Reuters top ten news stories delivered to your inbox each day.
You are here:
Business & Finance
The Great Debate
Do More With Reuters
Make Reuters My Homepage
Support (Customer Zone)
About Thomson Reuters
Deal chatter heats up in Hollywood
Thu Jul 2, 2009 4:04pm EDT
Email | Print |
| Reprints | Single Page
By Anupreeta Das and Jui Chakravorty Das
NEW YORK (Reuters) - Dealmaking in Hollywood could get hot and heavy in coming months as movie studios explore ways to fight tumbling DVD sales and distribute entertainment in new formats.
Even as the recession squeezes financing from Wall Street banks and funds, the deal chatter has picked up because studios have already cut expenses and are looking for new growth opportunities for their movies, TV series and other content.
Viacom Inc's Paramount Studios is in early talks with several studios, including News Corp's Fox and Sony Corp's Sony Pictures, to cut costs by combining DVD manufacturing and distribution operations, a source familiar with the matter told Reuters on Tuesday.
Time Warner Inc, which owns the Warner Bros studio, is considering a bid for DreamWorks Animation SKG Inc, according to Variety columnist Peter Bart.
And Liberty Media Corp chief John Malone told shareholders last week that Sony Pictures and privately held Metro-Goldwyn-Mayer could be up for sale soon.
"What we're hearing is everybody's talking to each other on how to get joint ventures and structure costs," said veteran investor Mario Gabelli, whose Gamco Investors owns Viacom stock. "It's driven by how do you reduce costs, how do you raise financing, how do you distribute products globally."
With little hope of DVD sales picking up -- as online and mobile technologies change the way people view entertainment -- media bankers expect consolidation, but say more studios will prefer to combine units or strike partnerships and joint ventures rather than buy each other outright.
Traditional M&A may raise the hackles of antitrust regulators since there are only six major studios and a handful of smaller players, one banker said. "Studios will tend toward creating JVs to bring them together so that there is some pricing power over content," the banker added.
Acquisitions could also present integration challenges on the theatrical side of the business because of different movie production schedules, a second banker said.
"Everyone thinks studio consolidation makes a lot of sense," said a third banker. "There is tremendous overhead that can be reduced. But it's difficult given the egos and personalities involved."
Media moguls, from movie titans Harvey Weinstein and Jeffrey Katzenberg to overlords Sumner Redstone and Rupert Murdoch, have been invited to attend an annual retreat in Sun Valley, Idaho, next week, where they may well plot deals.
Bankers and analysts say cable companies like Comcast Corpcould make a play for the rich content libraries that studios own. Comcast, the No. 1 U.S. cable operator, already owns a stake in MGM, which also counts private equity firms Quadrangle and Providence Equity Partners among its owners.
A fourth media banker suggested that Lions Gate Entertainment Corp could be a good fit for Comcast because it could transform the independent studio's wealth of content into a cable network.
All four bankers requested anonymity because they do business with these studios or their parent companies. Continued...
View article on single page
UPDATE 1-Warren Buffett donates $1.5 bln Berkshire shares
Also On Reuters
Commentary: Miles O'Brien and why planes crash
Judge tentatively dismisses conviction in MySpace case
Blog: Citizen journalism, mainstream media and Iran
More Entertainment News
Jermaine Jackson: "I wish it was me" who died
Jay Leno wins cybersquatting case
Just A Minute With: Ray Romano on "Ice Age"
David Carradine died of asphyxiation: pathologist
Hipster factor poses challenges for movie marketers
More Entertainment News...
A selection of our best photos from the past 24 hours. Slideshow
Most Popular on Reuters
Air New Zealand staff bare all to get flyers' attention
UPDATE 1-Arianespace launches "largest commercial satellite"
Millionaires' springtime optimism wilts: survey
OAS chief to visit Honduras for talks on coup | Video
U.S. Marines launch key operation in south Afghanistan | Video
North Korea raises tension with missile launch
Pet python kills Florida toddler
Kevin Jonas, of Jonas Brothers, engaged
Iran hardliners want Mousavi prosecuted
NY City apartment sales down over 50 percent
Most Popular Articles RSS Feed
Testing the reset button
Michael Jackson will revealed
U.S. begins Taliban offensive
Honduras: Micheletti won't back down
Crash girl phones home
Deadline for Honduras looms
Afghanistan's war within
Private Fawcett funeral held
Franken wins Minnesota Senate seat
Most Popular Videos RSS Feed
Special Coverage: Michael Jackson
The King of Pop
Full coverage of Michael Jackson's sudden death, with the latest news, videos, facts and timeline. Full Coverage
We want to hear from you
Join the Reuters Consumer Insight Panel and help us get to know you better
Please take a moment to complete our survey
Help and Contact Us |
Advertise With Us |
Site Index |
Thomson Reuters Corporate:
Professional Products |
Professional Products Support |
About Thomson Reuters |
Latin America |
United Kingdom |
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.