After buying Dreamworks LLC recently, Paramount Pictures didn't take long to make some moves. It sold the former film library of Dreamworks to a group headed by billionaire George Soros for $900 million.
Paramount parent company Viacom, announced the deal to sell the library to Soros Strategic Partners LP and Dune Entertainment II LLC.
This deal will involve 59 films that came with the transaction of buying Dreamworks.
The 59 films included in the deal with Soros and Dune will include all of Dreamworks live-actino films that have been released through September 15, 2005, and will include "Gladiator," "American Beauty," "War of the Worlds," and "Saving Private Ryan" among many others.
When specific commercial agreements are converted from debt to advances, Viacom will make approximately 600 million from the sale, which will probably be finalized in April, in the statement made.
Interestingly, the deal has some limits imposed upon it as Soros will have exclusive right for five years to distribute the library but Viacom will keep the ownership of music publishing, sequels and merchandising.
Viacom is also retaining a small minority interest in the legal entity that is holding the library.
Michael Dolan, chief financial officer of Viacom said "After a thorough process that resulted in great interest for the DreamWorks film library, we're pleased to have reached an agreement with Soros and Dune that has outstanding terms for all parties and is well within our expected sales price range."
"By significantly reducing our capital investment, this transaction materially increases our expected return on invested capital for the DreamWorks acquisition. Additionally, we retain all the strategic and operational benefits of the combination."
With the purchase of Dreamworks, Viacom is now making the core of the company's purpose the Hollywood film business and is part of a strategy that has spun off its CBS television unit. Although they have kept the two channels MTV and Comedy Central.
Dreamworks Animation, which is a separate, publicly traded firm, was not part of the deal, even though Viacom does have the distribution rights to the films including the tremendously popular "Shrek" series.
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