Breaking: Comcast in Talks To Buy Dreamworks Animation

But if Comcast buys Dreamworks, it likely won’t be for its feature division, which has lost its luster in recent times and consistently underperformed at the box office, most recently with Kung Fu Panda 3, the lowest-grossing entry in the series. The on-going weakness of Dreamworks’ feature division led to the layoff of 500 employees last year, as well as the shuttering of its northern California animation outpost, PDI Dreamworks.

More attractive to the cable operator is Dreamworks’ TV animation division, which Katzenberg recently called “our most profitable asset,” as well as Dreamworks’ large catalog of vintage properties that it acquired from Classic Media. Those properties include Mr. Peabody and Sherman, which Dreamworks has turned into both a feature and Netflix series, and Voltron, which Dreamworks is currently turning into a Netflix series. This large volume of children’s content could be used throughout Comcast’s broadcast and online outlets.

Negotiations are nowhere near final yet, according to the WSJ, so it is too early to make guesses about how Dreamworks would be merged into Universal’s existing animation operations or whether Jeffrey Katzenberg would accompany the company to Comcast.

Last month, Katzenberg told investors that he “fantasized” about merging with another company: Viacom-owned Paramount Pictures. “I could imagine that with a good financial partner coming with us, putting the assets of Paramount and DreamWorks together could be extremely valuable and we could bring a lot to that business,” he said.

Speaking more broadly about the idea of merging with a bigger company, Katzenberg said, “I would want to do it in a way that was a good thing for the company and for shareholders, not just because it would be a good thing to have.”