Jeffrey Katzenberg Plots Next Act as Universal Faces DreamWorks Questions

jeffrey katzenberg -Getty - H 2016
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The CEO eyes a tech venture, but it's not clear if Universal can persuade mega-producer Chris Meledandri to take charge as the studio sets 'Shrek 5' and 'Shadows' as its first two movies after a $3.8 billion acquisition

NBCUniversal's $3.8 billion acquisition of DreamWorks Animation appears to be rolling along at a faster-than-expected clip and could close as early as late August, according to sources. Once that happens, CEO Jeffrey Katzenberg is expected to pursue a technology-centric venture at the intersection of Hollywood and Silicon Valley, with offices close to his Beverly Hills home. Still unclear: To what degree will Illumination chief Chris Meledandri choose to be involved in running DWA? Universal expects him to have "some type of role," says an insider, but he is said to be conflicted about what that might be.

DreamWorks animators are said to be somewhat anxious about the company's future though perhaps also soothed by word that Universal will greenlight two DWA films a year. For 2019, sources say those will be Shrek 5 and a creation from Edgar Wright and David Walliams titled Shadows.

When the DWA deal was announced in April, many assumed it was in effect a gift to reward Meledandri, 57, for his outsize success, underscored most recently by the gigantic $104.4 million domestic opening for The Secret Life of Pets. But NBCU signaled from the start the issue wasn't quite so simple. "I don't think Chris has even determined what he wants his involvement to be," Jeff Shell, chairman of Universal's film group, told THR at the time. That hasn't changed.

With Pets, some argue Meledandri has expanded beyond Despicable Me and Minions to  create a brand that can compete with Disney and Pixar, though he is "not trying to make Inside Out [but] more populist entertainment," says one associate. And since audiences love his films, it would be only be logical for Meledandri to be seen as the leader of DWA — except by those who know him. "He's not like most movie executives," says a studio insider. "He's always been conflicted."

An associate says the question Meledandri is pondering is: "Should he take time away from his own things or focus on what he's doing? He's certainly not going to let his own people be deprived of enough of his attention and suffer." In 2016, there already are more demands on him than usual because, for the first time, Illumination is releasing two movies in one year: Pets and Sing (Dec. 21), with voice talent including Scarlett Johansson and Matthew McConaughey.

Unlike John Lasseter, who now oversees both Pixar and Disney Animation, Meledandri doesn't have a management guru like Ed Catmull to run his company or a bench comparable with that of the Pixar brain trust, which includes Andrew Stanton (Finding Dory) and Brad Bird (The Incredibles). It's not so much in Meledandri's nature to delegate, say associates; rather, he remains immersed in details of whatever film is in production. He is so hands-on that he has an Avid editing setup in his office. (He keeps his budgets significantly lower than those of rivals by producing movies largely at a Paris-based facility that benefits from French subsidies.)

An associate says after one of Illumination's movies had a big opening, Meledandri spent the weekend phoning "50 people in the bowels of the Universal distribution organization to thank them. Who else would even know [those] 50 people?"

NBCU management hopes Meledandri is going through what they call his "process" and eventually will become a key player at DWA. For now, studio chief Donna Langley is said to be immersing herself in DreamWorks' business, recently lunching with Katzenberg at The Grill on the Alley and setting meetings with other players. (Katzenberg is still in charge until the deal is done and has been attending previews of upcoming films Trolls and Boss Baby.) Langley "will keep it moving forward until Chris decides what he wants to do," says a source familiar with the situation. "To the degree he wants to do more, he will. If it's less, she'll step in."

This story first appeared in the Aug. 5 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.