Dreamworks Animation: What Went Wrong?

[kowhite]

Judging by Penguins' reviews, their predicament doesn't look to be improving any time soon. They really don't have anything worth getting excited about for at least the next two years.

And there's something off about Dreaamworks brand. HTTYD2 was excellent, and a follow up to a fairly appreciated film...yet...it didn't do what I think we thought it would. I say...it's the brand man.

[AniNate]

Sometimes all you can do is chalk it up to fickle audiences. It wasn't the first great sequel to underwhelm at the box office.

[Sir Tiki]

Why Can’t Jeffrey Katzenberg Find a Buyer for DreamWorks Animation?

 

After courting and being snubbed by several deep-pocketed investors including a Japanese tech giant, Hollywood’s major studios and now Hasbro, Jeffrey Katzenberg may continue to struggle to find a buyer for his DreamWorks Animation Studios.

 

With each miss, the executive appears to look more desperate. Those who know him well say it will be tough for Katzenberg to restrain his controlling nature and secure the kind of pact that works for both buyer and seller.

 

Katzenberg’s desire to lock down an ultra-rich deal for the toon studio he built from the ground up and took public in 2004 is considered one obstacle. But so is his desire to take the top spot at the table of any company that buys his firm.

 

Analysts have begun voicing concern, saying that DWA’s attempts to sell itself for years with no success is starting to ding the company’s reputation. Not helping is the string of misfires at the box office, which caused DWA to take an $87 million loss on “Rise of the Guardians,” a $13.5 million hit on “Turbo” and $57 million writedown on “Mr. Peabody & Sherman.” “The Penguins of Madagascar” is the next release after “How to Train Your Dragon 2″ performed well this year.

 

Katzenberg, 63, however, sees a bright future for DWA.

 

Full article here:

 

http://variety.com/2014/film/news/why-cant-jeffrey-katzenberg-find-a-buyer-for-dreamworks-animation-1201356922/

 

[Sal]

Why Can’t Jeffrey Katzenberg Find a Buyer for DreamWorks Animation?

 

 

Full article here:

 

http://variety.com/2014/film/news/why-cant-jeffrey-katzenberg-find-a-buyer-for-dreamworks-animation-1201356922/

 

Katzenberg is delusion if he thinks he can have everything he wants without being willing to compromise.  He's not doing Dreamworks Animation any favours by refusing to deal.

 

I had no idea they'd been trying to sell it for so long.

[Sal]

And there's something off about Dreaamworks brand. HTTYD2 was excellent, and a follow up to a fairly appreciated film...yet...it didn't do what I think we thought it would. I say...it's the brand man.

 

Totally agreed on that.  The trouble is that Dreamworks' name is not necessarily invoking good reactions and a large part of that is their middling reputation with their films.  Sure they've produced good movies like HTTYD but that doesn't necessarily make up for the poor movies.  Even if their one great movie every year makes up for one or two mediocre ones money-wise, it doesn't when it comes to positive recognition.

 

If they regularly produce 3 movies a year and two are not good, then their percentage of successful films is only 33%  That's not a passable grade.  Not even close.  And it can affect both audiences and potential buyers.  If you know that it's likely you'll only enjoy one of their films a year then you won't go out of your way to see them all.  But if they were batting 3 out of 3 then you'd know "hey, their movies are always good... I'd better go see them."  

 

Pixar has this.  How often have people gone to see new Pixar movies just because they're Pixar?  They trust Pixar's name to be synonymous with quality entertainment.  Marvel is starting to be much the same.

 

The name is worth something... but Dreamworks' name is unfortunately not synonymous with 'high quality in everything'.  This is a damn shame because they are fully capable of doing good things and they're just... not.

 

And you can be sure that this - in addition to Katzenberg being a control freak who wants all the money but also wants to still be in charge (seriously, he's basically asking companies to buy Dreamworks Animation but demanding that he still be the one to run it... he's really just saying 'pay for me to do whatever the hell I want') - is a large part of the reason he's having trouble finding a buyer.

 

His poor decisions (as the leader, all final decisions are on his shoulders) have made it so he needs to sell Dreamworks to begin with.  Why would they want him to stay in charge?  He should consider himself lucky if they do want to keep him on, much less give him all that money up front.

