It’s funny. I was having an impassioned conversation at Universal’s Frost/Nixon event, where Ron Meyer and Marc Shmuger lingered well into the very pleasant evening, with Sharon Waxman about what “breaking news” in this business is in the internet era and how very rare it is.
And then, this morning, an actual breaking news story landed.
The New York Times broke the news that DreamWorks is not landing at Universal, but at Disney as its new home for distribution. And soon thereafter, Nikki Finke, who is dancing like a mad krumper to claim it’s her breaking story, did her best service to us by giving us Ron Meyer’s angry, albeit one-sided, version of what happened.
Here is the short form…
There are only three cash-stable studios in town right now; Fox, Disney, and Sony.
GE, smartly, didn’t do the deal that Paramount was willing to do for DreamWorks back in 2005. Now, GE, putting even more pressure on the NBC/Universal division, was again unwilling to invest in DreamWorks.
The big difference this time was that DreamWorks didn’t think they needed to suck their new host dry of cash. The company is solvent. And they have a funder for half their billion dollar need for working capital. They figured they could find the rest. But then the banks started failing, money dried up (especially stupid money), and they actually needed some money from the place they would land.
So… once again, DreamWorks found a home with some cash available.
The reason that Disney investing in and Buena Vista being overall distributor for DreamWorks product makes sense is two-fold. As well as Dan Battsek has done with Miramax, the company that Harvey Weinstein built was good for Disney… but not the way Harvey was positioning it in his final years at Disney. They were happy to have a productive side business that they could invest $400 million a year or so in and reap ego benefits and some profit from, including strong library titles.
Now, Iger’s Disney, which has jettisoned all R-rated product from its profile, with the exception of Battsek’s Miramax, can invest in and get distribution revenue from DreamWorks, not blur the branding situation as launching a new division would, and will have a partner that is not, unlike Harvey, going to go wild on spending. Under Stacey Snider, DreamWorks is a stable, responsible production house. Plus, they will keep their Starz pay-TV pipeline wide open.
I don’t expect to see a Disney logo anywhere near the front of the DreamWorks titles… though the elephant in the room will soon be the future distribution plans for DreamWorks Animation, once their Paramount deal is over.
And as Jerry Bruckheimer has experienced, Disney’s willingness to let their stars do their work without much interference… real supportive thinking from Cook and Oren Aviv, not ego-free, but conscious that strong players need their room… will be a breath of fresh air for a DreamWorks who had a painful time interacting with the egos at Paramount.
Disney can afford this move. And for the same $400 million or so they offered The Weinsteins back when that deal went south, they have what will be an almost surely profitable relationship with a company that makes movies that feel like studio movies and not the duel “indies and awards films” that The Weinsteins did, making the studio crazy.
And the reality remains… GE is just not interested in investing to make a bigger NBC/Universal. And they are probably 100% correct, given their mindset.
The next event? I still like Sony to buy MGM and that library again before the end of the year… with a smarter, more committed deal this time.
And also by year end, I expect a reunion of Viacom or a sale of the Paramount side.
P.S. Expect DreamWorks to remain in The Adobe on the Universal lot, paying seven figures in annual rent. The same conservative thinking at GE that kept the deal from happening is the same thinking that will take the rent instead of the dramatic gesture of pushing spielberg off his beloved lot. Also... there really isn't anyplace on an already overcrowded Disney lot for DreamWorks. So if there was an Alamo-like event at The Adobe, DreamWorks would have to be off-Disney-campus, possibly in their now-animation-only Glendale space. But really... The Adobe abides.
Read the complete post at http://www.mcnblogs.com/thehotblog/archives/2009/02/disney_dreams_w.html