DreamWorks Animation had one box office hit in calendar year 2013 in The Croods and one disappointment in Turbo, but it was a good year for CEO Jeffrey Katzenberg. His total compensation was $13.48M, up from $5.24M in 2012, according to an SEC filing today. The two catalysts came from his new employment contract inked in late 2012: an increase in salary from $365,386 to $2.5M, and non-equity incentive plan compensation of $6M. His compensation included $478,148 for personal security services which DWA says it only notes as part of the package because the SEC requires it. Former Chief Marketing Officer Anne Globe, meanwhile, who exited the company in August, would have been one of the three highest-paid DWA execs had she remained. She earned $1.44M for 2013 including $356,987 in severance payments. DWA took a $13.5M write-down on Turbo in Q4 2013 after it underperformed, but Katzenberg said in February that the franchise will be profitable eventually with its Netflix animated series.
We should have seen this coming. AwesomenessTV’s comedy videos make it a big deal for teens and kids in the YouTube world, and it has a series on Nickelodeon. That makes it a natural to get into the licensed merchandise business. The DreamWorks Animation owned operation says this morning that it hired former Claire’s Stores CEO and former Disney Stores Worldwide president James Fielding to be AwesomenessTV’s Global Head of Consumer Products and Retail. “AwesomenessTV has built an amazing brand in a very short time, engaging teens around the world,” he says. “This is an incredible opportunity. I look forward to building a long-term business strategy around consumer products and retail experiences that speaks to our fans in new and innovative ways.” He has a lot of running room: AwesomenessTV still isn’t a big moneymaker for DWA. The online video operation contributed just $2.4M in profit and $11.4M in revenue to the studio last year after it committed $33M — with potentially $117M more if it meets performance targets — in May to acquire it. DWA still believes in online video: Last week it agreed to pay $15M for Big Frame, another online multi-channel network operation.
Eleven months after being scooped up by DreamWorks Animation, the YouTube multi-channel network has made an acquisition of its own. Teen/tween-targeted AwesomenessTV said today it paid $15 million for Big Frame, which boasts 300-plus YouTube channels and nearly 40 million subscribers. The deal — which is subject to conditions but expected to close this month — brings such familiar online personalities as Jimmy Tatro, Tyler Oakley, DeStorm and MysteryGuitarMan to the next-gen media company led by founder and CEO Brian Robbins. Steve Raymond and Sarah Penna launched Big Frame in 2011, and it raised more than $3 million in seed capital the following year.
The former CMO at Turner Animation has a new gig. Brenda Freeman is joining DreamWorks Animation as Head of Television Marketing. Before Turner, where her duties included marketing strategy for Cartoon Network, Freeman was SVP Integrated Marketing and Promotions for Nickelodeon and MTVN Kids and Family Group. She also had stints as VP Consumer Marketing for VH1 and Executive Director of Marketing and Special Events for ABC Radio Networks. “Brenda’s vast experience in the branding, marketing and distribution of family and kids programming will be invaluable as we continue to grow our television division,” DreamWorks Animation CMO Dawn Taubin said.
UPDATE, WRITETHRU 8:05 AM PT: DreamWorks Animation and partners held a kick-off ceremony in Shanghai earlier today to unveil the master design plan for their DreamCenter entertainment complex. The $2.4B “lifestyle destination” is due to begin construction this year and open in 2017. On the ground were DWA CEO Jeffrey Katzenberg, China Media Capital chairman Ruigang Li; chairman of the Lan Kwai Fong Group, Allan Zeman; and reps of CDB Capital. The “Dreams Come True” celebration presented further details and new artists renderings of the 463,000 square meter complex (continued below):
Among the attractions will be a 500-seat IMAX movie theater to accomodate international film festivals and red carpet events (pic below). Bars, restaurants and performance venues are part of the designs and there will be a “Dream Avenue” theater district fashioned after Broadway and the West End in London. DreamCenter will also house the headquarters of Oriental DreamWorks, the joint venture between DWA, CMC and other local partners who are cooperating on the production of Kung Fu Panda 3. Katzenberg offered, “As the home base for Oriental DreamWorks Studio for the creation of top-quality family entertainment, DreamCenter is the place where great entertainment is not only displayed, but also where it is created.” The DreamCenter project was originally announced in 2012 for projected completion in 2016. It’s one of two major studio efforts in Shanghai. …
In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom look at the Obama administration’s unusual intercession in the Aereo Supreme Court case on behalf of the networks and the notable absence of tech industry involvement in the case so far.