 

It shows in the stocks.  After info about the talks came out, Hasbro's stock took a dip.  The investors don't consider Katzenberg a good gamble either.

 

 

Just look at the quotes:

 

“We don’t see a plausible argument for why [Hasbro] would pay 41% of its current market capitalization for a company which, according to its CEO, is facing serious challenges.”

 

and:

 

“Unfortunately for DWA, the company’s inconsistent creative output, and thus financial performance, makes it hard to understand why anyone would want to acquire the company at its current market valuation, let alone the $3 billion plus that management supposedly covets.”

He's asking too much and offering too little.  He needs to put the good of Dreamworks Animation as a whole above his own ego.  

 

And for f***s sake, all this talk of Dreamworks needing to resort to sending animation overseas frustrates the hell out of me because it's going to put a lot of good animators out of work.  It's hard enough to be an animator with the crummy (and illegal) wage agreement making it impossible to get better pay... now they're just going to outsource it so they don't have to pay them at all.  They keep threatening 'either we pay you less or we fire you and hire overseas' to keep the animators on board and that's a bullshit move.

Edited November 15, 2014 by Sal

[Sal]

....seriously though.  WTF Katzenberg.

 

 

 

Katzenberg is known as a micro-manager who is involved in every aspect of his business, and he wasn’t interested in taking a smaller role at a restructured DWA. In fact, some saw Katzenberg as wanting to run Hasbro outright, which likely didn’t mesh with the interests of Goldner, who saw his job in jeopardy.

 

Please tell me he doesn't seriously think he'll get a company to buy DWA and then he'll get to saunter right on up to the top of the management there too.

Edited November 15, 2014 by Sal

[Jonwo]

....seriously though. WTF Katzenberg.

Please tell me he doesn't seriously think he'll get a company to buy DWA and then he'll get to saunter right on up to the top of the management there too.

Whoever eventually buys DWA will and should make Katzenberg step down and give him a nice payoff. I'm not sure who could replace him but new leadership is what DWA needs.

[Sal]

Whoever eventually buys DWA will and should make Katzenberg step down and give him a nice payoff. I'm not sure who could replace him but new leadership is what DWA needs.

 

The Japanese company previously offering to buy DWA was offering $32 a share (more than they were trying to get Hasbro to pay) but that deal went south.  

 

 

 

“He could have had a really good deal, but he kept on pushing for more,” said one person familiar with the failed Softbank talks.

 

I'm not certain he would step down.  He is a very stubborn man and it is his company.  There's nothing that says he can't choose to stick with it, come what may.

 

I hope for DWA's sake that Penguins does well.

Edited November 15, 2014 by Sal

[Derpity]

Katzenberg is delusional.

 

The reason the Softbank deal went sour is because Katzenberg was trying to leverage the offer to other companies to get a better price ("Softbank is willing to pay me X, will you pay me X+1?").  Great way to negotiate.

 

And then Hasbro was basically screamed at by their shareholders not to buy Dreamworks.

 

Now Katzenberg is left with a crap company and no suitors.  Why would anyone want to buy Dreamworks?  Their IP is stale, and they've got virtually nothing promising in the pipeline  The time to sell was the height of the Shrek mania, knowing that you captured lightning in a bottle and were probably not going to get lucky like that again.

[BK007]

Dreamworks has suffered because of a poor choice in making movies. 

 

Pixar's former approach of making movies for everyone paid off and grew their reputation and name.

 

Dreamworks churn out fluff like Mr Peabody and Sherman, Megamind etc. which are all passable but immediately forgettable entertainment, they are cookie cutter, devoid of character movies. It's all flash and no depth, and even then you could argue on the flash part. 

 

It doesn't help Dreamworks that Disney is now resurgent, Illumination has forced its way into the market and you still have the likes of Blue Sky, Sony etc. all hanging around too. Not that they make super movies either, but they haven't spoiled the water for themselves.

 

There is a chance that many seeing the Dreamworks banner write off the movie and scoring movies like Captain Underpants and Boss Baby are not going to get anyone in. The concepts sound idiotic at best. Even BOO, if it's gone the direction of MVA/Megamind will be a plastic piece of crap, and though I found Home funny where everyone did not, it is also generic in design and style.

[BK007]

Having said that, I really liked Rise of the Guardians but it flopped so badly. 

