DreamWorks Animation to sell Glendale campus, then sign lease

DreamWorks Animation has announced it sold its 13-acre campus in Glendale this week, only to lease it back from an undisclosed buyer as part of a financial restructuring effort.

Top studio executives discussed the sale of the $185-million property during a conference call on Tuesday.

The animation studio suffered a tough fourth quarter in 2014, posting a $263.2-million loss followed by 500 layoffs last month.

But selling the studio was something that was on the table before financial woes started being addressed, said Fazal Merchant, the company’s chief financial officer, according to transcripts from the conference call.

“There’s obviously a benefit from the liquidity perspective, but just corporate finance theory would tell you having a large unencumbered piece of real estate on the balance sheet of the company of our nature just doesn’t make a ton of sense,” he said. “So, we’ve been looking at that for quite some time.”

City officials said they’re pleased the studio will be staying in the community and that company officials have made it clear about their intentions to remain.

“They’ve obviously restructured themselves in a manner in which they have more cash flow that they probably are looking to put into their operations and programming,” said city spokesman Tom Lorenz. “With that said, others are envious that DreamWorks has a home in Glendale.”

DreamWorks Animation is only releasing one movie this year, “Home,” and, during the conference call, Chief Executive Officer Jeffrey Katzenberg said 2015 will be a “break-even” year.

However, looking ahead he said several titles will be released annually in the future.

“Finally, I think we’ve got six movies coming in ’16, ’17 and ’18 that have enormous, enormous potential to them and I love them,” Katzenberg said. “And I think they’re going to be great successes for us.”