DreamWorks Scores $1.5 Billion In Financing
...But the studio continues to insist that it has no plans to make a bid for Universal. Really. No plans at all...
DreamWorks SKG has secured an additional $1.5
billion (that's right, billion with a "B") in additional financing.
According to Reuters, the studio said it would use the money to open another CGI animation unit (!) and to produce more films. And (here's the biggie) it would allow the studio to pursue other entertainment assets expected to come on the market soon.
But David Geffen continues to express that the company has no plans to go after Universal Studios or any of its assets.
None whatsover. Really. No plans at all.
Gosh, I mean why would anyone think that Steven Spielberg, a man increasingly obsessed with his legacy as a filmmaker, would want to actually own the studio that holds the rights to his old films?
Thinks that make you go Umm?? Who knows what they will use the money for, but it does seems "odd" they are getting this amount of money for no set reason.
From Anonymous
Posted August 25, 2002 at 10:37 PM
Isn't a "Shrek" attraction coming to Universal Orlando next year? And the movie Shrek was made by DreamWorks. That would be great if the two companies came together! Imagine the possibilities...
Forget it people. Vivendi is not going to part with its studio assets for a paltry $1.5 billion. This is Spielberg's capital to build the Dreamworks Studio. Why would he want to buy an old studio with its entrenched staff and physical layout? I seriously doubt he has any interest in the theme park business. If he's following Lucas' example, he'll let somebody else do it at their own cost. I think Steve's getting tired of going to George's to play with his toys. He wants his own.
Listen to people named Kevin! Well at least part of it. I read somewhere that Universal Pictures' STARTING price would be $10 BILLION. Unless they have an extra $8.5 BILLION lying around, I don't see how they could buy even that portion of Universal. Who knows what the parks would sell for, but considering that IOA was built for more than a billion, I would have to guess that all the parks and CityWalks, including their portion of USJ, would bring about $5 billion, if not being sold at fire-sale prices. UMG might be the cheap one here. It is the one doing poorly and DreamWorks is trying to be a music company also. Why else is Mr Geffen there? Still, I think it would go for more than that. Houghton Mifflin, the publishing agency, is supposed to go for under $1.5B and it makes less than UMG. Maybe DreamWorks wants in the publishing business?
As for the rest of Kevin's comments... Spielberg is VERY interested in theme parks. He has consulted on MANY of Universal's attractions and many of his films (both as a producer and director) are represented by attractions there. I'm sure he likes having someone else's money building these mini-shrines to his work, but if it came down to someone ELSE owning the parks, he MIGHT feel the need to step in and control them himself.
From Anonymous
Posted August 26, 2002 at 11:41 AM
Since the studios aim to keep even the blockbusters under 100 Mil these days, we are talking about 15 pretty good movies. Theme parks cost from under a bil (AK) to over 3 bil (Disneysea Japan). Deals are "creatively financed" so 1.5 bil would be enough to purchase UO. But I think Variety just reported that Vivendi is going to separate the Universal properties into separately traded companies due to their less than successful effort at sales. That would make ownership of ALL Universal parks possible.
From Anonymous
Posted August 26, 2002 at 11:51 AM
Forgot to add to that last post: Nobody has considered what possibilities the studio space offers at Universal "Studios". They would of course need some upgrades.
This is an interesting situation. To often we think in terms of retail purchases. The big acquisitions are rarely done all with cash. Usually, there's a mixture a cash, stock exchange, and debt assumption, so Dreamworks doesn't need to bring all cash to the table if they wanted to buy the Universal portion of Vivendi.
We know that Vivendi needs cash, and they need to dump some debt. What we don't know is how much cash and how much debt they need to unload if they were to sell the Universal assets. Dreamworks may not know either, so this could be a fishing expedition to see what Vivendi's minimum requirements are. After all, the $1.5B could be just the tip of the iceberg. Dreamworks might be partnering with some deep pockets investors, and this is their portion of the down payment that will secure the investors' interest.
Realistically, I don't think anything will happen for a while. The serious money will wait for Vivendi to get really desperate and then step in an pick up the properties at a deep discount. Hey, if Bill Gtes can invest in Six Flags then there may be somebody else out there who sees an opportunity in Universal.
