DreamWorks Animation Cutting 500 Jobs; Dawn Taubin and Mark Zoradi Exiting

23 Jan 2015 | Author: | No comments yet »

‘Kung Fu Panda 3’ Gets Co-Production Status in China.

DreamWorks Animation SKG Inc. (DWA:US) tumbled as much as 14 percent after saying it will reduce production to two films a year and cut 500 jobs, including top officials, after several box-office flops.DreamWorks Animation’s Kung Fu Panda 3 has filed for, and received, much-sought-after co-production status in China, which guarantees greater access and a larger revenue share in the world’s second biggest film market.• Superhero casting news: “Glee’s” Michelle Benoist has been picked to play Supergirl in a new CBS series; “Game of Thrones'” Sophie Turner will play Jean Grey in the upcoming “X-Men: Apocalypse”; and Chiwetel Ejiofor is being talked about for a role opposite Benedict Cumberbatch in Marvel’s “Doctor Strange.” [THR, The Huffington Post, Variety] The maker of the “Shrek” movies will record expenses of at least $450 million for the restructuring and other steps outlined in a regulatory filing (DWA:US) Thursday.

The news comes on a difficult day for DreamWorks Animation’s stock, which was falling after the company announced layoffs and a smaller release slate late Thursday. According to the State General Administration of Press, Publication, Radio, Film and Television (SAPPRFT) website, Dreamworks Animation, its Chinese unit Oriental Dreamworks and their Chinese partners, which include China Media Capital, Shanghai Media Group and Shanghai Alliance, filed and received co-production status for the threequel on Jan. 15. The cash drain led analysts to question whether DreamWorks Animation has enough money to cover the expenses and fund movie production, with the company insisting it does.

Overseas filmmakers want China co-production status because films granted the status are treated as domestic films and do not fall under China’s notorious import quota, and films granted co-production status usually involve local investment in exchange for local distribution rights. They also stand a much stronger chance of getting a mainland Chinese release, have immunity from blackout periods and will receive a larger (43 percent) share of revenue.

DreamWorks Animation fell 9.2 percent to $19.35 at 10:08 a.m., after earlier dropping to $18.30 for the biggest intraday decline in more than two months. Some movies, such as 2013’s biggest selling overseas title Iron Man 3 lobbied hard for co-production status but did not get it, and the issue often has proven divisive as both Hollywood and China try to co-operate more. About $200 million represents films that will be written down, such as “Monkeys of Mumbai.” DreamWorks Animation also shelved plans for “B.O.O.: Bureau of Otherworldly Operations” and said it will release just one feature film this year: “Home.” Most of the restructuring cost will be recorded in year-end results for 2014, the company said.

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