Sometimes rebound relationships can really pay off. At least that’s what Walt Disney Studios is hoping now that it has agreed to enter a long-term agreement with DreamWorks to distribute upwards of six films a year starting in 2010. The deal was put together very quietly over the last several weeks as DreamWorks simultaneously tried to negotiate an agreement with Universal Pictures which had originally been announced back in October of last year. That deal fell apart late last week when Universal and DreamWorks could not agree on a set of terms and as Universal reportedly discovered DreamWorks was negotiating with Disney. When speaking with The Hollywood Reporter on Saturday the studio’s official line was:
“Universal Pictures has ended discussions with DreamWorks for a distribution agreement. Over the past several weeks DreamWorks has demanded material changes to previously agreed upon terms. It is clear that DreamWorks’ needs and Universal’s business interests are no longer in alignment. We wish them luck in their pursuit of funding and distribution of their future endeavors.????”
What a few of those “material changes” amount to says a lot about theatrical motion picture distribution and just where a studio realizes a profit when releasing a film. The deal that DreamWorks was originally negotiating with Universal was a straight distribution partnership. Such deals will usually see the production company paying for the production of a film while the studio pays for film prints, marketing and advertising in exchange for recouping costs and a share of the box office gross. That share can range anywhere from 8% to 15% of the gross - not the net - receipts. Read More
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