DreamWorks Animation Toying With Hasbro And Hearst Pacts

Hasbro is discussing a deal to buy DreamWorks Animation that would create a company called DreamWorks-Hasbro, although presumably informed sources in several published reports offer the standard caution that it could all blow apart in true animated style, leaving eggs on a face or two.

DreamWorks is also in discussions with Hearst about turning its AwesomenessTV, a YouTube-based channel for teens, into a joint-venture arrangement. Deadline.com’s David Lieberman and Dominic Patten broke the story of both “potentially game-changing negotiations” yesterday evening.

“We’re told that a DWA and Hasbro deal is at least 60 days off, if it happens. But the two companies are said to have agreed that Jeffrey Katzenberg would chair the combined operation,” Lieberman and Patten write. “The Hasbro board visited the DWA campus recently, following a similar visit in late October by Hasbro CEO Brian Goldner and his management team to discuss potential film, TV, and consumer product synergies.” 



“Under the current terms of the proposed deal, Hasbro would pay a mix of cash and stock, though an exact price has not yet been determined,” a source tells the New York Times’ Andrew Ross Sorkin and Michael de la Merced. Katzenberg “is seeking more than $30 a share, a significant premium over his company’s current stock price,” they report.

The deal “would unite the Hollywood studio that produced the ‘Shrek’ and ‘Kung Fu Panda’ films with the toymaker behind Monopoly, Twister and My Little Pony,” writes Matthew Garrahan in Financial Times.

It’s a game that has been played before, of course, with varying degrees of success — critically and financially being somewhat disparate measures of achievement, as the Edmonton Sun's Liz Braun indicates.

“Hollywood studios have plundered toy brands for movie ideas in recent years: some, such as ‘Transformers,’ have become profitable franchises, generating billions of dollars, while others, like ‘Battleship,’ were box office flops,” Garrahan points out.

“DreamWorks Animation has expanded into consumer products in recent years but lags behind Walt Disney Co., and Hasbro had just changed tack on its entertainment business, selling off some of its stake in the Hub cable network with Discovery Communications,” Dana Cimilluca, Erich Schwartzel and Paul Ziobro report in the Wall Street Journal.

“Hasbro, which has been contemplating such a deal for years, has clout with big retailers that DreamWorks could benefit from, too, one person familiar with the talks said,” they add.

“The discussions — as well as other potential investments in DreamWorks from Japan’s SoftBank and China’s Alibaba — in recent months signal that … Katzenberg is clearly looking for a partner with whom he can restructure a company that has recently struggled at the box office with a string of misses with ‘Rise of the Guardians,’ ‘Turbo’ and ‘Mr. Peabody & Sherman,’” observesVariety’s Marc Graser. “How to Train Your Dragon 2″ is one of its few hits of late. DWA’s next film is “The Penguins of Madagascar.”

Hasbro, which has been known more for its testosterone-fueled toys such as Transformers, grabbed the Disney “Princesses” business from Mattel in September. Katzenberg, once upon a time, was chairman of Disney’s film division. He left in an “epic” rift with Disney chairman and CEO Michael Eisner in 1994, then formed DreamWorks Studios with David Geffen and Steven Spielberg. DreamWorks Animation (DWA) was spun off as a separate company headed by Katzenberg to produce animated feature films and television programs in 2004.

DreamWorks Animation purchased AwesomenessTV from CEO Brian Robbins and his investors in May 2013 for $33 million in cash and “incentives that could push the payout to $117 million by 2015,” All Things D’s Peter Kafka reported at the time.

Hearst’s Seventeen Channel launched with nine original shows on AwesomenessTV in January, according to a release, with all of the original content produced at the DreamWorks Animation wholly owned subsidiary’s West Los Angeles studio.

The reports of both negotiations “come about six weeks after the Wall Street Journalreported that Japanese conglomerate SoftBank was in talks to acquire DreamWorks, though the Journallater reported that these talks cooled for reasons that weren't known,” Myles Udland reminds us in Business Insider. 

Time — and no doubt a rewrite here and a plot twist there — will tell if these current storylines get out of development.

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