They also try to make sense of John Malone’s latest complicated stock shuffle that affects SiriusXM and Charter Communications; check in on the many Big Media highlights from this week’s Deutsche Bank investor conference; break out the checkbook for that Amazon Prime price hike; and wonder how DreamWorks Interactive can be on track for both a $310 million global box office haul for Mr. Peabody & Shermanand a write-down of $84 million for that same film.
LOS ANGELES, March 13, 2014 – King Julien has officially decreed that Turbo and his Fast Action Stunt Team cannot hog all the extreme fun. In an effort to appease the lively lemur from Madagascar, DreamWorks Animation and Netflix are announcing three new original series to debut on the world’s leading Internet television network in late 2014: King Julien (in his very own show, of course), Puss in Boots (the legendary cat has nine lives worth of stories to be told) and Veggie Tales in the House (new recipes for faith-based values as Bob and Larry venture off the counter top).
Not to be outdone, Turbo and the team are revving their engines for all new episodes from the first season of Turbo FAST, available for streaming on April 4. Netflix’s first original series for kids launched Christmas last year and became an instant favorite across the world. Families in the U.S. and Canada can also now catch up on the back story of all the speedy snails with the arrival of the feature film Turbo on Netflix.
UPDATE, 1:01 PM: Investors seemed to sour on the numbers over the course of the trading day, with DreamWorks Animation closing at $29.05, -1.4%. Sterne Agee’s Vasily Karasyov joined the company critics saying that Mr. Peabody & Sherman “is on track to generate $310M in global box office, which would translate into an $84M write-down.”
PREVIOUS, 8:43 AM: The $32.M weekend domestic box office for Mr. Peabody & Sherman was lower than the $43.7M average for DreamWorks Animation‘s recent original films, and less than most analysts anticipated. But it was strong enough to leave the basic debate over DreamWorks Animation’s stock intact with shares up less than 1% to $29.74 in morning trading. Cowen and Co’s Doug Creutz leads the naysayers, dropping his price target for DWA to $21 from $35. Following losses for Turbo and Rise Of The Guardians, he says “the company has been piling up an increasingly alarming film body count over the past few years.” Calling P&S “just another dog,” he predicts that the film will merely break even: He’s concerned that it will struggle in the U.S. with school spring breaks delayed by the later than usual date for Easter (April 20). In addition, in seven other markets (UK, France, Argentina, Germany, Mexico, Russia, and Spain), P&S “opened 37% below The Croods and 22% below Turbo.”
Others are more hopeful. Stifel’s Benjamin Mogil acknowledges that that the domestic opening was softer than expected, but adds that its “A” rating at CinemaScore means that “the next two weeks
The DreamWorks Animation CEO still has a lot invested in snails — with Netflix carrying the studio’s animated series Turbo FAST — and says the film’s failure doesn’t mean the TV show will skid off track. “We believe the overall Turbo franchise…will be a successful and profitable piece of business for years to come,” Jeffrey Katzenberg told analysts in a call to discuss Q4 earnings. He noted that Netflix says Turbo FAST is “one of the most popular kids series ever on their platform.” The DWA chief called the $13.5M writedown on the film “a modest impairment charge” needed because it “fell short of our expectations,” especially overseas. But the loss stung: When an analyst said it was small enough to constitute a rounding error he fired back that “it’s not a rounding error for us,” adding that the company wants to be transparent. Distributor Fox will recoup its costs for Turbo in the current quarter. The spinoff TV series may still complicate DWA’s 2014 financials. It expects to deliver a big slug of episodes to Netflix in Q4 and will have to rev up spending to market them. But DWA said that will pay off in 2015: It raised its TV revenue forecast for next year to more than $250M from more than $200M.
