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Tickers in this Article: VIA, MVL, DWA, DIS, NWS, GE, GOOG
Bollywood giant Reliance ADA Group is offering $550 million to help acclaimed director Steven Spielberg and his DreamWorks SKG camp become independent of current parent company Viacom (NYSE:VIA). DreamWorks SKG falls under Viacom's Paramount Pictures umbrella.

Spielberg, who is credited for films including "Saving Private Ryan", "Raiders of the Lost Ark" and "Transformers", is in search of more independence and recognition for his film projects. A move by the DreamWorks camp could possibly leave Viacom without the drawing power of one of the world's most successful film makers.

Reliance is a massive Indian conglomerate involved in everything from energy, to telecommunications and finance. It also likes to dabble in movies and produces many of the popular Bollywood films. Spielberg's possible departure could affect investor's media holdings.

What Spielberg Means To Viacom
Paramount Pictures reported $2.8 billion in feature film revenue for the first half of the year on the strength of Marvel's (NYSE:MVL) "Iron Man" and "Indiana Jones and the Kingdom of the Crystal Skull" which was directed by Spielberg. The $2.8 billion contribution from Paramount represents roughly 40% of Viacom's revenue during the time period.

If DreamWorks and Spielberg have a couple more Indian Jones-caliber movies on the shelf, Viacom may want to hold onto its hit maker. The most recent installment in the Indian Jones series has racked up worldwide box office sales of $740 million. (For more on predicting future sales, read our related article Great Expectations: Forecasting Sales Growth.)

Animation Not Part of the Package
DreamWorks Animation SKG
(NYSE:DWA) is a separate entity from the DreamWorks SKG group that delivered Indiana Jones. The animation entity, which produced family friendly features including "Shrek", "Shark Tales" and the recent "Kung Fu Panda" is not part of the equity deal being offered by Reliance.

Tough Climate
Like other media companies including Disney (NYSE:DIS), News Corp. (NYSE:NWS) and GE Universal (NYSE:GE), Viacom has also felt the effects of the difficult economic climate. Viacom's advertising revenue has been down for the year as companies are looking for ways to trim expenses. Viacom has also began to lose popular support with internet users after initiating a lawsuit against Google (Nasdaq:GOOG), the parent company of YouTube, for unauthorized distribution of video content.

Final Thoughts
The fall of the credit markets has brought new players to the table with the means to finance movie ventures and lure away top tier talent. Judging by its financial statements, Viacom has been able to shoulder the downturn in the economy, but traders on the street have sent shares of Viacom into reverse. Apparently winning at the box office does not equate to winning positive sentiment from investors. If Spielberg ultimately decides to leave, Viacom will be hard pressed to replace him.

For related reading, check out Megatrends For Maximum Profits.

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