SoftBank Eyes a DreamWorks Buy – Report

Sarah Thomas
News Analysis
Sarah Thomas, Director, Women in Comms

Its dreams of acquiring T-Mobile dashed, SoftBank's latest acquisition target appears to be US-based movie studio DreamWorks.

According to reports in the Wall Street Journal and Hollywood Reporter, Sprint Corp. (NYSE: S) owner SoftBank Corp. is in talks to acquire DreamWorks Animation, makers of such fantastic animated flicks as Shrek and Madagascar.

The Hollywood Reporter suggests the purchase price being discussed is $3.4 billion, while the WSJ says an investment, rather than an outright acquisition, might result from the talks.

SoftBank gave up its pursuit of T-Mobile US Inc. over the summer, but remains cash-rich and acquisition-happy -- especially now that Hong Kong Ltd. , the Internet company it has a 32% stake in, recently made its IPO to the tune of billions of dollars. (See SoftBank Could Consider Euro Acquistions.)

For its part, DreamWorks, valued at around $2 billion, has been keen on expanding beyond feature films to TV, online video and consumer products, goals which SoftBank could help it achieve. The WSJ reports that it is also looking to expand into SoftBank's home continent of Asia. For SoftBank, this investment would be one of 1,300, but would help it achieve its goal of expanding into digital content.

Want to know more about operators' content strategies? Check out Light Reading's dedicated services/apps content channel.

Why this matters
For SoftBank-owned Sprint, acquiring DreamWorks is another, albeit less obvious, way to compete against the big two US carriers, AT&T Inc. (NYSE: T) and Verizon Wireless . T-Mobile would've given Sprint more spectrum and customers, but DreamWorks would give it exclusive content that the other operators can't touch. Given how difficult it has historically been for operators to work out deals with content providers, this would be an important leg up for Sprint. (See Sprint Drops Bid for T-Mobile – Reports .)

It also speaks to how important content in general, but specifically video, is becoming to all the major wireless operators. As their networks become increasingly on par, they are looking to differentiate with content and services. Verizon and AT&T are both planning LTE Multicast services, alongside uniquely mobile TV and video services. This could be a way for Sprint, which still has a long way to go on the network front, to start to differentiate on content as well. (See Sprint CEO: Price Cuts First, Best Network Next .)

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— Sarah Reedy, Senior Editor, Light Reading

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