I'd like to throw out this scenario. In about two years, Universal will cease to exist. Vivendi will not just divest itself of its folly, it will obliterate it. I foresee that Vivendi will haphazardly sell Universal's assets to pay down its debt. For example, the film library and studio won't even be sold together. Hell, they might be crazy enough to sell the theme park intellectual assets without the parks!!! I think this is what Spielberg may be waiting for. There might be more money in licensing the product without the heavy investment in fixed assets and underlying debt. Could you live in a world where IOA is owned by an land investment company (REIT), managed by a hospitality manager (Marriott) with properties licensed by Dreamworks?
From Anonymous
Posted August 27, 2002 at 5:24 AM
Gee Kevin... Sounds like you just described Disney Resorts in Japan
That's what I had in mind. I think this is the future of theme parks, whether we like it or not. Because of the high operating costs, I believe that US media companies will get in the business of licensing rather than operating theme parks. They'll make money by taking a cut of everything in fat years. In lean years, it will be the park operators that end up holding the bag. This will clean up their balance sheets (i.e. less hard assets, but also less debt). Now remember I said media companies, not Cedar Fair, Six Flags or Dollywood. So don't get bent out of shape. Do get bent out of shape when the other parks get even more corporate. If you think lawyers at Disneyland are nuts, wait til you see the new paradigm adopted everywhere else. Sooner or later companies like Universal are going to learn the equation Universal = big pockets.
The problem with that scenario is that the most likely plan of action for Vivendi right now is to spin Universal off into its own US company, with Vivendi holding a big stake in the new company. There was a story in the Sentinel yesterday that added even more fuel to this option's fire. It claims that many on Vivendi's board may be afraid of most things Hollywood but they sure aren't afraid of Hollywood's money. In fact, it seems that Barry Diller is putting together his own plan proving how beneficial this would be to Vivendi's bottom line. I don't see Vivendi having a fire sale of all these assets when they are making gobs of money. I still say the only way Universal breaks up is if they don't get their debt down far enough after selling off the money-losing Vivendi portions.
Also, I considered the various plans in which someone could buy Universal, but apart from a cash buyout none of them will reduce Vivendi's debtload. Vivendi has repeated a zillion times that reducing that debt is their only priority right now. I suppose someone could take over some of their debt instead of paying it, but that company would have to take on a WHOLE LOTTA debt if they wanted ALL of Universal.
From Anonymous
Posted August 20, 2003 at 6:25 PM
Why doesn't Dreamworks simply buy out Disney?
Think about it. It would be perfect. Jeffrey Katzenberg always wanted to run Disney, and Steven Spielberg wants to get involved in theme parks big time. It would be the perfect fit, and would be a much needed shot in the arm for the House of Mouse. Best of all, Michael Eisner would be run out of town! A win-win situation for all involved.
I know, I know. Fat chance in hell, right?!
Question what does the SKG is Dreamworks mean? Dreamworks doesn't really have a very good library. Sure, Shrek was a hit but I hated it, not because Im a Disney fan, but for me Dreamworks haven't had a hit since Saving Private Ryan. So it would seem feasible to buy the Universal Park and the Studios because they have a good library? And this would only furthur intense the rivavrly between Katzenburg and Eisner.
SKG stands for Spielberg, Katzenburg, and Geffen, the founders of Dreamworks. Not a good library???
Glaidator, American Beauty, Road to Perdition, Minority Report, What Lies Beneath, Deep Impact, etc...
Are you crazy. Dreamworks isn't even 10 years old and already has 3 best picture Oscars and many other oscar winning/nominated movies. Dreamworks has no reason to merge with any other company. They are doing just fine on their own.
Gawd, this one was dug up from the depths. Just to clear some things up, Spielberg is already heavily involved in the Universal parks, so why would he want to buy them? Hell, half of the attractions are from movies he directed or produced. At least that. And he gets paid nicely for such "consulting."
I don't remember the number, but DreamWorks' release schedule this year doesn't even get near the double digits. DreamWorks doesn't want to be a big studio, which is why Universal distributes all their movies for them. They simply want to be something between a too-busy Universal and a too-highbrow Miramax. And for the most part they are succeeding.
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