The stock rose 8.4% today after Stifel analyst Benjamin Mogil upgraded his recommendation to “hold” – mostly due to his view that The Croods will generate solid box office sales after its March 21 opening. His tracking suggests that domestic ticket buyers will spend $50M on the DreamWorks Animation film in its opening weekend, which could propel it to total theatrical sales of $150M. That’s a little below Wall Street’s expectation for $160M. But investors may be pleasantly surprised by international sales. Croods will be “the first new film under the Fox distribution deal,” he says, and the News Corp-owned studio is especially strong overseas. Mogil forecasts $300M in international box office sales. If he’s right then investors’ fear that DreamWorks Animation will be hit with a second consecutive disappointment after Rise Of The Guardians will have “largely played itself out.” Indeed, he says that CEO Jeff Katzenberg’s $87M write-down for the Christmas release was “kitchen-sink in depth” which means it could “actually generate some marginal contribution” to the bottom line. READ MORE »
Ahead of next month’s MipTV market in Cannes, Gaumont is rebranding its Alphanim label to become Gaumont Animation. Under its new banner, the children’s entertainment producer and distributor has entered a development and production agreement with DreamWorks Classics …
Studio moguls always feel that they need their tentpole releases to succeed. But they rarely have as much riding on a single film as DreamWorks Animation CEO Jeffrey Katzenberg will on March 22 when he releases The Croods. His company’s dreary Q4 financial report yesterday, which included an $87M writedown on its Christmas release Rise Of The Guardians, set the stage. If The Croods is a success, then investor concerns about the company “will fade,” Lazard Capital Markets Barton Crockett says. But a miss “would amp concerns about a creative crisis, and the big cash drain that results when movies misfire.” Good box office sales may not be good enough. Barclays’ Chris Merwin says the company needs “an exceptional performance” — he expects Croods to generate $150M domestically, and $300M overseas. Forecasts like his are important for investors who are wondering whether this is a good time to buy DreamWorks shares — which are down 3.4% so far today, and -26% since November 2 when it hit a 52-week high of $21.99. In Wall Street terms, the company seemed to take a “bath” yesterday with its Q4 report. It took $165M in writedowns, resulting in a far bigger than expected loss.
I can’t remember a time when I’ve heard DreamWorks Animation CEO Jeff Katzenberg sound so down on an earnings call — and it’s mostly due to the red ink for Rise Of The Guardians. Even when an analyst congratulated him for the Oscar he just picked up for his charitable work he said that “we have good days and bad days.” This apparently was one of the latter ones. Guardians “was the first movie of ours in 17 in a row that didn’t work,” he told analysts. “And when that happens it makes you rethink everything.….We’ve done a reset and we’ve done it across the board.” It led to the decision to make substantial layoffs – 350 during the year, Deputy CFO Richard Sullivan said — in which “many valuable members of the DreamWorks family will be leaving”, Katzenberg said. But using the trendy corporatespeak, he says this will “right-size the whole enterprise.” DreamWorks Animation will look to new technology to help make movies “faster and cheaper” putting the company on a long-term “successful path going forward….Would these things have happened without the failure of Guardians? I don’t know.”
Here’s a clip from DreamWorks Animation‘s latest pic that just screened out of competition at the Berlin Film Festival. The prehistoric adventure is written and directed by Kirk De Micco and Chris Sanders (co-director of How To Train Your Dragon and Lilo & Stitch) and the voice cast includes …
After announcing in August that it plans to open a theme park in Shanghai by 2016, DreamWorks Animation today unveiled plans for Russia. The company has partnered with property development and management firm Regions GC to build what is promised to be Europe’s largest indoor theme parks. The attractions in Moscow, St. Petersburg and Yekaterinburg are expected to be completed in 2015 and are planned as year-round “entertainment zones” — the indoor placement designed to avoid weather being an issue.
Each complex will incorporate a movie and concert hall, 4D movie theater, three-star 400-room hotel and retail space. DreamWorks Animation properties to be featured include Shrek, Madagascar, How To Train Your Dragon, Kung Fu Panda and the upcoming garden snail adventure Turbo, which will bow in Russia on July 11 ahead of its U.S. debut.
Russian box office jumped 8% in 2012 for over $1.2B in takings and DWA movies are popular there. Madagascar 3: Europe’s Most Wanted is the second-highest-grossing animated film in Russian history and the fourth-biggest film of all time. “Russia is one of the most important markets in the world for us,” said CEO Jeffrey Katzenberg. “All of us at DWA are extremely excited to work with Regions CG to be the first Hollywood studio to create not just one, but three, theme parks in Russia.”
Up to now execs at cable networks such as Nickelodeon that syndicate their kids shows to Netflix say the streamed viewing doesn’t cannibalize conventional TV watching. But we’ll see whether they’re as forgiving in December when Netflix introduces its first original kids show, Turbo: F.A.S.T. (Fast Action Stunt Team) – based on DreamWorks Animation‘s upcoming theatrical film Turbo – in the U.S. and 40 other countries. “Netflix boasts one of the largest and fastest-growing audiences in kids television,” DreamWorks Animation CEO Jeff Katzenberg says. “They pioneered a new model for TV dramas with House Of Cards, and now together, we’re doing the same thing with kids’ programming. DreamWorks is thrilled to be part of the television revolution.” Netflix’s Chief Content Officer Ted Sarandos says that ”creating an original series for kids was a natural for us. And we’re doing it in a big way by adapting Turbo, this year’s DreamWorks Animation summer tentpole movie.” The announcement comes as the studio’s movies shift from HBO to Netflix for showing in the premium TV window.
