11 ms·

Comcast's NBCUniversal buys DreamWorks Animation in $3.8B deal

120 points by smaili 11y ago

coroutines 11y ago
I kind of worry about service providers also being content producers while simultaneously coercing consumers into agreeing to contracts with binding arbitration. Judge, jury, and executioner?
voodootrucker 11y ago
Content creators merging with content distributors creates the kind of perverse incentive that the FCC/DoJ should cite to prevent these kinds of mergers.
superkamiguru 11y ago
Kinda makes sense. They already were using some of their licenses in the Universal theme parks
searine 11y ago
The writing on the wall is that DreamWorks is dead, which is not surprising considering the several high-profile flops of the last three years. This is basically a wholesale buyout of DreamWorks IP which will be given to Illumination to turn into more Minions movies.
- JTon 11y ago
  What flops are you referring to? I only know Dreamworks by their feature films, and why they all didn't review highly, they all made money [1] [1] https://en.wikipedia.org/wiki/DreamWorks_Animation#Feature_films https://en.wikipedia.org/wiki/DreamWorks_Animation#Feature_f...
  - josh_carterPDX 11y ago
    Agree. Comcast is gobbling up companies to be a major media company. They'll likely buy up something else, but I don't see Dreamworks being a studio that was making flops. They have a lot of solid movie brands that made a ton of money.
    - voltagex_ 11y ago
      Wonder if this is the end of Dreamworks Animation on Netflix.
    - deleted 11y ago
      [deleted]
  - searine 11y ago
    >They all made money This is hollywood. Take the budget, double it, and add 50 million dollars and then you have an accurate idea of the true budget. To be "profitable" the reported boxoffice needs to be at least 3X the budget. For example, Sherman and Mr.Peabody had a budget of "150 million", made 300 million, but dreamworks still lost 57 million making the movie. Known flops of the last two years are : Home, Penguins of Madagascar, Sherman and Mr. Peabody, Turbo, Rise of the Guardians. Only The Croods and HTTYD were profitable.
    - tzs 11y ago
      How about Kung Fu Panda 3? It did very well in China, and I believe I read that since it was a joint production of DreamWorks Animation and Oriental DreamWorks they ended up getting much more of the Chinese revenue than they would have had it been an all-American production.
    - JustSomeNobody 11y ago
      Of course if you're the star paid a percentage bonus on profit, then take the profit, halve it, subtract 50 million, wash, rinse, repeat until profit is actually in the negative.
    - rhino369 11y ago
      The issue isn't that the budget is wrong (though it doesn't typically include marketing), it's that box office revenue isn't 100% the distributors. Around 60% goes to the distributor for US box office and as low 25-40% for foreign receipts. So 3X is probably right for a heavily marketed movie, but 2X might cover a less heavily marketed movie. Plus DVD rights, streaming, and broadcast rights do bring in some extra money too.
    - rjett 11y ago
      See Hollywood Accounting: http://tvtropes.org/pmwiki/pmwiki.php/UsefulNotes/HollywoodAccounting http://tvtropes.org/pmwiki/pmwiki.php/UsefulNotes/HollywoodA...
      - superuser2 11y ago
  - neuromancer2701 11y ago
    Remember this is just the Animation studio. Spielberg still controls the DreamWorks Pictures which has been rolled into Amblin Partners.
- colinthompson 11y ago
  This. One of the things that saddens me most about this deal is that there are likely many talented artists and engineers down in Glendale who will be let go as a result of this consolidation. I would love to be proven wrong, but that is my hunch. In addition, I get the impression that Comcast is interested in owning already existing IP more than nurturing the Dreamworks Animation team to generate NEW stories and content. If that is the case, it seems short sighted.
  - cududa 11y ago
