Thursday, May 05, 2016

No Warner Acquisitions

So there's plenty of media speculation, after Comcast gobbles up DreamWorks Animation, that more acquisitions and mergers are just over the horizon. But the Warner Bros. top-kick pours cold water on that idea.

Comcast’s $4.1 billion pact for DreamWorks Animation won’t pressure Time Warner or any other media conglomerate to go on a buying spree, Warner Bros. Entertainment CEO Kevin Tsujihara told analysts on Wednesday.

“I don’t think we’ll see more consolidation,” he said during a conference call to discuss Time Warner’s first quarter earnings. “I don’t think [the DreamWorks Animation deal] is going to be a precursor to a lot of transactions.”

There has been speculation that entertainment companies could begin to pool resource through mergers and acquisitions as they try to compete with Disney (the owner of LucasFilm, Pixar, and Marvel) and Comcast (the cable giant that also houses NBCUniversal). Viacom is currently selling a minority stake in Paramount and Lionsgate, the last pure play, publicly traded studio has been the subject of merger speculation.

But Tsujihara doesn’t see many things for sale that could add to Warner Bros.’ arsenal of superhero and animated tentpole films. ...

Part of the problem? There aren't a lot of tent poles ... or companies owning tent poles ... available to buy. Not long ago the smart money thought that Disney Chairman Robert Iger overpaid for Pixar, Marvel, and finally LucasFilm. But Diz Co. has made sizable profits from its purchases and the skeptics are re-thinking their earlier positions.

But Warner's decision of not going the Disney route is understandable. It's building a new feature animation division named WAG (Warner Animation Group) and has already had sterling results with The Lego Movie It already owns a plethora of DC super heroes, and how many caped wonders does one movie studio really need?

Still in all, corporate strategies change over time. In 2007 Comcast-Universal partnered with Chris Meledandri to create Illumination Entertainment from scratch. Eight years later, Comcast-Universal pulled a leaf from Robert Iger's playbook and paid $3.8 billion for DreamWorks Animation, its TV operation, and twenty years worth of DWA animated features.

The Mouse's business model is plainly enticing, and Comcast-Universal and Warners mean to replicate it, each in their own way.


Alex Dudley said...

The question is: What's really left to buy? Maybe they'll buy a video game company and make films off of them.

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