020909 Update: The deal is now official.

Nikki Finke reported it first, then the NY Times confirmed the news… Dreamworks SKG  (the film and tv, but not the animation, division) has ended negotiations to partner with Universal Studios and instead is heading just a bit further down the concrete banks of the LA river to Walt Disney Studios.

Plenty of rumors are swirling. One claims Disney would sell its Miramax division (I see that as unlikely, since it is Disney’s best bet at Oscar Gold each year). Another is that David Geffen has always wanted to move to Disney, but that Spielberg felt more comfortable at Universal since that’s where his Amblin Production offices are. That seems more likely.

If anything this bodes well for the rumored sequel to Who Framed Roger Rabbit? Disney would have to team with Amblin again to make the sequel. Having Steven Spielberg on your team should make that a snap.

If this comes to fruition, one has to wonder how it will affect Bob Iger’s decision to keep the number of films it releases each year down to about a dozen. Would that number go up or would Dreamworks canablize other projects within the Disney studio?