    That's pretty much been Jeffrey Katzenberg's MO since the 80's. First Paramount Pictures then Disney. He pushes his creative teams way too damn hard, burns them out, their new original content becomes crap, then they just creates a stream of derivative drivel.
  - jaryd 11y ago
    On the flip side, there will now be lots of talented and creative people available to potentially work on more interesting projects.
- tacos 11y ago
  Ah, HN. Where BuzzFeed is considered an innovative company due to loose ties to the MIT Media Lab, but a nearly four billion dollar purchase of a company that averaged $400+ million dollars per release -- while being consistently ranked the top company to work for in a legendarily cutthroat town and industry -- gets this as top comment. Sold at >50% premium to Tuesday's close of its publicly-traded stock price. This is not "wholesale." And the human assets remain very much a key part of the company's value and values.
  - carlivar 11y ago
    Are you saying DWA was innovative? I worked there 2 years, and they were the most resistant to change of any company I've worked for in my career.
  - searine 11y ago
    >Sold at >50% premium to Tuesday's close of its publicly-traded stock price. And for less than half of what disney paid for pixar, despite having made more movies. >And the human assets remain very much a key part of the company's value and values. Illumination, who is taking the reigns, is the costco of animation. In the entire United States Illumination has 35 employees. If you don't think there is a bloodbath coming, then I have a bridge to sell you.
    - tacos 11y ago
      Tech workers wish they had the union protections and job security of animators in Burbank/Glendale. Most of these people have already worked for Disney at one time or another. This isn't Yahoo. And talent remains in huge demand. You seem to think this is going to turn DreamWorks into Hanna-Barbera. That's not the revenue maximizing approach so I think you're being quite shortsighted.
      - searine 11y ago
        >Tech workers wish they had the union protections and job security of animators in Burbank/Glendale Are... Are you trolling me? Dreamworks has already undergone several rounds of layoffs recently. http://bit.ly/1uzveR9 http://bit.ly/1uzveR9 Animation/VFX is already heavily outsourced, and it's not getting better. Dreamworks has already said they are outsourcing future work to canada. http://bit.ly/1P8FKX8 http://bit.ly/1P8FKX8 Illumination already outsources all their work to other countries (France in particular). Government subsidies from non-US countries has already gutted US VFX/animation, and pretty much ensures nothing but executive level positions remain at big studios. There is zero US job security, and those going into the industry only have three guarantee's : long hours, low pay, and frequent moves to keep steady work.
bsimpson 11y ago
Does Jeffrey own so much DreamWorks that this doesn't need stockholder approval? What about the federal government? I'm not used to large acquisitions going from rumors to completed in 12 hours.
- maxerickson 11y ago
  It says in the article that it is pending a regulatory review.
  - bsimpson 11y ago
    Interesting. I didn't see that language this morning.
samfisher83 11y ago
We basically have two super huge media companies now: Comcast and Disney they just keep buying up properties.
- adventured 11y ago
  Viacom, Comcast, Disney, CBS, Netflix, Amazon, Apple, Twenty-First Century Fox, Google, Verizon, AT&T. Those are all massive media companies, we very clearly do not just have two. Apple is by far the world's largest media company. Amazon is a $300 billion, hyper aggressive corporation that is doing everything it can to become a big player in content. Amazon even has its own infrastructure play in AWS, which is responsible for delivering all of that content (ten years from now, will people be arguing AWS is a utility as it becomes as big as a major cable company?). Netflix is a fast growing $40 billion corporation. AT&T and Verizon are as much media companies these days as Comcast is. Verizon purchased AOL and would seemingly like to buy Yahoo. Both AT&T and Verizon are as big and powerful as Comcast is. Even Google continues to push further into that field. After all, how are they not partially a media / content company, given they control the world's most used app store (reaching a billion people), and have competing products in content delivery (video, music). Google even has a direct competitor to Comcast in Google Fiber.
