WSJ : NBCUniversal Unveils New Leadership Structure at DreamWorks

NBCUniversal Unveils New Leadership Structure at DreamWorks
Illumination Entertainment and DreamWorks to remain separate animation studios

Comcast Corp.’s NBCUniversal announced a leadership structure at its newly acquired DreamWorks Animation SKG Inc. on Tuesday that keeps the “Shrek” studio separate from the other animation company under its roof, Illumination Entertainment.

When NBCUniversal’s acquisition of DreamWorks was reported earlier this year, an open question was if and how the company would integrate with Illumination, which has provided a steady stream of hits for Universal Pictures like “Minions” and “The Secret Life of Pets.”

NBCUniversal’s outline of the new leadership structure, announced a day after the $3.8 billion acquisition closed, didn’t include Illumination Chief Executive Chris Meledandri. But the studio left the door open for his involvement down the road.

“Now that the deal has closed, we will be working with Chris to determine the most effective path forward for Illumination and DreamWorks Animation,” a Universal spokesman said.

The studio has some time in figuring out a final arrangement: Universal Pictures won’t not begin distributing DreamWorks movies until 2018, when an existing agreement with Twentieth Century Fox expires. DreamWorks has three releases planned before then, and movies in development at the company for release after 2018 are being evaluated by Universal.


The heads of DreamWorks’ biggest divisions will stay in place.

Bonnie Arnold and Mireille Soria, two veteran producers elevated to co-presidents of feature animation in 2015, will continue running the feature animation group and report to Universal Pictures Chairman Donna Langley.

DreamWorks’ head of animated television, Margie Cohn, will lead an integrated DreamWorks and Universal television animation business and report to Universal Filmed Entertainment Group Chairman Jeff Shell. DreamWorks’ growing television business was among the top draws of the company to Universal.

DreamWorks’ games, digital and consumer-products divisions will be absorbed into similar departments at NBCUniversal. Marketing and distribution operations will also be combined.

As previously announced, DreamWorks Chief Executive Jeffrey Katzenberg will become chairman of DreamWorks New Media, which will oversee NBCUniversal stakes in online-video producer AwesomenessTV and the NOVA technology company. Ann Daly, a longtime deputy of Mr. Katzenburg’s who served as President at DreamWorks, will step down from the company.

NY Post : Universal swears off exclusive music-streaming deals

A resurgent music business on Tuesday saw its biggest label feeling strong enough to take a stand against the “exclusive” releases favored by Tidal, Apple Music and other streaming services.

Universal Music — the world’s largest music company, with a 33.5 percent market share — reached a “strategic commitment” to keep from offering exclusives to a single music streamer, one source said.

The decision came “after months of experimentation and dialogue,” the source said. Others labels are expected to follow Universal’s lead.


The label, headed by Lucian Grainge, believes the move is best for its artists and their fans over the long term, the source said.

“They no longer want their artists seduced by short-term money,” the source said.

Compensation for exclusives has been offered by Tidal owner Jay Z, whose service further benefits his wife, Beyoncé, Kanye West and others through ownership stakes.

Apple Music is also exclusive-driven, having paid Drake a hefty amount for a seven-day monopoly on his “Views” album and cutting deals with Pharrell Williams before its launch in June 2015.

The biggest criticism of exclusives-as-marketing-ploys is their alienating fans who don’t subscribe to the chosen platform.

This risk is greatest in Japan and Germany — two of music’s Top 5 markets — where streaming is not yet the dominant platform.

Only last year did digital consumption of music surpass physical to become the industry’s primary revenue stream. Global sales increased 3.2 percent, to $15 billion, marking the first significant growth since 1998.

Universal’s take on limiting an album to a single platform on its release left “too much money on the table,” the source said.

The ban on exclusives will affect most — but not all — Universal artists.

Some on joint-venture labels will be free to continue the practice, as will mega-stars with the clout and the inclination to cut deals with individual platforms.