Listen to (and share) episode 22 of our audio podcast Deadline Big Media With David Lieberman. This week Deadline Executive Editor Lieberman and host David Bloom look at what’s driving Disney’s strong share price during a solid but unspectacular quarterly earnings report, the near-record lows hitting DreamWorks Animation and the near-record highs lifting News Corp.
Investors are casting a jaundiced eye on last night’s news about DreamWorks Animation’s delayed release of Mr. Peabody and Sherman (to Spring 2014 from 2013), and the removal of Me & My Shadow from the 2014 list. The stock is down 3.8% in mid-afternoon trading to $16.76, and has sold today for as little $16.26. Piper Jaffray’s James Marsh downgraded the company to “Neutral,” and reduced his price target to $18 from $25. He’s concerned because “this is the second time the company has backed away from a more ambitious three film per year slate and all of its economic benefits.” What’s more, it means that there’s additional pressure for DreamWorks Animation to succeed this year with The Croods and Turbo. Following the lower-than-expected box office for Rise Of The Guardians, “a disappointment by Croods sets in place a trend.” He notes that Croods is “tracking light” while “Turbo faces a tough competitive environment this summer.”
UPDATE, 11:16 AM: “Sizable” layoffs are coming. It’s just a matter of how many, and when. DreamWorks Animation may cut up to 500 employees in the next few months, sources tell Deadline. That’s potentially 23% of its 2200-strong animators, tech, and support staff, axed in the wake of a flop and key release date changes for Mr. Peabody And Sherman (moved off the 2013 calendar and into 2014) and Me & My Shadow (sent back into development). Those calendar shifts created a workload deficit for the studio, which will have to trim production staff as a result. Just last month, DreamWorks Animation made Fortune’s Best Companies To Work For list.
PREVIOUSLY, TUESDAY PM: On Tuesday, distributor Fox delayed DreamWorks Animation’s 3D pic Mr. Peabody and Sherman to spring 2014, reducing the company’s 2013 slate from three wide releases to two. At the same time, Me & My Shadow, an animation planned for 2014 featuring the voices of Kate Hudson, Josh Gad, and Bill Hader, was taken off the schedule altogether and reverted into development. “[We] are adjusting our operating infrastructure costs accordingly,” CEO Jeffrey Katzenberg said in a statement.
A snail that yearns for speed gets his wish in this DreamWorks Animation toon. David Soren directs Turbo, which is written by Darren Lemke, Robert D. Siegel and Soren. The impressive voice cast includes Ryan Reynolds, Paul Giamatti, Michael Pena, Luis Guzmán, Bill Hader, Richard Jenkins, Ken Jeong, …
OSCARS: Jeffrey Katzenberg On Jean Hersholt Humanitarian Award — “I Don’t Feel Like This Is My Award”
On Saturday night, four shiny new Oscars will be handed out at the fourth annual Governors Awards being held at The Ray Dolby Ballroom at Hollywood & Highland. Those receiving Honorary Oscars this year are legendary stuntman-director Hal Needham, documentary filmmaker D.A. Pennebaker, and producer and film champion George Stevens Jr. And receiving the prestigious Jean Hersholt Humanitarian Award that has gone in recent years to Jerry Lewis, Sherry Lansing and Oprah Winfrey is DreamWorks Animation head and philanthropist Jeffrey Katzenberg, who tells me he was “almost totally” surprised to be getting the honor.
Related: Academy Names 2012 Governors Awards
“There were two people who shall remain nameless who had said over the summer, ’Hey you know there’s a little bit of talk that maybe this is the right moment, the right time to acknowledge the work you’ve been doing’, but honest to God it didn’t register,” Katzenberg said. “I tried to be humble and gracious and say I appreciate it but no need. So when (Academy president) Hawk (Koch) called me, I had no idea they were meeting. I was floored. I get this urgent call at 10:30 PM from Hawk and I was genuinely taken by surprise.”
So what does it mean to him?
“I am gonna talk about it on Saturday night because I have had time to think about it like I hadn’t before”, he said. “What I really believe is in a way is this is a reflection back on our own community. The real fact is all I did was ask, and it’s Hollywood that has done the giving. I really feel I am receiving this on behalf of Hollywood and our community and the extraordinary generosity that we have for the real world that we live in. The Oscars are given out for great work in the fantasy world that is moviemaking. And the Hersholt Award is about the great work that is done in the real world that we actually all live in together. I don’t believe there is a more generous community than ours. I don’t really feel like this is my award. I don’t feel this is me. I feel this belongs to all of us together”.
DreamWorks Animation shares are down 3.1% to $17.49 in jumpy pre-market trading this morning after Rise Of The Guardians‘ $32.6M domestic box office for the five-day Thanksgiving holiday made it, in Janney Capital Markets’ Tony Wible’s words, “one of the most disappointing releases in the company’s history.” If the pre-market stock price holds, then DreamWorks Animation would be down nearly 24% from November 2 when it hit a 52-week high of $22.98 — partly driven by analysts’ optimistic expectations for Guardians. Wible expected to see $55M over Thanksgiving, slightly less than the consensus forecast among analysts for $58M. He now predicts it will generate $134M domestically (down from his earlier forecast for $225M) and $312M internationally (down from $338M). He also cut his earnings-per-share estimates for the company by 71% to 25 cents for 2012, and by 9% to 79 cents for 2013, although he maintained his “buy” recommendation based on DWA’s other initiatives. “Parent review sites noted several dark moments, which may have kept younger viewers away” from Guardians, he says. “However, we still struggle to understand why audiences rejected the film.”
Ever imagine riding in Santa’s sleigh instead of just waiting for a delivery? DreamWorks Animation’s Rise Of The Guardians, which opens November 21st, suggests it might be something like this: