Craig Moffett, founder of MoffettNathanson, talks with Bobbi Rebell about Comcast's deal to buy Dreamworks Animation for $3.8 billion.
Here's a DreamWorks Animation soaring on news that the company behind Shrek and kind of the panda. Is being bought by Comcast for three point eight billion dollars here with his take on the deal. Is correct nothing he covers the company at his firm up at Nathanson thinking so much attorney and a severe. So you think the deal makes sense it's kind of Disney ASCII thing for at least aspiring to be. That's right there they're borrowing a page from the Disney strategy which is always been to take these animated characters from movies. Move them into the theme parks and use the theme parks and merchandising to keep the impression build them into. Trip perennial franchises and Comcast is looking to do the same thing. Whitney's DreamWorks Animation characters. Comcast has a habit of doing deals every to be five to seven years you point out. How successful are there pretty good at making me feel working and the culture emerging leadership it's that are. Well you know the first thing they do and give them some credit for it is they tend to buy counter cyclically and by that I mean. They buy when nobody else wants these assets they've bought. NBC it right at the bottom of the economic cycle it turned out to be very attractive deal. The they are now looking at DreamWorks after it's had a string of market disappointments over the last few years and so. The bloom has been off the rose a little bit but they're looking at this and saying. We can really re purpose these very valuable characters. And it's much more than just a film slate and they've got a pretty good history of successfully doing that with yes that's an NBC. Polygamy is interesting they can get a movie it was kind of mild. Okay hit in the box office and really leverage it and giving new life it out of properties like theme park. That's right think about Shrek for example it's been awhile since we've seen Shrek movie. But this track for an is still a very vibrant brand with lots of young consumers and so. Taking Shrek and weaving it into the theme parks using it to. Generate some consumer product sales doesn't just make some money off of it of a brand it also. We can reinvigorate the district Brandon makes it a better property for the next film. He talked about them slipping and getting good deals three point eight billion for a company that says. It's not a huge amount of my favorite artist but what do you think about the price is this a great deal financially for them. Well it's a high price and is certainly high prices relative to where DreamWorks was trading just just a week ago. But there are some assets there that it's already rumored that they might sell certain pieces of the acquisition like for example loss in his TV or some of the other. Smaller properties that they got as a way to reduce the price. And remember Comcast is a 75 billion dollar revenue company so. A three and a half billion dollar three point eight billion dollar acquisition is not trivial for anyone but it's not terribly large for a company like Comcast and your take on the stock. Well I I think Comcast is actually very attractive name right now and it's not. Because of this transaction this transaction is it is interesting but what really makes Comcast time. Is the other set of properties the cable business is doing very well they reported exceptionally strong earnings yesterday there actually growing video subscribers now. In the face of all of this news about cord cutting their broadband business is very strong. And so the distribution side of the business is doing very well and me and BC universal side of the business is also doing very well. I thank you so much my pleasure nice to be here. Our thanks to Craig Moffett of Moffett Nathanson and popular about this is Reuters.