Comcast Targets DreamWorks Animation for Acquisition in Multi-Billion Dollar Deal

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A new and unsettling movement is taking place in the content markets, and it's focused around one of America's most hated companies: Comcast. Comcast is targeting DreamWorks Animation for better than $3 billion, and it's a concept that will shake the market a lot farther than anyone might see coming.

If the deal went through, it would put DreamWorks Animation—maker of properties like How to Train Your Dragon, Shrek, and the Madagascar series—under Universal Pictures' umbrella. This is a move widely expected to augment Universal's animated project slate, which has been generally pretty light. Aside from the Minions-related material—including progenitor Despicable Me—there's not much else Universal has in the way of big-name animation, and that's leaving out a big stab at the kid market.

The good news here is that a deal valued at about $3.3 billion—the exact amount is unclear but minimums are talking in the $3 billion range—would represent a $1 billion premium over DreamWorks' current market value, measured at last report at $2.3 billion. There are also reports that say that, if DreamWorks Animation is picked up, it wouldn't be incorporated into Universal as hard as it could be, as Universal already has an animation studio in Illumination Entertainment. Illumination, as noted previously, is light on brands, with the Minions representing the biggest thing it's got. Reports suggest that DreamWorks Animation may have been looking for a buyer already, going back to 2014 and conversations with Japan's Softbank and toymaker Hasbro, which has itself been branching out into television and movies of late.

Comcast has been laying substantial investment into not only theme park operations, but also consumer products licensing, branching out from just cable and Internet service into the content therein. Comcast—and by extension Universal—would also net an augmented presence in the Chinese market, where DreamWorks Animation has itself poured a lot of effort.

One other point that isn't immediately mentioned is that Comcast acquiring DreamWorks Animation would likely be a powerful blow to Netflix, sometimes seen as one of Comcast's chief rivals. A lot of Netflix original programming is built in partnership with DreamWorks Animation, including things like How to Train Your Dragon expansion Dragons: Race to the Edge, as well as some properties like a remade Voltron and the series Trollhunters, produced with Guillermo del Toro. While the deal in question is a multi-year affair, it would likely not be renewed, leaving Netflix down in a big way and doing real damage one of the biggest rivals to Comcast's platform.

Comcast's aspirations of buying DreamWorks Animation represent a major disruption to the field of entertainment programming, and should be watched accordingly. If this goes through, Netflix will need to rush to find a replacement or risk Comcast pulling the rug out from under it.




Edited by Rory J. Thompson
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