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What Regime Change at Universal Could Mean for Meyer, Snider and Spielberg (Analysis)

Stacey Snider Steven Spielberg Ron Meyer - H 2012
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As Comcast explores options for its film studio, several of these scenarios could play out.

It’s not exactly a sure thing that Comcast is ready for regime change at Universal Studios — company sources insist no action is imminent — but many in Hollywood expect that the cable giant must be moving, however glacially, toward reshuffling duties at a unit that has remained essentially untouched since the acquisition of NBC Universal closed in January 2011.

PHOTOS: Steven Spielberg on Set

As THR has reported, Comcast has been exploring what would be a complicated but not impossible move to bring in DreamWorks CEO Stacey Snider to run the studio, with partner Steven Spielberg accompanying her. At the same time, speculation has heated up that Comcast may be considering a change in the duties of long-serving Universal president and COO Ron Meyer, whose contract runs through 2015.

Meyer’s responsibilities in such a scenario would almost certainly become more advisory in nature. Currently he oversees Universal Pictures, studio operations and the theme parks. But since he re-upped in 2011, studio chief Adam Fogelson has been a direct report to NBCUni CEO Steve Burke, as well as to Meyer. And in any shake-up, longtime Uni observers believe that parks CEO Thomas Williams, who oversees a division that produced $835 million in operating cash flow in 2011 (up 41.2 percent from 2010), also would report directly to Burke. (The LA Times reports that Meyer has a clause in his employment contract providing that he will transition to a new role before his deal expires. Universal declined to comment.)

In that case, the theme parks would not be included in the portfolio of a new studio chief going forward. That could be seen as a possible sticking point if Comcast decides to pursue Snider since she already served as chairman of Universal’s film studio from 1999 through 2006 and might be expected to want expanded responsibilities. But the business has become much more challenging in recent years (operating cash flow from Universal's filmed entertainment unit was $10 million in 2011, down 95.8 percent from 2010) and Snider might not be especially concerned with empire-building. For one thing, Spielberg is known to favor a return to Universal — where he still maintains his offices — and his desires might come first. (Snider would have to give up any interest in DreamWorks if a deal were to be made.)

STORY: Comcast Explores Bringing DreamWorks' Snider and Spielberg to Universal

And despite recognition in this past year's best picture Oscar race with The Help and War Horse, DreamWorks has had a rough go of financing ever since the 2008 recession. Indian giant Reliance invested $325 million in DreamWorks in 2009--less than originally contemplated. After a number of disappointing films, including I Am Number Four and Cowboys and Aliens, Reliance agreed in April to renew financing for two to three years. Its alternative--to let DreamWorks flail--would not seem to have offered much hope for getting its money back. But the level of investment in the company was never disclosed. DreamWorks said that it would make three or four movies a year but layoffs followed.

So a deal with Comcast would relieve Snider of the pressure to seek money and leave Spielberg free to do what he always does (whatever he pleases).

If Comcast chooses to move forward, the company would have to free Snider and Spielberg from Reliance and Disney, which expects to share in the release of Spielberg’s Robopocalypse and other projects in the works. No doubt Disney will try to make a smart deal for itself, and Reliance will also want to capitalize if an opportunity presents itself. But the company might well decide that complicating a deal is not in its best interests. Owning a piece of DreamWorks that has some backing from Universal, in other words, might be Reliance's best shot at recouping at least some of its investment.

Paul Bond contributed to this report.

Email: Kim.Masters@thr.com

Twitter: @KimMasters