EXCLUSIVE: Jeffrey Katzenberg promised Wall Street analysts that DreamWorks Animation would have a new distribution deal by Labor Day — and he does.
Sony had been in the running down to these very last weeks.
But when it didn’t close, DWA turned to Fox.
The key question on a distribution deal is how much DWA will have to pay.
It currently pays Paramount 8% on all windows.
That’s below market – 10% is probably more in line.
(One analyst estimates that 5% of each DWA film’s gross revenue covers the distribution personnel and infrastructure costs.) But DWA has to drive a hard bargain because it can’t afford to take a hit to its earnings.
There was some thought that DWA might self-distribute – especially after it hired Disney’s Chuck Viane a year ago to consult on distribution options.
But Katzenberg confirmed last month that he was no longer considering self-distribution.
The problemn for the public company is that Wall Street has soured on DreamWorks Animation.
Of the 14 analysts who track the company, only one rates it a ‘buy’, 7 recommend ‘hold’, and 6 have it either at ‘underperform’ or ‘sell’.
Although shares are +7.1% in 2012, they’re -11.3% for the last 12 months, and -54.5% since the company went public in 2004.