Since General Electric (NYSE: GE) is reeling from the financial crisis that's currently gripping Wall Street, there's no doubt that a little Hollywood magic might be in order, something to take its corporate mind off reality for at least a little while.
Well, according to The Hollywood Reporter, that might happen. Steven Spielberg needs to move his DreamWorks company over to a new studio, and it looks like NBC Universal is at the front of the pack in the race to secure his business.
The pairing of Spielberg and Universal would be logically sound. He certainly had a better time over at that lot than he did at Viacom's (NYSE: VIA) Paramount. There is, however, one other studio that is in the running. The article seems to imply that Disney (NYSE: DIS) has a shot with Spielberg as well, although the way I read it, the Mouse is a distant second in the contest. Disney wouldn't be a good fit. As much as CEO Bob Iger would love to hold meetings with the most famous director in Hollywood (and the world, for that matter), a DreamWorks distribution deal just doesn't make sense since the company is really into getting a lot of bang for its capital buck.
The article states that with an 8% -10% distribution fee, any studio which gets Spielberg and DreamWorks would essentially be going for the allure of the director, and I would agree wholeheartedly with that assessment. In fact, if I were running the show, I'm not sure I'd be chasing Spielberg for that very reason. I'd rather have a bigger economic impact from a smaller player than a smaller one from a bigger gun (I should point out that many disagree with such sentiment). News Corp. (NYSE: NWS) also has a shot at DreamWorks, but I am dismissing that media conglomerate entirely.
You know what I find funniest about all this? Nowhere in this discussion does the topic of brand equity ever come into play. Whenever a Hollywood entity talks about moving to a studio, the decision process usually centers on who has the best deal, not who has the most powerful brand when it comes to distribution. If Spielberg were making the decision on that count, he'd probably have to hope Disney would take him. Kind of makes you wonder what effect "Fox" or "Warner Bros." has on moviegoers when they choose the films they want to see.
Disclosure: I own Disney and GE; positions can change at any time.