GLENDALE, Calif., Dec. 11 /PRNewswire-FirstCall/ -- DreamWorks Animation SKG (NYSE:DWA) today announced that it has reached a seven-year distribution agreement with Paramount Pictures for the rights to distribute DreamWorks Animation films in theatrical, home entertainment and television markets on a worldwide basis. The agreement is conditioned on the closing of Paramount's recently announced acquisition of the company's current distribution partner DreamWorks Studios.
"We are pleased with the benefits this new relationship provides DreamWorks Animation," stated Jeffrey Katzenberg, chief executive officer of DreamWorks Animation. "The existing talent of DreamWorks Studios and the resources available at Paramount Pictures will result in a very strong distribution partner that will create great opportunities for our products in the marketplace."
Under the terms of the new distribution agreement, Paramount Pictures will be responsible for the marketing and distribution of all of DreamWorks Animation films and will earn the same 8% distribution fee that had previously been paid to DreamWorks Studios. The new agreement with Paramount expires in 2012, which is two years longer than the term that existed in its original distribution deal with DreamWorks Studios. As a condition of the deal, DreamWorks Animation will receive $75 million in cash which it plans to use towards the repayment of debt.
Much like its old agreement with DreamWorks Studios, the company's new agreement with Paramount will continue to allow DreamWorks Animation to provide significant input in the marketing and distribution plans for its films. In addition, DreamWorks Animation will have the opportunity to promote its upcoming movies as well as collaborate on new television programming on the extensive network assets owned by Paramount's parent company Viacom including Nickelodeon, MTV, Nick at Nite, VH1, BET, TV Land, and Comedy Central.
"Over the past decade, DreamWorks Animation has produced some of the industry's most successful movies including the highest grossing animated movie of all time," stated Brad Grey, chairman and chief executive officer of Paramount Pictures Group. "The opportunity to work with DreamWorks Animation allows us to leverage our infrastructure and has the potential to create tremendous value for both organizations. We are looking forward to a long and successful relationship between the two companies."
About DreamWorks Animation SKG
DreamWorks Animation is principally devoted to developing and producing computer generated, or CG, animated feature films. With world-class creative talent, a strong and experienced management team and advanced CG filmmaking technology and techniques, DreamWorks Animation makes high quality CG animated films meant for a broad movie-going audience. The company has theatrically released a total of nine animated feature films, including Antz, Shrek, Shrek 2, Shark Tale and Madagascar. DreamWorks Animation's newest release, Wallace & Gromit: Curse of the Were-Rabbit, opened in theaters October 7, 2005.
Caution Concerning Forward-Looking Statements
This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the expected benefits to DreamWorks Animation SKG, Inc. (the "Company") from the new distribution agreement with Paramount Studios, the Company's proposals and plans to promote upcoming movies with Paramount and its affiliates, and the Company's beliefs and expectations concerning performance of our current and future releases. These statements are based on current expectations, estimates, forecasts and projections about the Company's future relationship with Paramount, the industry in which the Company operates, management's beliefs and assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of the Company. These risks and uncertainties include: the distribution agreement is subject to, and conditional upon, the closing of Paramount Studio's acquisition of DreamWorks Studio; audience acceptance of our films; our dependence on the success of a limited number of releases each year; the increasing cost of producing and marketing feature films, piracy of motion pictures; the effect of rapid technological change or alternative forms of entertainment; and, our need to protect our proprietary technology and enhance or develop new technology. For a further list and description of such risks and uncertainties, see the reports filed by us with the Securities and Exchange Commission, including our annual report on Form 10-K for fiscal year 2004 and our quarterly reports on Form 10-Q for the first, second and third quarters of 2005. DreamWorks Animation is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.
Source: DreamWorks Animation SKG
Web site: http://www.dreamworksanimation.com