Journalism from Boston University and an M.A. in International Affairs from Australian National University.
