Comcast Buys DreamWorks in $3.8 Billion Deal
Comcast Buys DreamWorks in $3.8 Billion Deal

The world’s largest media company, Comcast, just acquired DreamWorks, the second best animated film studio in the world behind Pixar. 

Comcast’s NBCUniversal paid $3.8 billion for DreamWorks, the studio known for franchises “Shrek,” “Kung Fu Panda,” and “How to Train Your Dragon,” and winning 3 Academy Awards and 11 nominations.

“DreamWorks Animation is a great addition to NBCUniversal,” said NBCUniversal CEO Steve Burke. “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 CEO Jeffrey Katzenberg is being moved out of the company’s main business, which may suggest a directional change for DreamWorks. Katzenberg has been a prominent figure in movie production since the late 1970s.

“DreamWorks Animation CEO and co-founder Jeffrey Katzenberg will become chairman of DreamWorks New Media, which will be comprised of the company’s ownership interests in Awesomeness TV and NOVA,” reads the Comcast press release. “Katzenberg will also serve as a consultant to NBCUniversal.”

NOVA is a technology company set up recently by DreamWorks and Awesomeness TV is a youth entertainment company (DreamWorks has a majority stake) with main share of business coming from its massive network of YouTube channels, mostly affiliates. That would mean Katzenberg will no longer be responsible for animated feature production.

Katzenberg said he was excited. “As for my role, I am incredibly excited to continue exploring the potential of AwesomenessTV, NOVA, and other new media opportunities, and can’t wait to get started.”

In this Thursday, July 19, 2012, file photo, DreamWorks Animation CEO Jeffrey Katzenberg, center, plays with Madagascar characters, Alex the lion, right, and Kowalski the penguin, left, during a groundbreaking opening of DreamWorks studios in Redwood City, Calif. (AP Photo/Paul Sakuma)
DreamWorks Animation CEO Jeffrey Katzenberg plays with Madagascar characters, Alex the lion and Kowalski the penguin during a groundbreaking opening of DreamWorks studios in Redwood City, Calif., July 19, 2012. (AP Photo/Paul Sakuma)

Burke talked about Illumination founder Chris Meledandri as a presumptive lead DreamWorks film production team.

“We have enjoyed extraordinary success over the last six years in animation with the emergence of Illumination Entertainment and its brilliant team at Illumination Mac Guff studio,” Burke continues. “The prospects for our future together are tremendous. We are fortunate to have Illumination founder Chris Meledandri to help guide the growth of the DreamWorks Animation business in the future.”

That would suggest Meledandri may lead DreamWorks film production in the future.

With the change in leadership, it is not clear whether NBCUniversal plans to steer DreamWorks more in the direction of Illumination.

Katzenberg can boast a thick stack of accomplishments. As part of Paramount Pictures, he played a major role in making the “Star Trek: The Motion Picture” in 1979—despite may production challenges.

He then joined The Walt Disney Pictures and led its motion picture and animated feature production. Under his leadership the studio produced many commercially successful and critically acclaimed movies, like the animated features “The Lion King,” “The Little Mermaid,” “Beauty and the Beast,” and “Who Framed Roger Rabbit.” He pulled the motion picture division out of the box office gutter and made it a commercial success with movies like “Good Morning, Vietnam” and “Three Men and a Baby.”

In 1994, he founded DreamWorks with Steven Spielberg and billionaire producer David Geffen. 

Meledandri is no lightweight either. During his time in Fox’s Blue Sky Studio, he started off blockbusting franchises like “Ice Age” and “Alvin and the Chipmunks.”

In 2007, he founded Illumination Entertainment with money from Comcast’s Universal Studios. His first released feature, “Despicable Me,” made over half a billion dollars worldwide.

Prodeucer Chris Meledandri attends the World Premiere of "Minions" at Odeon Leicester Square on June 11, 2015 in London, England. (Anthony Harvey/Getty Images)
Producer Chris Meledandri attends the World Premiere of “Minions” at Odeon Leicester Square on June 11, 2015 in London. (Anthony Harvey/Getty Images)

So what may give Meledandri the upper hand? Money.

Meledandri has been consistently able make massive amounts of cash with half the budget of Katzenberg’s.

Katzenberg consistently budgets his movies at about $130 to $160 million. Meledandri usually keeps the budget between $60 to $80 million.

  • Last DreamWorks flick:
    “Kung Fu Panda 3”
    Budget: $145 million,
    Worldwide gross: $504 million
  • Last Illumination flick:
    “Minions”
    Budget: $74 million
    Worldwide gross: $1.159 billion

Critics may argue higher budget pays off in higher quality movies—pushing the boundaries of animation craft, instilling higher standards of artistry in the audience, attracting more talent to the industry.

After all, Pixar, the almost stereotypical Oscar winner of the Best Animated Feature, now budgets its movies at $175 million to $200 million.

It remains to be seen if Comcast plans to change DreamWorks or by how much. Both NBCUniversal and DreamWorks haven’t responded to requests for a comment.

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