DreamWorks Animation CEO Jeffrey Katzenberg doesn’t appear to have a concrete plan to do something with Paramount, as its parent Viacom talks to entities eager to invest in the studio. But he told an investor gathering today that he can see a possibility for him under the right circumstances.
“I could imagine that with a good financial partner coming with us, putting together the assets of Paramount of DreamWorks could be extremely valuable,” he told attendees at the Morgan Stanley Technology, Media & Telecom Conference. “We could bring a lot to that business.”
He adds that he’s not “spending a lot of time tactically thinking about it. Is it something I fantasize about? Yeah. That could be very exciting.” But “I wouldn’t do it if I didn’t have a financial partner to come along and put a big piece of capital into that. I’d want to do it if it was right for the company and its shareholders not just because, wouldn’t it be a good thing to have. ”
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The comment capped his presentation that tried to persuade investors that the future looks bright for DWA following a string of movie losses that led to what he calls a “dramatic reset of the business” last year. He cut the number of annual movie releases to two from three, shook up management, and laid off about 20% of the workforce.
DWA is “probably about half way through achieving the goals we set out for ourselves,” he says. But “when you start in the toilet, there’s up.”
The next 12 to 18 months will be “choppy” he says, partly due to macro issues including weakening foreign currencies vs the strong dollar, and quirks in the timing of upcoming releases. “Our investors need to look at these things and factor them into how the company is doing….We are still in our rebuild mode.”
He adds, though, that “I don’t think there’s a better growth story in the media world….The best years for DreamWorks are in front of it” including investments in China and online video.
Katzenberg’s especially upbeat about television animation, which he says is now “our most profitable asset” with “a great deal of runway ahead.”
In addition to the revenues from license fees, the CEO is optimistic about opportunities TV offers to promote toys and other licensed merchandise. For example, Toys “R” Us was “caught off guard on how great the demand was” for toys related to Dinotrux.
He also has big plans for products and side projects related to the upcoming movie Trolls. It will be DWA’s largest ever consumer product campaign. “Trolls has an existing play pattern,” the CEO says. If successful, then, “there is a consumer products rocket ship ready.” In addition, director Guillermo del Toro is helping with a new series for Netflix, Trollhunters.
Katzenberg also talked up other movies including Boss Baby. “We feel like we’ve got good horses” in the upcoming release slate. “It is still a good business and for our company, where we started a year ago, we have growth opportunity from an investor standpoint.”
He acknowledged, though, that “it’s a far more competitive marketplace than it was” three or more years ago. “We have to get back to that consistency” and minimize risk.
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