>>> Asian Update

Asia Mid-Session Market Update: New Zealand terms of trade fall into deficit; Oil pares gains on API inventories build

***Economic Data***
- (NZ) NEW ZEALAND JULY TRADE BALANCE (NZ$): -433M (first deficit in 7 months) V -325ME
- (AU) AUSTRALIA Q2 CONSTRUCTION WORK DONE Q/Q: -3.7% V -2.0%E; 4th consecutive decline
- (AU) AUSTRALIA JULY SKILLED VACANCIES M/M: -0.6% V +0.1% PRIOR
- (US) NORTH AMERICA JULY SEMI BOOK/BILL RATIO: 1.05 V 1.00 prior

***Index Snapshot (as of 04:00 GMT)***
- Nikkei225 +0.7%, S&P/ASX +0.2%, Kospi -0.3%, Shanghai Composite flat, Hang Seng -0.7%, Sep S&P500 -0.1% at 2,184

***Commodities/Fixed Income***
- Dec gold -0.3% at $1,341/oz, Oct crude oil -1.1% at $47.56/brl, Sep copper +0.1% at $2.12/lb
- (US) Weekly API Oil Inventories: Crude: +4.5M v -1M prior; largest build since Apr
- USD/CNY: (CN) SWIFT: CNY use in international transactions: 1.90% of total in July v 1.72% prior
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.6420 V 6.6586 PRIOR; 2nd straight firmer Yuan setting
- (CN) PBOC to inject CNY90B in 7-day reverse repos and CNY50B in 14-day reverse repos
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, ¥200B in 10-25yr JGBs, and ¥120B in JGBs with maturity over 25-yr
- (AU) Australia MoF (AOFM) sells A$1B in 2.75% 2027 Bonds; avg yield: 1.9459%; bid-to-cover: 1.98x

***Market Focal Points/FX***
- Asian equity markets are mixed after modest gains on Wall St, with Nikkei225 outperforming amid weaker JPY and Hang Seng dragged down by financials and insurance names. Strong housing data and earnings from Toll Brothers bode well for the US property sector, which until recently appeared to be under strain. Focus remains on Fed Chair Yellen's Jackson Hole address as the key risk event for the week, though Fed funds futures saw a slight increase in probability of a rate hike before the end of 2016 as it broke above 50%. Fed's Kaplan (non-voter) also expressed support for a tightening if recovery in jobs can be sustained. Oil prices rose earlier in US hours after reports that Iran has informed OPEC it will attend the producers' meeting next month before giving up some of the gains after a large build in API inventories. In FX, most active dollar majors saw USD/JPY rise over 30pips from the lows as high as 100.50 and NZD/USD fall about 20pips to 0.7270 on soft New Zealand trade numbers.

- New Zealand July trade registered its first deficit in 7 months, and it was also wider than expected. Exports came in short of ests at 3.96B v 4.07Be, while imports were roughly in line at 4.40B v 4.45Be. Shipments to China fell 4.3% after last month's 17.9% rise, though export value to Australia rose 5.2% after last month's 8.5% drop. Otherwise light economic calendar also saw Australia's value of construction falling for the 4th straight quarter in Q2, with a 25% decline in Engineering segment overshadowing a 9.4% rise in Residential. Australia's earnings season also remained heavy. Qantas was the most notable gainer as company announced its first dividend in 7 years after growing sales by 2.5%, even as earnings narrowly missed expectations. Wesfarmers was down about 2% after net profit fell to A$407M v A$2.44B y/y.

***Equities***
US equities / ADRs:
- LCI: Reports Q4 $0.73 v $0.60e, R$168.9M v $162Me; +14.5% afterhours
- OSUR: Awarded up to $16.6M to advance rapid Zika tests; +11.1% afterhours
- DY: Reports Q4 $1.64 v $1.56e, R$789.2M v $773Me; -4.3% afterhours
- INTU: Reports Q4 +$0.08 v -$0.02e, R$754M v $724Me; raises dividend by 13% to $0.34 from $0.30 (indicated yield 1.19%); -4.6% afterhours
- LZB: Reports Q1 $0.28 v $0.29e, R$340.8M v $359Me; -15.6% afterhours