So much for CEO Jeffrey Katzenberg’s prediction that Turbo would be profitable. DreamWorks Animation‘s shares are down 5.6% in post-market trading after releasing a Q4 earnings report that includes a $13.5M impairment charge, equal to 12 cents a share, for the film, which the company attributes to “its performance during the last two months of the quarter.” DWA took an additional $6.7M charge, worth 6 cents a share, mostly for a Rocky & Bullwinkle short the studio hoped to run before Mr. Peabody And Sherman. Still, the bottom line looks better than the it did in the same quarter in 2012, when it took an $87M charge for Rise Of The Guardians. The company generated net income of $17.2M vs a loss of $82.7M the previous year on revenues of $204.3M, -22.8%. Analysts anticipated a top line of $227.1M. Earnings, at 20 cents a share, also missed forecasts for 33 cents. DWA didn’t give year-over-year comparisons for the results at each of its divisions. It says that feature films contributed $127.9M in revenue — including $46.8M from library titles –with a gross profit of $53.4M. Television saw revenues of $47.1M with a $7.3M gross profit. Consumer Products generated $12.4M in revenue with a $2M gross profit. And other businesses had $16.8M in revenue with $2.3M in gross profit, mostly from streaming rights to Shrek The Musical. …
Up to now the studio licensed books based on its characters to different publishers with Simon & Schuster serving as the master licensee. But now it’s taking charge with DreamWorks Press, described as “an in-house operation which will publish digital and print books inspired by the studio’s vast [intellectual property] library.” The unit’s works will be sold and distributed by The Perseus Books Group and will “give fans a meaningful way to interact with us on a year-round basis,” DreamWorks Animation‘s Head of Franchise Shawn Dennis says. The first DreamWorks Press books will be ready by this year’s holiday shopping season. Franchises initially targeted for digital and print books and book apps include Kung Fu Panda, Madagascar, Shrek, and 2015′s B.O.O.: Bureau Of Otherworldly Operations along with properties from DreamWorks Classics — the Classic Media library bought in 2012 and that includes Little Golden Books — and AwesomenessTV. DWA says that it will “build an international team within the publishing arm to ensure that content is produced and enjoyed around the world.” Publishing vet Emma Whittard will run DreamWorks Press. “With all of the proper pieces now in place, we are perfectly positioned to grow the publishing business in a significant way for years to come,” she says.
Add pay-as-you-go movie and TV service M-GO to the list of video streaming providers announcing at International CES their new ability to offer 4K programming to TV sets capable of handling the super-sharp picture quality. The DreamWorks Animation-Technicolor joint venture says it initially will provide 4K transmissions for about 100 movies and TV shows that will work on Samsung UHD TV sets beginning this spring. “We’ve taken our content and optimized it for the chip on the Samsung TV,” M-Go CEO John Batter tells me. No word yet on what titles will be included at first, or which studios will be represented. Productions not originally shot in 4K will be optimized “to enhance the visual crispness, color acuity and image depth for 4K television owners,” the company says. The 4K programming will come with a premium price, probably anywhere from $2 to $5 more than the equivalent versions in traditional HD. Last month Disney was the last of the major studios to provide content to M-GO.
Morgan Stanley analyst Benjamin Swinburne thinks so, sticking with his bearish case today following a year when the studio’s stock soared 114% to $35.50. He raised his target price this morning — but just to $31, which is why he still has an “underweight” recommendation for the stock. The market’s current valuation only makes sense, he says, if DreamWorks Animation beats his film box office forecasts by as as much as 15%, or TV revenues come in 70% higher than he envisions or consumer products beat his expectations by 80%. Looked at another way, DWA would have to generate about $400M in cash flow this year, ahead of his projection for about $310M. After deals with Netflix and others designed to make DWA a TV production power “We suspect the market is overestimating the impact of television and [consumer products] growth while underestimating the importance of film performance” which still accounts for more than 70% of gross profits, Swinburne says. He remains skeptical DWA can fulfill the Street’s extravagant expectations even though he’s warmed somewhat to its prospects. He no longer expects CEO Jeffrey Katzenberg to take a $10M writedown on Turbo, and raised his box office forecast for How To Train Your Dragon 2 by $20M “primarily on a strong international outlook.” Still, he’s concerned that in November Lionsgate’s The Hunger Games: Mockingjay Part 1 comes out just a few days …
Thomas J. McLean is an AwardsLine contributor.