  - skykooler 11y ago
    You could argue that, with Youtube, Google has more media content than the other ten combined.
  - santaclaus 11y ago
    Sony is a pretty massive media company as well.
  - eugenekolo2 11y ago
    > ten years from now, will people be arguing AWS is a utility as it becomes as big as a major cable company Interesting point.
maxerickson 11y ago
Comcast, Charter and the satellite companies are already getting in knife fights over content. I think I'm more and more in favor of some hostile rules like requiring major content distributors like the cable companies to offer $0 licensing of their owned content to their competitors. (such a rule would obviously need some mechanism to see through obfuscating ownership structures) The premise is that rather than building up content in order to benefit their customers, they are building up content because they can leverage it to extract rent.
- dimino 11y ago
  You would legally force a private company to share its property with others?
  - yarou 11y ago
    Comcast is publicly traded. And it behaves closer to a utility more than anything else.
    - dimino 11y ago
      In content production? No, it's not a utility. The ISP? Yeah, sure whatever. Not on the table right now, though. We're talking about NBCUniversal's content library. This is basically saying the US government should take over the movie making business. Why?
      - maxerickson 11y ago
        The point is to make it painful for the ISP (or meaningful parent) to own the content company, so it sure is on the table. Requiring divestiture is a frequent thing in mergers, it is not nationalization.
      - yarou 11y ago
        When you are talking about "Comcast" as a business entity, those are one and the same. Comcast has a natural monopoly because of its utility status, and a result of those network effects, can enjoy a free distribution network. You don't think that should be regulated? Edit: autocorrect fail
arca_vorago 11y ago
Where are all the anti-trust anti-monopoly laws at? Anyone can see simply that the .01% are using their wealth to merger and acquisition their way into permanent power bases, and it's a dangerous, free-market undermining activity. We are going to regret not pushing back on this and similar amalgamations.
- JustSomeNobody 11y ago
  Why is this getting so many down votes? At the very least, we need to break Comcast into content producer and content distributor (ISP).
  - nitrogen 11y ago
    Absolutely. Vertical integration can be a great way for businesses and consumers to save money on overhead, but it doesn't work like that for natural monopolies, and should not be tolerates for businesses that are gatekeepers to our intellectual interaction with the world (news, educational media, Internet)
    - mjevans 11y ago
      Gatekeepers to /common culture/.
  - rhino369 11y ago
    >At the very least, we need to break Comcast into content producer and content distributor (ISP). Sure, we should break up Apple into software and hardware, maybe even content too. And google into search and service. Vertical monopoly is just another world for efficient.
    - JustSomeNobody 11y ago
      Not sure why Apple would need to be broken into HW and SW. Not following that argument. As for Google, there are arguments to be made that, sure, they should be broken up so their search is separate. (Maybe Alphabet was a preemption?)
pg_is_a_butt 11y ago
#AOLTimeWarner

