Comcast executives refused to comment Wednesday on reports of a potential DreamWorks Animation purchase.
Kicking off the company’s first-quarter 2016 conference call, Investor Relations SVP Jason Armstrong welcomed participants with this statement: “Because of the FCC’s anti-collusion rules to the Broadcast Incentive Auction, we can not discuss or answer any questions related to the auction or spectrum today. Nor will we be commenting about recent rumors or speculation about any M&A transaction.”
Really, it was the latter issue that people wanted to hear about this morning — one that Chairman and CEO Brian Roberts dodged masterfully during the media analyst question-and-answer period. He was coerced to talk about past M&A, like taking on NBCUniversal a half-decade ago.
“It’s been five years since we closed NBCUniversal and it’s been a wonderful experience in all regards,” Roberts said. “We feel we’re better together.”
Ninety minutes earlier, Comcast revealed strong first-quarter 2016 financials, beating Wall Street’s benchmarks on both earnings per share and revenue. Roughly 12 hours before that, reports surfaced that the company was interested in purchasing DreamWorks Animation for $3 billion.
Led by CEO Jeffrey Katzenberg, DreamWorks Animation is behind hit film franchises such as “Shrek,” “Kung Fu Panda” and “How to Train Your Dragon.” But the animation studio has struggled to find a path to stable growth with a limited release slate and mixed results at the box office.
Wall Street has continually punished DreamWorks Animation while Katzenberg has struggled to find the right partner to whom to sell his company.
Individuals close to the talks told the New York Times that Comcast would combine DreamWorks with Illumination Entertainment, its animation division led by Chris Meledandri, and almost certainly phase out Katzenberg.
DreamWorks Animation’s current market value is $2.3 billion, so a sale price of $3 billion would be a coup. The studio has struggled as a standalone entertainment business since it was spun off from DreamWorks SKG as a publicly traded company in 2004. The company was recently forced to cut back its annual number of releases and layoff nearly 20 percent of its staff.
Katzenberg has made a number of attempts in recent years to sell the company to one of the major Hollywood studios, and Hasbro also made a strong play for DWA in late 2014, though a deal ultimately failed to materialize. Katzenberg recently floated Viacom/Paramount as a potential buyer, as well, and he had previously held talks with Japan’s Softbank and several Chinese companies.