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NBC Universal Talks DreamWorks Purchase

NBC Universal is in talks to buy DreamWorks SKG, in what could be a deal worth $1 billion, according to the trades. Universal Studios already distributes DreamWorks' videos and DVDs via Universal Studios Home Video, and its films internationally through United Pictures International, the foreign distributor jointly owned by Universal and Paramount. Additionally, the two studios have co-financed films such as the 2000 Oscar-winner GLADIATOR and Steven Spielberg's upcoming MUNICH, which Universal will release in December. Spielberg began his directing and producing career 35 years ago at Universal.

Early rumors are that if the deal went through Universal would distribute DreamWorks produced films, making it similar to the deal Brian Grazer and Ron Howards Imagine Ent. has with the studio. It is also unknown what roles DreamWorks' three founders Spielberg, Jeffrey Katzenberg and David Geffen would continue to play after an acquisition.

Spielberg has always said he is not interested in a top post at a publicly traded company. Since Katzenberg has taken the mantle of ceo at DreamWorks Animation, he removed himself from the dealings of the live-action unit. DreamWorks Animation, as a publicly traded company of its own, is not part of the acquisition discussions. Geffen on the other hand is the truly unknown with some saying hed ask to be put on the NBC Universal board and others saying hed take a buyout deal.

Since its inception in 1994, the DreamWorks journey has been a rollercoaster. It won Oscars and financial success with films like AMERICAN BEAUTY, GLADIATOR and SHREK, however produced flops like SINBAD: LEGEND OF THE SEVEN SEAS and the most recent disappointment, THE ISLAND.

It has been rumored that the studio on two occasions has been close to bankruptcy.

NBC Universal is one of the world's leading media and entertainment companies in the development, production and marketing of entertainment, news and information to a global audience. Formed in May 2004 through the combining of NBC and Vivendi Universal Ent., NBC Universal owns and operates the No. 1 television network, the fastest-growing Spanish-language network, a valuable portfolio of news and entertainment networks, a premier motion picture company, significant television production operations, a leading television stations group and world-renowned theme parks. NBC Universal is 80%-owned by General Electric, with 20% controlled by Vivendi Universal.

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Rick DeMott
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