Caveman movies are favorites for Chris Sanders, co-writer and co-director of DreamWorks Animation’s The Croods. But even his familiarity with the genre didn’t prepare him for just how deep the movie about a caveman family tempted away from the absolute safety of their cave to risk finding a more rewarding life in the larger world could get.
“It is purely about family and relationships, and really about life in general,” says Sanders, who previously co-wrote and co-directed Lilo & Stitch for Disney and DreamWorks’ How To Train Your Dragon. “That was the big surprise for me, was that within a few weeks we realized that we weren’t just dealing with a family, we were dealing with very large questions — questions about life and existence, and that’s something with a caveman film that I didn’t expect.”
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LOS ANGELES, Dec. 3, 2013 — Turbo and his Fast Action Stunt Team are challenging the world to “snail up!” as they make their global television debut on Christmas Eve – Tuesday, December 24th at 12:01 AM PST – with the launch of DreamWorks Animation’s all new Turbo FAST series, exclusively in all Netflix territories. Families will be able to stream the first five episodes this holiday season, with additional all new episodes premiering throughout the year.
UPDATE, 1:27 PM WRITETHRU: President Obama took to the stage today for a speech on the economy at DreamWorks Animation, the company run by one of his biggest Hollywood bundlers Jeffrey Katzenberg. After being introduced by Mellody Hobson — the DWA board chairman from Aerial Capital Management, a Chicago native and longtime friend — he thanked Katzenberg for inviting him before launching into a pro-Hollywood and pro-economy message tailored to the crowd estimated at 1800-2000 that included DWA employees and pretty much every entertainment mogul in the city. “His place in the entertainment business is legendary … don’t need to puff him up too much he has a healthy sense of self”, Obama joked about Katzenberg, with the president adding that “my ears were the inspiration for Shrek”. The president called the entertainment biz “one of America’s biggest exports” and “one of the bright spots of our economy”, adding that he’s figured out what his next job will be. “I told Jeffery I’d like to work here”, Obama said to cheers from the crowd. As he wrapped up, after his customary “God bless America” line, Obama said, “Can’t wait to see your next movie”.
The Glendale stop, on the second day of a two-day LA fundraising swing, drew a who’s who of Hollywood moguls including CBS Corp’s Les Moonves, NBCUniversal’s Ron Meyer, Jeff Shell and Robert Greenblatt, Sony’s Amy Pascal and Michael Lynton, Paramount’s Rob Moore, Fox’s Jim Gianoplulos and Peter Rice, Lionsgate’s Jon Feltheimer, Warner Bros’ Kevin Tsujihara, Disney’s Bob Iger, Alan Horn and Anne Sweeney, LA Film Czar Tom Sherak and the MPAA’s Chris Dodd. Those execs participated in a closed-press meeting with Obama ahead of his speech, with a White House spokesman describing it as an “opportunity to discuss the economy and highlight the entertainment industry as a bright spot in our growing economy. The President discussed the impact that broader economic conditions has on the industry. He also touched on piracy and intellectual property rights, which are chief concerns of participating film industry leaders.” The moguls were hard to pin down on the meeting, with Meyer telling me only that “it was great, really great”.
VFX artists and supporters have gathered in Glendale for today’s “Go Green” rally organized around President Obama‘s visit to DreamWorks Animation. (The President is slated to address an audience on the closed DWA campus shortly; look for coverage from Deadline’s Dominic Patten.) Security was in place around DWA as the “Go Green” rally marched down Flower Street:
Inside the DWA event, new L.A. film czar Tom Sherak said of the protesters: “This situation didn’t happen overnight. We have to find a way to entice these companies to stay here.”