120 points by smaili 11y ago

I kind of worry about service providers also being content producers while simultaneously coercing consumers into agreeing to contracts with binding arbitration. Judge, jury, and executioner?

voodootrucker 11y ago

Content creators merging with content distributors creates the kind of perverse incentive that the FCC/DoJ should cite to prevent these kinds of mergers.

superkamiguru 11y ago

Kinda makes sense. They already were using some of their licenses in the Universal theme parks

searine 11y ago

The writing on the wall is that DreamWorks is dead, which is not surprising considering the several high-profile flops of the last three years. This is basically a wholesale buyout of DreamWorks IP which will be given to Illumination to turn into more Minions movies.

JTon 11y ago
What flops are you referring to? I only know Dreamworks by their feature films, and why they all didn't review highly, they all made money [1] [1] https://en.wikipedia.org/wiki/DreamWorks_Animation#Feature_films https://en.wikipedia.org/wiki/DreamWorks_Animation#Feature_f...
- josh_carterPDX 11y ago
  Agree. Comcast is gobbling up companies to be a major media company. They'll likely buy up something else, but I don't see Dreamworks being a studio that was making flops. They have a lot of solid movie brands that made a ton of money.
  - voltagex_ 11y ago
    Wonder if this is the end of Dreamworks Animation on Netflix.
  - deleted 11y ago
    [deleted]
- searine 11y ago
  >They all made money This is hollywood. Take the budget, double it, and add 50 million dollars and then you have an accurate idea of the true budget. To be "profitable" the reported boxoffice needs to be at least 3X the budget. For example, Sherman and Mr.Peabody had a budget of "150 million", made 300 million, but dreamworks still lost 57 million making the movie. Known flops of the last two years are : Home, Penguins of Madagascar, Sherman and Mr. Peabody, Turbo, Rise of the Guardians. Only The Croods and HTTYD were profitable.
  - tzs 11y ago
    How about Kung Fu Panda 3? It did very well in China, and I believe I read that since it was a joint production of DreamWorks Animation and Oriental DreamWorks they ended up getting much more of the Chinese revenue than they would have had it been an all-American production.
  - JustSomeNobody 11y ago
    Of course if you're the star paid a percentage bonus on profit, then take the profit, halve it, subtract 50 million, wash, rinse, repeat until profit is actually in the negative.
  - rhino369 11y ago
    The issue isn't that the budget is wrong (though it doesn't typically include marketing), it's that box office revenue isn't 100% the distributors. Around 60% goes to the distributor for US box office and as low 25-40% for foreign receipts. So 3X is probably right for a heavily marketed movie, but 2X might cover a less heavily marketed movie. Plus DVD rights, streaming, and broadcast rights do bring in some extra money too.
  - rjett 11y ago
    See Hollywood Accounting: http://tvtropes.org/pmwiki/pmwiki.php/UsefulNotes/HollywoodAccounting http://tvtropes.org/pmwiki/pmwiki.php/UsefulNotes/HollywoodA...
    - superuser2 11y ago
- neuromancer2701 11y ago
  Remember this is just the Animation studio. Spielberg still controls the DreamWorks Pictures which has been rolled into Amblin Partners.
colinthompson 11y ago
This. One of the things that saddens me most about this deal is that there are likely many talented artists and engineers down in Glendale who will be let go as a result of this consolidation. I would love to be proven wrong, but that is my hunch. In addition, I get the impression that Comcast is interested in owning already existing IP more than nurturing the Dreamworks Animation team to generate NEW stories and content. If that is the case, it seems short sighted.
- cududa 11y ago
  That's pretty much been Jeffrey Katzenberg's MO since the 80's. First Paramount Pictures then Disney. He pushes his creative teams way too damn hard, burns them out, their new original content becomes crap, then they just creates a stream of derivative drivel.
- jaryd 11y ago
  On the flip side, there will now be lots of talented and creative people available to potentially work on more interesting projects.
tacos 11y ago
Ah, HN. Where BuzzFeed is considered an innovative company due to loose ties to the MIT Media Lab, but a nearly four billion dollar purchase of a company that averaged $400+ million dollars per release -- while being consistently ranked the top company to work for in a legendarily cutthroat town and industry -- gets this as top comment. Sold at >50% premium to Tuesday's close of its publicly-traded stock price. This is not "wholesale." And the human assets remain very much a key part of the company's value and values.
- carlivar 11y ago
  Are you saying DWA was innovative? I worked there 2 years, and they were the most resistant to change of any company I've worked for in my career.
- searine 11y ago
  >Sold at >50% premium to Tuesday's close of its publicly-traded stock price. And for less than half of what disney paid for pixar, despite having made more movies. >And the human assets remain very much a key part of the company's value and values. Illumination, who is taking the reigns, is the costco of animation. In the entire United States Illumination has 35 employees. If you don't think there is a bloodbath coming, then I have a bridge to sell you.
  - tacos 11y ago
    Tech workers wish they had the union protections and job security of animators in Burbank/Glendale. Most of these people have already worked for Disney at one time or another. This isn't Yahoo. And talent remains in huge demand. You seem to think this is going to turn DreamWorks into Hanna-Barbera. That's not the revenue maximizing approach so I think you're being quite shortsighted.
    - searine 11y ago
      >Tech workers wish they had the union protections and job security of animators in Burbank/Glendale Are... Are you trolling me? Dreamworks has already undergone several rounds of layoffs recently. http://bit.ly/1uzveR9 http://bit.ly/1uzveR9 Animation/VFX is already heavily outsourced, and it's not getting better. Dreamworks has already said they are outsourcing future work to canada. http://bit.ly/1P8FKX8 http://bit.ly/1P8FKX8 Illumination already outsources all their work to other countries (France in particular). Government subsidies from non-US countries has already gutted US VFX/animation, and pretty much ensures nothing but executive level positions remain at big studios. There is zero US job security, and those going into the industry only have three guarantee's : long hours, low pay, and frequent moves to keep steady work.

bsimpson 11y ago

Does Jeffrey own so much DreamWorks that this doesn't need stockholder approval? What about the federal government? I'm not used to large acquisitions going from rumors to completed in 12 hours.

