Does DreamWorks Have Something to Talk About?

by Wayne Friedman, Jul 28, 2005, 12:30 PM

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While a number of reports sprung up today about how NBC Universal is rumored to be in negotiations to buy DreamsWorks SKG, the live action film entertainment company, DreamWorks executives aren't talking.

At least, not today. Two days ago it was a different story. Apparently one DreamWorks spokesperson did talk to the New York Post and said the company wasn't for sale. Then yesterday, a DreamWorks statement said that person wasn't authorized to talk.

So forget the whole thing - if you will. Which we at TV Watch did for a while, until The New York Times, The Wall Street Journal, and other publications wrote stories today that said DreamWorks was indeed up for sale. In a statement yesterday, DreamWorks says as a matter of policy it "does not comment on such matters."

Of course a deal may not happen. NBC Universal may be the only bidder for the live-action unit of DreamWorks, which could fetch upwards of $1 billion. A deal here makes sense since Steven Spielberg, one of the three founders of DreamWorks, has a long association with Universal Studios where he has made a number of his big movies.

DreamWorks SKG is a private, live action entertainment company founded by Spielberg, film executive Jeffrey Katzenberg, and music executive David Geffen. Some years ago the company sold off its music division. Last year it spun off DreamWorks Animation as a publicly traded company. But that unit has currently been plagued by softer than expected revenue in its DVD sales.

Though DreamWorks has a great film pedigree in Spielberg and Katzenberg, it's hard for an independent studio - with no TV distribution component - to compete in the modern media world.

Geffen knows the score: "Live-action film is not a great business. Especially if you don't have an HBO or TNT, it is hard to succeed," he told a New York audience in February, according to The Hollywood Reporter. "The bulk of growth will come in animation."

While it had some success in launching movies such as "Gladiator" and "American Beauty," that's not enough. In addition, DreamWorks hasn't been too successful launching network TV properties on the small screen. In the modern TV business world, networks typically have a financial stake - as well as strong creative input -- in virtually all their shows on air.

That has left DreamWorks struggling. And not just with TV. Geffen said before the public spin-off of its animation unit, the whole company was close to bankruptcy.

Now DreamWorks has a lot of authorized talking to do.

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