 

Turbo had heart but, really, why greenlight a story that meshes together Cars and Ratatouille? It's stupid decisions like that that costs Dreamworks. 

[PatrickvD]

I don't understand why Paramount never bought them. They have Nickelodeon as a window for spin-offs. Dreamworks' library suits that company perfectly. Anyone know why that deal fell through a few years ago?

[Jonwo]

I don't understand why Paramount never bought them. They have Nickelodeon as a window for spin-offs. Dreamworks' library suits that company perfectly. Anyone know why that deal fell through a few years ago?

The best company to buy DWA would be either Paramount or Warner Bros. Paramount since they haven't established an animation studio yet plus it would fit well with Viacom's outlets like Nickelodeon and Warner Bros because they've have a strong animation history with the WB, Hanna Barbera and MGM libraries and they have Cartoon Network

[Chinoiserie]

....seriously though.  WTF Katzenberg.

 

 

 

 

Please tell me he doesn't seriously think he'll get a company to buy DWA and then he'll get to saunter right on up to the top of the management there too.

 

 

 

It makes it sound like he is jealous of Lassater who managed this. 

 

I wonder how many flops Dreamworks has to make before Katzenberg realizes it is in their best interest that the company is sold. He seem overly optimistic regarding Dreamworks future.

[Sir Tiki]

I don't understand why Paramount never bought them. They have Nickelodeon as a window for spin-offs. Dreamworks' library suits that company perfectly. Anyone know why that deal fell through a few years ago?

 

Probably the same thing that sunk the News Corp and Time Warner deals, Jeffery Katzenberg is just asking for way too much money because he thinks that DreamWorks is worth more than it really is.

 

At this point, I think if Katzenberg wants to have his cake and eat it too then the best thing he could do is sell the studio to another mini-major like Lionsgate. Heck, they may end up going that route if they get dropped by Fox after their contract runs out in 2017.

[TServo2049]

Lionsgate is not a bad idea. They haven't done anything in animation except for Battle for Terra (and Summit released Astro Boy when they were still independent).

If Fox decides they don't want to continue distributing DWA after 2017, Lionsgate is probably the only company left who would have interest in releasing their product.

The only other entity without in-house animation product is Weinstein, but Harvey is just as big of an egocentric control freak, so putting them in the same room would probably cause a chain reaction that could unravel the very fabric of the space-time continuum and destroy the entire universe. (Granted, that's a worst-case scenario. The destruction might in fact be very localized, limited to merely our own galaxy.) [i couldn't help it, I had to quote Doc Brown there.]

Edited November 15, 2014 by TServo2049

[Jonwo]

It makes it sound like he is jealous of Lassater who managed this.

I wonder how many flops Dreamworks has to make before Katzenberg realizes it is in their best interest that the company is sold. He seem overly optimistic regarding Dreamworks future.

Katzenberg also ruined Toy Story with his meddling and he also released Antz a month earlier than A Bug's Life as Disney/Pixar refused to move A Bug's Life since they wanted The Prince of Eygpt to have no competition.

Lionsgate wouldn't be a bad option but I imagine Katzenberg wants to sell DWA at a price that makes it unaffordable to anyone aside from the big companies

Edited November 15, 2014 by Jonwo

[Sir Tiki]

Please tell me he doesn't seriously think he'll get a company to buy DWA and then he'll get to saunter right on up to the top of the management there too.

 

I remember reading a couple of years ago that one of the stipulations for the News Corp acquisition (before it fell through of course) was that Katzenberg would become the head of a merged DreamWorks/Blue Sky studio, and that in turn would become an opportunity for him to become the president of 20th Century Fox if the opportunity arose a few years down the line. With Hasbro it looked like he was maybe trying to recreate that missed opportunity for himself.

[TServo2049]

Hubris is his middle name.

I guess Frank Wells was the only person who could keep Katzenberg's raging ego in check.

Edited November 15, 2014 by TServo2049

[Jonwo]

Hubris is his middle name.

I guess Frank Wells was the only person who could keep Katzenberg's raging ego in check.

I think all CEOS of companies like this has huge egos, it comes with the territory.

I do think DWA is unaffordable to buyers at the moment but once the stock price is lower enough and Katzenberg realises he needs to step aside it'll be swooped up pretty quickly.

IMO splitting DWA and Dreamworks SKG was a mistake on both companies part.