Viacom to Sell DreamWorks Library

Mar 17, 2006  •  Post A Comment

Sumner Redstone’s Viacom said Friday it has reached an agreement to sell the 59-title DreamWorks film library for $900 million to an investment group led by billionaire George Soros.

The sale of the library, which includes films such as “Saving Private Ryan” and “Gladiator,” makes good on a commitment Viacom made last year when it announced it was buying the DreamWorks studio for $775 million in cash and the assumption of $825 million in debt.

At that time Viacom said it would pursue a sale of the film library to help reduce to total acquisition cost of the DreamWorks deal and believed the library, which includes all film titles released before Sept. 15, 2006, could fetch between $850 million and $1 billion. Friday’s sale means Viacom’s net purchase price for DreamWorks was approximately $600 million.

As part of the deal, the buyers-Soros Strategic Partners and Dune Capital Management’s Dune Entertainment-will get the 59 live-action films and enter into an exclusive five-year agreement with Viacom’s Paramount Pictures to distribute the library. That distribution deal automatically renews if the Soros investment team still owns the library after the fifth year.

Viacom will retain ownership of the music publishing and other ancillary and derivative rights associated with the library, including sequel and merchandising rights. Viacom will also hold a minority interest in the entity holding the library assets. After the expiration of the five-year distribution term, Viacom has the right to reacquire the library.