Comcast in talks to buy DreamWorks Animation

Apr 27, 2016, 1:41 PM EDT
(Source: Sanjeev Beekeeper/flickr)
(Source: Sanjeev Beekeeper/flickr)

Comcast is in talks to buy DreamWorks Animation, according to sources.

The Wall Street Journal reports:

Comcast Corp. is in talks to buy DreamWorks Animation SKG Inc. for more than $3 billion, according to people familiar with the matter, in a deal that could make the cable giant a rival to Walt Disney Co. in the lucrative family-entertainment business. Comcast’s Universal Pictures studio has enjoyed success in recent years with its animated “Despicable Me” and “Minions” movies but is still a relatively small player. Its parent company, though, has been moving aggressively to mimic Disney by using its animation properties to build out its consumer products and theme parks businesses, a strategy that could be accelerated by the addition of DreamWorks, which makes the “Shrek,” “Kung Fu Panda,” and “Madagascar” movies, among others. As with all such talks, a deal may not be reached. The tentative purchase price represents a healthy premium over DreamWorks’ current $2.3 billion market value.

The New York Times notes:

Christopher Meledandri, the chief executive of Illumination, which has found success in low-cost smash hits like “Despicable Me,” would most likely run the operation. That would almost certainly mean the departure of Mr. Katzenberg and layoffs at DreamWorks Animation, which is based in Glendale, Calif. DreamWorks Animation, which was spun off from Steven Spielberg’s privately held DreamWorks Studios in 2004, probably drew Comcast’s interest as an owner of intellectual property.

Reuters writes:

DreamWorks, which is in the middle of a turnaround, has been reducing its dependence on the volatile feature films business to concentrate on increasing revenue from licensing its original content to media houses and video-streaming companies such as Netflix Inc and Verizon Communications Inc's Go90.