What Just Happened: Dreamworks Cheats on Universal with Disney

What happens when you catch your distribution partner in bed with another company? You make sure the divorce is finalized once and for all.
By  · Published on February 9th, 2009

Just in time for Valentine’s Day – the holiday famous for being exactly a month away from Steak and a Blowjob Day – we’re playing catch up on a situation that’s developed quickly, then slowly, then rapid-fire. Unfortunately, I just can’t think of an analogy for an action that ties into Valentine’s Day and has a similar rhythm.

We’ve been lazily following Dreamworks, and its hilarious in-progress divorce from Universal. At first the two companies were going to share some sweet distribution joint custody, but that looks like it’s out the window because, as usual, one of the two was playing the field.

According to the delightful and talented Nikki Finke, she’s had the skinny on talks between Dreamworks and well-known home-wrecker Disney for a few months, but there was little story to tell until she received word that an announcement was due soon. All of the sudden, bam, it’s news. So she calls Universal to get some statements, and gets a response of, “Dreamworks is doing what now?”

So in this issue of news, Dreamworks is playing the two-timing hussy, Universal is playing the jilted lover, and Nikki Finke is somehow playing the host from “Cheaters.”

It’s been out in the open how financial troubled Dreamworks has gotten, but with the current economic state, they are struggling to build the debt equity needed to shore up their deal with Indian corporate giant Reliance ADA. That money seems to be waiting in the wings, but isn’t hitting the stage soon enough, so Steven Spielberg and Dreamworks CEO Stacy Snider reached out to Disney when Universal laughed at a proposal to eke out another $250 million in their distribution deal that was, hilariously, already announced. It turns out that companies don’t like it when you propose major changes to a deal that’s already been agreed to.

When Universal found out about the meetings and how close to the end of the paperwork Disney had gotten with their distribution partner (third base), Universal attempted to salvage something but officially cut ties when the process broke down. From Universal:

Universal Pictures has ended discussions with DreamWorks for a distribution agreement. Over the past several weeks DreamWorks has demanded material changes to previously agreed upon terms. It is clear that DreamWorks’ needs and Universal’s business interests are no longer in alignment. We wish them luck in their pursuit of funding and distribution of their future endeavors.

There’s a lot more to the story, more that should emerge today or within the week most likely regarding an official announcement from Disney on the matter. For now, I’d highly, highly suggest checking out Nikki Finke’s article about it, especially if you love CEOs being likened to pigs and other post-relationship bad-mouthing.

Ultimately, this could be a very good thing for Dreamworks because partnering with Disney seems much more their speed. The companies share equivalent interest in family films, theme park tie-ins, and beard growth.

What do you think? Are Disney and Dreamworks a better match? Does Dreamworks just suck at getting along with other corporate entities? Man, did that extended metaphor pay dividends or what?

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