March 18, 2006 Viacom to Sell DreamWorks Film Library By THE ASSOCIATED PRESS
http://www.nytimes.com/2006/03/18/business/media/18film.html?_r=1&oref=slogin&pagewanted=print Viacom said yesterday that it agreed to sell the film library of the recently acquired DreamWorks studio to an investment group led by the billionaire financier George Soros in a deal that values the library at $900 million. The 59 films in the library include "Gladiator," "American Beauty" and "Saving Private Ryan." Viacom, which recently split off its broadcasting and publishing assets into the separately traded CBS Corporation, said the deal would complete the second stage of its acquisition of DreamWorks SKG, the studio founded by the producer and director Steven Spielberg, the music executive David Geffen and the animation executive Jeffrey Katzenberg. The buyers are Soros Strategic Partners and Dune Entertainment II. The Soros and Dune group will acquire all 59 DreamWorks live-action films released through Sept. 15 of last year, Viacom said, while Soros will distribute the library through an exclusive five-year agreement with Paramount. Viacom said it would retain ownership of music publishing and certain other rights related to the library, including sequel and merchandising rights. The company will also own a minority stake in the entity holding the library assets. Viacom will have the right to reacquire the library, and Soros and Dune will have the right to sell it to Viacom, beginning at the end of the fifth year after the deal. The parties also may acquire the other's interest under certain conditions. While full details of the deal were not disclosed, Harold Vogel, a media analyst and the author of the book "Entertainment Industry Economics," said it was likely that Soros and Dune will look to get a return on their investment through licensing the film library's content on DVD's, cable and worldwide television broadcasts. "They'll project how much each film can generate," Mr. Vogel said. "The difficulty is, probably only the top 10 films generate 80 percent of the income." In December, Viacom's Paramount Pictures unit agreed to buy DreamWorks SKG for $775 million in cash, plus $825 million in debt and other obligations. At that time, the studio said it would finance the deal by immediately selling the DreamWorks film library, which Paramount valued at $850 million to $1 billion. Viacom said yesterday that it expected the net purchase price for DreamWorks to be about $600 million after converting certain commercial agreements from debt to advances. The sale is expected to close in April, pending closing conditions, the company said. Analysts said the sale would make the price Paramount paid for DreamWorks much more attractive and give the company a steady stream of income from the distribution fees it will collect. The deal may also help Paramount quell arguments that it overpaid for DreamWorks. The distribution agreement with Paramount will automatically renew if Soros still owns the library after the fifth year, Viacom said. Dune Entertainment is an affiliate of Dune Capital Management L.P. Viacom shares rose 69 cents, to close at $39. ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu Reply with a "Thank you" if you liked this post. _____________________________ MEDIANEWS mailing list [email protected] To unsubscribe send an email to: [EMAIL PROTECTED]
