Paramount buys Dreamworks (1 Viewer)

[Adam Lenhardt]

This comes as a huge surprise to me, actually; since Dreamworks has been parked at Universals since its inception I thought Uni would be the natural one to pick it up if it ever decided to stop being independent.
It certainly bodes well for an "Indy 4", should the script ever materialize, however.

 

[Kevin M]

I had noticed that Dreamwork's has had a few flops recently...but $400 million isn't that much in todays film market, I guess they weren't doing that bad.

 

[Parker Clack]

I am really surprised by this too. I heard that NBC/Universal had bid on the company earlier and that never went over.

 

[Michael Reuben]

Today's NYTimes has a good article recounting the history of negotations. The thrust of the article is that GE/Universal took too long to make a deal and alienated the Dreamworks principals with too much dickering (notably, dropping the purchase price after disappointing box office for The Island and Almost Heaven).

http://www.nytimes.com/2005/12/12/bu...reamworks.html

M.

 

[Juan C]

Changes at the top in Paramount:

http://www.videobusiness.com/article/CA6304175.html


Why on earth would a studio buy another one only to sell off its library immediately?

 

[Chad R]

To make up some money back from the acquisition. They aren't selling the library to another studio, they're selling it to a financial consotrtium (old guys with money but no ties to studios) and then retaining the distribution rights. Basically, the consortium is making an investment and getting money back on the revenues generated by the library, and Paramount is keeping a distribution fee for putting the movies out on DVD, TV, etc.

After the distribution agreement is over, the consortium can sell the movies back to Paramount or find another studio to distribute them depending on the deal they sign now.

 

[Juan C]

I see. Thanks for the explanation, Chad.