DreamWorks May Be Shopping Ani Unit

According to reports in The New York Post and Forbes.com, DreamWorks may move its animation unit out of house by spinning it off to another major studio. Under the speculated deal, DreamWorks would likely retain use of the unit while benefiting financially from the sale and the reduction in overhead costs.

DreamWorks declined to comment on the situation, leaving observers to wonder about the state of the animation industry as Disney and Pixar dissolve their long-standing and profitable relationship and feel out potential suitors.

DreamWorks scored big box office and home video numbers with The Prince of Egypt, Antz, Shrek and Chicken Run but took losses on other animated features including the recent Spirit: Stallion of the Cimarron and last summer’s big-budget flop Sinbad: Legend of the Seven Seas. But things may turn around with the highly anticipated May 21 release of Shrek 2 and the October debut of Shark Tale, followed by Madagascar in summer 2005. Several other big-screen toons are currently in various stages of pre-production.

The New York Post cited sources alleging that DreamWorks is also considering a possible initial public offering of the animation division. However, an outright sale is still a possibility given that DreamWorks recently sold its record business to Universal Music Group for an estimated $100 million.