Japan's SoftBank Eyes Stake in Legendary as DreamWorks Animation Talks Break Down (Exclusive)
CEO Masayoshi Son has been negotiating with Thomas Tull's studio on a track separate from DWA talks
Japanese giant SoftBank has backpedaled from active negotiations to acquire DreamWorks Animation, but it is not done shopping in Hollywood. Sources say the aggressive conglomerate is closing in on a deal to make a significant investment in Thomas Tull’s Legendary Pictures studio.
Talks with Legendary have been underway for several weeks, according to a knowledgeable source, and have been conducted on a track separate from the negotiations with DWA CEO Jeffrey Katzenberg. SoftBank's Legendary deal would not give it a majority stake, according to sources, but it could involve a significant investment.
A Legendary spokesperson did not respond to a request for comment.
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SoftBank, which owns Sprint and other mobile providers, is a deep-pocketed telecom and Internet giant that has circled content providers and studios looking for programming that it could own or distribute to boost its mobile-subscription offerings internationally. It is flush with cash from its 32 percent stake in Chinese e-commerce power Alibaba, which on Sept. 19 became the biggest IPO ever.
Sources say Softbank, led by ambitious CEO Masayoshi Son, has retained the investment bank Raine Group, which specializes in media and entertainment deals. Former Google executive Nikesh Arora also is heavily involved as the head of SoftBank's newly formed unit SoftBank Internet and Media Inc.
Forbes valued Legendary at $2.5 billion a year ago. A knowledgeable source estimates its value has increased to at least $3 billion since then. In 2013, the company announced a multiyear co-financing and distribution deal with Universal. It financed more than half of this summer’s hit Godzilla, released under its former distribution and co-financing deal with Warner Bros. Under the Warners deal, Legendary backed such hits as the Hangover franchise and Christopher Nolan's Dark Knight movies. It also has a stake in Nolan's November film Interstellar.
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Like DWA, Legendary has made moves in recent years to diversify beyond the film business. It launched a television division and hired veteran former Warner Bros. executive Bruce Rosenblum to run it. The company also is building up a digital business, having acquired the Nerdist and Geek & Sundry networks.
In August, the TV division set up its first pilot production commitments: for Carlton Cuse’s alien drama The Colony at USA and a medical drama, Austen’s Razor, at CBS. On Sept. 16, Legendary announced a deal for an original comedy on Netflix from Judd Apatow, Paul Rust and Lesley Arfin. Legendary also has cast Jesse Metcalfe and Virginia Madsen in Dead Rising, a project based on a zombie-apocalypse video game, for Sony's digital platform Crackle.
As THR first reported Saturday, SoftBank and DWA were negotiating the terms of a deal that would value the animation company at $3.4 billion. But due to factors that are not clear but could include a combination of price demands by Katzenberg and the leak to the media, those negotiations have been derailed.