Notable movers by sector:
- Consumer discretionary: Ajisen China Holdings 538.HK +3.7% (H1 result); Car Inc 699.HK +3.2% (H1 result); China Foods 506.HK -0.3% (H1 result); Qantas Airways QAN.AU +2.4% (FY16 result); Slater & Gordon SGH.AU -11.0% (guidance); Bega Cheese BGA.AU +2.1% (FY16 result)
- Financials: WesFarmers WES.AU -2.3% (FY16 result); Steadfast Group SDF.AU -2.8% (FY16 result); Biostime International 1112.HK -4.4% (H1 result)
- Industrials: Boral BLD.AU -4.2% (FY16 result); Sinotrans 598.HK +8.1% (H1 result); Worley Parsons WOR.AU -3.2% (FY16 result); Ardent Leisure Group AAD.AU +13.2% (FY16 result)
- Materials: Jiangxi Copper Company 358.HK -1.7% (H1 result); Alumina AWC.AU +0.5% (H1 result)
- Energy: ENN Energy Holdings 2688.HK +2.6% (H1 result)
- Healthcare: Shanghai Fosun Pharmaceutical Group Co 2196.HK +6.0% (H1 result); China Traditional Chinese Medicine Co 570.HK +4.1% (H1 result);
- Telecom: China Telecom Corp.728.HK +1.2% (H1 result)
- Utilities: Tokyo Electric Power Co 9501.JP +2.2% (may pass safety checks by March)

FT : Italy rocked by 6.1 magnitude earthquake


Italy rocked by 6.1 magnitude earthquake
Reports of collapsed buildings and people trapped under rubble

A MINUTE AGO by: Associated Press and Jennifer Thompson
A magnitude 6.1 earthquake has struck Italy, with reports of damaged buildings, blackouts and people fleeing their homes.

The quake struck just after 3.30am local time and was felt across a broad section of central Italy, including the capital Rome where people in homes in the historic centre felt a long swaying followed by aftershocks.

First images of damage showed debris in the street and some collapsed buildings in towns and villages that dot much of the Umbrian countryside.


The European Mediterranean Seismological Centre put the magnitude at 6.1. The US Geological Survey put the magnitude at 6.2, with the epicentre at Norcia, about 170km north-west of Rome, and with a relatively shallow depth of 10km.

The mayor of the Umbrian town of Amatrice, which was hit hard by the quake, told state-run RAI radio and Sky TG24 that residents were buried under the debris of collapsed buildings, that the lights had gone out and that heavy equipment was needed to clear streets covered with debris.

“The town isn’t here any more,” he said

Asked if there were any dead he said: “There are houses that aren’t here any more. I hope we get some help.”

Images posted on Twitter show severe damage to buildings. The magnitude of the earthquake meant more than 266,000 people living within 100km could be affected, according to the Global Disaster Alert and Co-ordination system run by the EU and UN.

In 2009 a 6.3 magnitude earthquake struck in the same region and killed more than 300 people. The earlier earthquake struck L’Aquila in central Italy, about 90km south of the latest quake.

>>> After Hours Summary: LCI +15%, DL +13%, NMBL +7% following earn


After Hours Summary: LCI +15%, DL +13%, NMBL +7% following earnings/guidance, WNC +2.6% on S&P 600 addition news... LZB -15%, INTU -6%, DY -5% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: LCI +14.9%, DL +13%, LTRX +8%, NMBL +7.1%, EHIC +4.9%

Companies trading higher in after hours in reaction to news: URRE +66.7% (develops energy metals business and acquires its first lithium property in Nevada), OSUR +10% (receives a contract for up to $16.6 million in total funding from the U.S. Department of Health and Human Services to advance the Company's rapid Zika tests), WNC +2.6% (will replace EnerSys in the S&P SmallCap 600), FLO +1.8% (Two Directors disclosed purchase of 24000 shares, worth total of $365.3K), FIT +1.2% (light volume, favorable ITC ruling in Jawbone litigation), ESRT +0.8% (ticking higher after confirming an affiliate of Qatar Investment Authority has acquired an ~10% interest in the co at $21.00/share), CHK +0.5% (Director A. Dunham disclosed purchase of 350K shares worth ~$2.1 mln), AAN +0.5% (light volume, Director disclosed purchase of 40K shares, worth total of ~$1.01 mln), TSLA +0.2% (modestly rebounding following late pullback after the product announcement)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: LZB -15.1%, INTU -5.7%, DY -4.6%

