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  • Disney, Universal after DreamWorks distribution

    Two take lead in DreamWorks race

    Universal, Disney top contenders for distribution rights

    By Carl DiOrio
    The Hollywood Reporter
    Sept 22, 2008, 11:00 PM ET

    It's suddenly looking like a two-horse race for DreamWorks distribution rights, but those laurels may come with a more limited payoff than some expect.

    Universal holds a big lead entering the derby's homestretch, with Disney still in the running and Fox now considered further back in the pack. As for terms of any deal to distribute DW films once Team Spielberg has split with Paramount, sources with knowledge of preliminary talks said Monday that the distribution fee could be as low as 8%.

    That's a relatively tiny purse after such a high-profile race. But the winner will be in the Steven Spielberg business, with all the cachet such an association can offer.

    By contrast, there's no almost no chance of Par's maintaining even a distribution relationship with DreamWorks after its reconstitution as a private company. And that, too, appears more a reflection of relationships -- soured ones, in this case, between Par and DreamWorks execs -- than any financial considerations.

    So less than three years after Par parent Viacom struck a $1.6 billion deal to acquire DreamWorks, the Melrose Avenue studio is about to cut regular ties with its key principals other than on selective future projects for which Spielberg might return as a producer.

    Top DreamWorks execs were expected to tender their formal resignations from Par by this morning. The move by Spielberg, DW chairman David Geffen and CEO Stacey Snider follows their alerting Par of the new $1 billion-plus financial arrangement with Reliance Big Entertainment.
    Involved parties have been careful to stress that no "formal" negotiations have been held, in deference to contractual obligations of the DW brass while still at Par. But it's an open secret that a handful of studios have been wooing Spielberg's representatives for months.

    DreamWorks Animation -- a separate public company unconnected to the latest DW venture -- will likely keep Par as its distributor at least until 2012. Its agreement allows an early exit in 2011, but there would be attendant costs, so DWA insiders say they're sticking with Par for the foreseeable future.

    And why not? DWA pays the studio a distribution fee of just 8%, almost half what's paid on many distributor-for-hire arrangements.

    Many have assumed the new DreamWorks would be forced to pay a bit more than that to whomever it grants theatrical distribution rights. DreamWorks is not DWA, which releases just two pics a year -- but they are such high grossers as to make even an 8% cut a nice payday.

    The new DreamWorks is expected to require yearlong distribution help for its planned annual slate of six pics, some of which would be unlikely to ring up the kind of coin registered by this summer's "Kung Fu Panda," a $215 million domestic grosser. That had led many to predict DW might have to pay a distribution fee of 10% or more to whomever it chooses as its releasing partner.

    Yet it now appears the new DreamWorks might secure an arrangement roughly of the sort enjoyed by DWA.
    Two take lead in DreamWorks race
    "If you don't know how to draw, you don't belong in this building" - John Lasseter 2006

  • #2
    Re: Disney, Universal after DreamWorks distribution

    I would really love it for Disney to get it. Then maybe they could retire the Touchstone banner, and DreamWorks become the "adult studio" of Disney, or if they're forced to change DreamWorks' name, then it'll become Touchstone.

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    • #3
      Re: Disney, Universal after DreamWorks distribution

      I'd rather like Universal to have Dreamworks back where it belongs

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      • #4
        Re: Disney, Universal after DreamWorks distribution

        I think Universal is probably the likely (and better) choice.

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        • #5
          Re: Disney, Universal after DreamWorks distribution

          Originally posted by sir clinksalot View Post
          I think Universal is probably the likely (and better) choice.
          Well the pro out of this would be, Roger Rabbit.
          Goodbye, Me Bizarro is not Monkey Joe. Me Bizarro hates Disney parks so much. Hello

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          • #6
            Re: Disney, Universal after DreamWorks distribution

            No real surprise:


            Posted: Mon., Oct. 13, 2008, 11:22am PT

            DreamWorks, Universal ink deal

            Studio sign seven-year distribution pact

            By Tatiana Siegel
            Variety

            DreamWorks has inked a seven-year distribution pact with Universal Pictures.

            Move had been anticipated given the longstanding ties between DreamWorks principals Steven Spielberg and Stacey Snider and Universal.

            According to DreamWorks insiders, Universal will receive an 8% distribution fee for releasing DreamWorks' slate.
            http://www.variety.com/article/VR111...goryid=13&cs=1
            "If you don't know how to draw, you don't belong in this building" - John Lasseter 2006

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            • #7
              Re: Disney, Universal after DreamWorks distribution

              No surprise there, and I'm happy with the results. Spielberg has been in bed with Universal from his teenager days and I think the types of movies Dreamworks puts out fits better in the Universal library than the Disney ones. I also wouldn't mind if Universal got the animation library eventually since they really need those if they want to be more competitive with Disney in their theme parks. It hasn't stopped them yet, but i think it'd be totally weird to see Shrek and Mickey share the same family.

              It actually makes me sick to my stomach.


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              • #8
                Re: Disney, Universal after DreamWorks distribution

                Sick to your stomach?

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                • #9
                  Re: Disney, Universal after DreamWorks distribution

                  Originally posted by CaliforniaAdventurer View Post
                  Sick to your stomach?

                  Yah.


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                  • #10
                    Re: Disney, Universal after DreamWorks distribution

                    Posted: Wed., Dec. 17, 2008, 5:30pm PT

                    Is DreamWorks' deal stalling?

                    Financial crunch threatens studio's future

                    Spielberg

                    By Anne Thompson
                    Variety

                    DreamWorks' lofty ambitions have been put on hold by the financial crunch.

                    The studio and Universal Pictures have a deal to distribute five to six movies for an 8% distribution fee a year. But that deal is now in jeopardy.
                    India's Reliance Big Entertainment was putting up $500 million in equity for DreamWorks against an expected $750 million in loans with the ultimate aim of funding a slate of 36 movies over a period of seven years.

                    However, DreamWorks reps are still struggling to acquire the bank portion of the leveraged deal.

                    Despite the blue-ribbon nature of the DreamWorks enterprise, banks in general are slamming the door on this sort of funding -- or any funding at all.

                    As DreamWorks limps along on some $75 million in bridge financing, they face a deadline in mid-January to fork over $20 million to acquire the 17 projects they were to make at Paramount. After the AIG collapse, JP Morgan had delayed until January its plan to raise loan pledges from a number of other banks. The bank's official position is one of optimism: They expect to raise $300 million in the first quarter as they pursue a more modest staged financing approach.
                    Is DreamWorks' deal stalling? - Entertainment News, Front Page, Media - Variety
                    </SPAN>
                    "If you don't know how to draw, you don't belong in this building" - John Lasseter 2006

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