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Disney Inks DreamWorks Studios Distribution Deal

9 Feb, 2009 By: Erik Gruenwedel


The Walt Disney Co. Feb. 9 confirmed speculation that it had entered into a long-term agreement with DreamWorks Studios to distribute all of the studio’s live-action movies beginning in 2010.

The five-year deal would end DreamWorks’ current DVD distribution agreement with Universal Studios Home Entertainment at the end of the year. Walt Disney Studios Home Entertainment would assume global distribution of DreamWorks packaged media, except in India, according to a Disney spokesperson.

Paramount Home Entertainment continues to separately distribute DreamWorks Animation packaged media, according to the studio.

Universal Studios, which had been negotiating a distribution deal with DreamWorks, the studio co-founded by Steven Spielberg, Feb. 6 acknowledged the end of discussions.

“It is clear that DreamWorks’ needs and Universal’s business interests are no longer in alignment,” the studio said, in a statement. “We wish them luck in their pursuit of funding and distribution of their future endeavors.”

Under terms of the new pact, Disney would handle distribution of about six DreamWorks movies annually under its Touchstone Pictures banner. It would also make available a $175 million loan to DreamWorks that reportedly can be accessed only if Spielberg raises $325 million in debt financing, according to the Los Angeles Times.

The movies will be produced in association with Reliance Big Entertainment, the Indian-based conglomerate that last summer entered into a $1.25 billion co-financing deal with Spielberg and partner Stacey Snider, CEO of DreamWorks.

“Disney has given us all the support we need to be in a position to raise our money and launch our company,” Snider told the Times.

The new DreamWorks partnership would reportedly involve Disney Studios upping personnel for the first time since 2006, when CEO Bob Iger cut 25% of its staff and trimmed the film unit’s release slate by 50%.

With Disney reporting a 64% drop in operating income for its filmed entertainment division in the most recent quarter, the addition of DreamWorks movies could help pad the bottom line and justify additional personnel.


“We will sit down and be putting together where we need to add personnel,” Disney Studios chairman Dick Cook told Reuters.


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