Companies trading lower in after hours in reaction to news: COMM -1.2% (light volume - announces the sale of 7 mln shares of its common stock on an underwritten basis by an affiliate of The Carlyle Group), AMSC -0.5% (also light volume, discloses unfavorable court ruling)

>>> US Close Dow +0.10% S&P +0.20% NAsdaq +0.30% Russell +0.71%

Closing Market Summary: Retailers and Homebuilders Boost Indices

The stock market ended a relatively quiet session on a slightly higher note as an above-consensus reading of the New Home Sales Report for July and better-than-expected earnings results from the retail sub-group bolstered the broader market. The Nasdaq Composite finished higher by 0.3%, narrowly missing a new all-time closing high (previous: 5262.02). The S&P 500 settled behind the tech-heavy index, adding 0.2%.

Equity indices jumped at the start of the session as a strong performance from European bourses and a better-than-expected quarterly report from Best Buy (BBY 39.23, +6.43) bolstered the broader market. The benchmark index tested resistance near the 2193/210 area, but was unable to clear that price level despite a stronger-than-expected reading of new home sales for July.

The report showed that new home sales increased 12.4% month-over-month to a seasonally adjusted rate of 654,000 (consensus 580,000). The report added to recent upbeat housing data, but may have also elicited some fears regarding a sooner-than-expected rate hike. 

The S&P 500 (+0.2%) found support at the 2185/2188 price level as eight sectors finished in positive territory. The consumer discretionary (+0.5%) and materials (+0.8%) sectors ended atop the leaderboard while technology (+0.4%) and energy (+0.4%) followed. Conversely, countercyclical consumer staples (-0.1%) and utilities (-0.5%) ended in the red.

Retail names outperformed in the consumer discretionary sector (+0.5%), evidenced by the 1.0% gain in the SPDR S&P Retail ETF (XRT 46.16, +0.46). The group drafted higher following positive quarterly results and guidance from Best Buy (BBY 39.23, +6.43). Separately, Toll Brothers (TOL 31.91, +2.58) rallied 8.8% after beating revenue estimates for the quarter and narrowing its full-year guidance. The homebuilder also benefited from the positive New Home Sales Report. The broader iShares Dow Jones US Home Construction ETF (ITB 29.49, +0.75) settled higher by 2.6%.

The commodity-sensitive energy space (+0.4%) gained alongside crude oil futures. The energy component shrugged off opening hour weakness after reports indicated that Iran could be more willing to participate in potential OPEC actions to stabilize the oil market. The news was probably taken with a grain of salt, but still led to a good deal of short covering. WTI crude ended its day higher by 1.5% ($48.15/bbl; +$0.73).

The technology sector (+0.4%) displayed relative strength as software companies and networking names outperformed. Dow component Cisco Systems (CSCO 30.98, +0.35) rebounded 1.1% after sliding 1.1% last week. The PHLX Semiconductor Index (+0.5%) finished slightly ahead of the broader sector as Applied Materials (AMAT 29.95, +0.90) outperformed. The stock is up 8.2% since the company reported better-than-expected bottom-line results and upbeat fourth-quarter guidance on August 18.

Treasuries ended on a flat note with yields relatively unchanged throughout the complex. The yield on the 10-yr note finished flat at 1.54%.

Today's participation was below the recent average as fewer than 716 million shares changed hands at the NYSE floor.

Today's economic data was limited to the New Home Sales Report for July: 

  • New home sales increased 12.4% month-over-month in July to a seasonally adjusted annual rate of 654,000, which was well above the consensus estimate of 580,000 and up 31.3% from the same period a year ago
    • July 2016 marked the strongest pace of new home sales since October 2007

For more details on this economic release, be sure to visit Economic Calendar page.

Tomorrow's economic data will include the weekly MBA Mortgage Index and the FHFA Housing Price Index for June, which will be released at 7:00 ET and 9:00 ET, respectively. The day's data will be capped off with the Existing Home Sales Report for July (consensus 5.54 million), crossing the wires at 10:00 ET. 

  • Russell 2000 +10.0% YTD
  • S&P 500 +7.0% YTD
  • Dow Jones +6.5% YTD
  • Nasdaq Composite +5.1% YTD