With Viacom's last-minute $1.6 billion deal to acquire Dream­Works, the media giant is now focused on Steven Spielberg's filmmaking abilities, not on DreamWorks' scarce television assets.
But the deal, which could soon shrink to $600 million through the sale of the 59-title, live-action DreamWorks film library (with Viacom retaining distribution), has further fueled speculation that Viacom may be headed for the prime time TV business after its split with CBS.
Viacom Co-COO Tom Freston, the former MTV Networks leader, put together an executive team consisting of Paramount Pictures Chairman Brad Grey and President Gail Berman, both with strong TV credentials.
Another signal: Late last week, Viacom was reportedly wooing Lost and Alias creator JJ Abrams from Disney.
All that TV firepower points to Viacom's ramping up to sell to networks other than CBS and UPN.
For now, however, DreamWorks TV will continue to operate with a “first-look” pod (producer-for-hire) arrangement through mid 2007 at NBC Universal, even though NBC U saw its protracted negotiations for DreamWorks fail and Viacom move in to swipe it.
Spielberg and DreamWorks principal David Geffen have signed new three-year employment contracts with Viacom.
NBC U's deal
Under the pod deal, which isn't expected to be renewed, NBC U funds DreamWorks TV's overhead and production costs in exchange for ownership of DreamWorks projects. DreamWorks remains a profit participant.
NBC has ordered nine potential series scripts from DreamWorks but hasn't yet doled out orders for pilots.
The NBC pact is believed to exclude projects from Spielberg and series from DreamWorks Animation chief Jeffrey Katzenberg.
So nothing contractually would prevent Spielberg from creating a prime time series for Viacom, if he cared to.
The exemption also opened the way for Viacom to get an exclusive, seven-year, first-look programming agreement with DreamWorks Animation.
Under terms of the deal, through 2012, Viacom's Nickelodeon cable network can choose up to three series—one every two years—based on characters from Shrek, Madagascar, Shark Tale and future releases.
Katzenberg, who leads the remaining independent component of DreamWorks, was a big proponent of branded animated TV programming during his earlier tenure as president of Walt Disney Studios.
A kid-friendly combination
Freston cited “substantial growth opportunities” by leveraging the DreamWorks brand with Viacom's cable platform, predicting “the combination will create a leading kid/family-product offering.”
In terms of TV distribution, Viacom inherits Spin City from the DreamWorks library. But that off-network sitcom had basically been milked for every penny prior to the expiration of Paramount Domestic Television's syndication window in September.
Viacom also got DreamWorks' participation rights in NBC's Las Vegas, which the studio co-produces with NBC. It has been sold to cable.
For the time being, ABC and Turner Broadcasting have long-term rights to DreamWorks' live-action movie library.
The small DreamWorks sales force will be absorbed into Paramount Pictures, which is expected to take on all global sales of theatrical films to TV.
Those duties had been handled by Paramount's domestic and international TV divisions. Those units will remain with CBS.
Freston referred to the DreamWorks sales team as “a critical resource that we were going to have to hire from scratch following the split from CBS.”