UPDATE: Organizers of the VFX artists’ protest scheduled during President Obama’s visit to DreamWorks Animation on Tuesday say they now plan to march between Griffith Manor Park and the street. The group has also announced the name of its CVD campaign coalition: Association of Digital Artists, Professionals & Technicians (ADAPT).
PREVIOUS, 1:34 PM: Barack Obama’s visit to DreamWorks Animation tomorrow will be matched by a protest by the VFX professionals behind an anti-subsidy tariff campaign, but the organizers say they don’t have the president — or DWA head Jeffrey Katzenberg – in their sights. “We are not trying to embarrass DreamWorks Animation at all,” the industry blogger known as VFX Soldier told Deadline. “This is about raising awareness about what is happening outside the walls of DreamWorks: The absolute collapse of VFX employment.”
Obama is in town today and Tuesday for midterm election fundraisers as well as his DWA appearance. After a studio tour and a meeting with industry leaders, Obama is expected to speak about the economy and the strength of the entertainment industry in his DWA address scheduled for 12:15 PM Tuesday. During his DWA visit VFX supporters will gather just under a mile away at Glendale’s Griffith Manor Park. The VFX activists are aghast that Obama would praise employment at a studio hit by layoffs in the last year to an animation and VFX community that’s struggling to survive. Pink slips delivered by DWA earlier this year were the result of changes in the studio’s production schedule, not outsourcing or similar activities. Sources tell Deadline that many of those let go from DWA have since been rehired as the studio has new films in the pipeline. Still, everyone in VFX feels the instability of the industry. “We’re trying to prevent the embarrassment,” said VFX Soldier. “Why would you go to L.A.? This is ground zero.”
While the president won’t see the protesting VFXers, the White House is clearly sensitive to perception about Obama speaking at the HQ of his biggest donor bundler. “DreamWorks obviously is a thriving business and is creating lots of jobs in Southern California and the fact of the matter is Mr. Katzenberg’s support for the president’s policies has no bearing on our decision to visit there. Rather, it’s an opportunity to highlight the success of one business and the success that they’re having in creating jobs in Southern California,” said White House Deputy Press Secretary Josh Earnest today on Air Force One according to pool reports. Similar to the fundraiser last week for Gov. Jerry Brown at Disney Studios boss Alan Horn’s home, a number of other studio chiefs such as Warner Bros’ Kevin Tsujihara and CBS’ Les Moonves are expected to attend Obama’s speech at DWA.
If you aren’t attending the two big-ticket fundraisers President Obama is headlining in Beverly Hills tonight, you might want to stay out of West LA today. Because of Obama’s two-day visit, the LAPD says there’ll be street closures from the 405 Freeway to La Cienega Boulevard and from Santa Monica Boulevard south down to Venice Boulevard today from 4:45-10 PM. There will also be closures from Fairfax to Western and from Beverly Boulevard to Pico from 8-10:45 AM Tuesday for a Hancock Park fundraiser. Also expect delays in the Glendale area from 10:30 AM-1:30 PM when the President heads over to big bundler Jeffery Katzenberg‘s DreamWorks Animation for a speech on the economy and the entertainment industry.
Today, Obama is set to fly into LAX at 4:30 PM and then chopper over to the Veterans Administration building at 11000 Wilshire Blvd near UCLA. Coming to town from San Francisco, POTUS will head first to a $2,500-$15,000 a ticket gathering at Magic Johnson’s Beverly Hills house; Obama is scheduled to speak at the event around 7:10 PM. Staying in the neighborhood, the President will then head to the home of Haim Saban and his wife Cheryl for a $16,200-a-person or $32,400-a-couple dinner. A longtime Democratic Party supporter who had an event with Hillary Clinton last month at his house, this marks the first fundraiser the Power Rangers billionaire has held with Obama directly. After delivering remarks at 8:20 PM, Obama will head to a hotel, likely the Beverly Hilton, for the night.