maxerickson 11y ago
It says in the article that it is pending a regulatory review.
- bsimpson 11y ago
  Interesting. I didn't see that language this morning.

samfisher83 11y ago

We basically have two super huge media companies now: Comcast and Disney they just keep buying up properties.

adventured 11y ago
Viacom, Comcast, Disney, CBS, Netflix, Amazon, Apple, Twenty-First Century Fox, Google, Verizon, AT&T. Those are all massive media companies, we very clearly do not just have two. Apple is by far the world's largest media company. Amazon is a $300 billion, hyper aggressive corporation that is doing everything it can to become a big player in content. Amazon even has its own infrastructure play in AWS, which is responsible for delivering all of that content (ten years from now, will people be arguing AWS is a utility as it becomes as big as a major cable company?). Netflix is a fast growing $40 billion corporation. AT&T and Verizon are as much media companies these days as Comcast is. Verizon purchased AOL and would seemingly like to buy Yahoo. Both AT&T and Verizon are as big and powerful as Comcast is. Even Google continues to push further into that field. After all, how are they not partially a media / content company, given they control the world's most used app store (reaching a billion people), and have competing products in content delivery (video, music). Google even has a direct competitor to Comcast in Google Fiber.
- skykooler 11y ago
  You could argue that, with Youtube, Google has more media content than the other ten combined.
- santaclaus 11y ago
  Sony is a pretty massive media company as well.
- eugenekolo2 11y ago
  > ten years from now, will people be arguing AWS is a utility as it becomes as big as a major cable company Interesting point.

maxerickson 11y ago

Comcast, Charter and the satellite companies are already getting in knife fights over content. I think I'm more and more in favor of some hostile rules like requiring major content distributors like the cable companies to offer $0 licensing of their owned content to their competitors. (such a rule would obviously need some mechanism to see through obfuscating ownership structures) The premise is that rather than building up content in order to benefit their customers, they are building up content because they can leverage it to extract rent.

dimino 11y ago
You would legally force a private company to share its property with others?
- yarou 11y ago
  Comcast is publicly traded. And it behaves closer to a utility more than anything else.
  - dimino 11y ago
    In content production? No, it's not a utility. The ISP? Yeah, sure whatever. Not on the table right now, though. We're talking about NBCUniversal's content library. This is basically saying the US government should take over the movie making business. Why?
    - maxerickson 11y ago
      The point is to make it painful for the ISP (or meaningful parent) to own the content company, so it sure is on the table. Requiring divestiture is a frequent thing in mergers, it is not nationalization.
    - yarou 11y ago
      When you are talking about "Comcast" as a business entity, those are one and the same. Comcast has a natural monopoly because of its utility status, and a result of those network effects, can enjoy a free distribution network. You don't think that should be regulated? Edit: autocorrect fail

arca_vorago 11y ago

Where are all the anti-trust anti-monopoly laws at? Anyone can see simply that the .01% are using their wealth to merger and acquisition their way into permanent power bases, and it's a dangerous, free-market undermining activity. We are going to regret not pushing back on this and similar amalgamations.

JustSomeNobody 11y ago
Why is this getting so many down votes? At the very least, we need to break Comcast into content producer and content distributor (ISP).
- nitrogen 11y ago
  Absolutely. Vertical integration can be a great way for businesses and consumers to save money on overhead, but it doesn't work like that for natural monopolies, and should not be tolerates for businesses that are gatekeepers to our intellectual interaction with the world (news, educational media, Internet)
  - mjevans 11y ago
    Gatekeepers to /common culture/.
- rhino369 11y ago
  >At the very least, we need to break Comcast into content producer and content distributor (ISP). Sure, we should break up Apple into software and hardware, maybe even content too. And google into search and service. Vertical monopoly is just another world for efficient.
  - JustSomeNobody 11y ago
    Not sure why Apple would need to be broken into HW and SW. Not following that argument. As for Google, there are arguments to be made that, sure, they should be broken up so their search is separate. (Maybe Alphabet was a preemption?)

pg_is_a_butt 11y ago

#AOLTimeWarner