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

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] DreamWorks will cut about 500 jobs, more than a fifth of its workforce, and produce one fewer movie a year as part of a major restructuring after a string of box-office misses. 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. The Hollywood studio, which held unsuccessful buyout talks twice last year, said it plans to produce two feature films per year, down from three, and close its Northern California studio. “We believe that our efforts to make three films each and every year was just too ambitious and has led to inconsistent performance,” chief executive Jeffrey Katzenberg said. 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.

DreamWorks has faced increasing competition for family audiences as other studios have turned out hit animated films, such as the Despicable Me franchise from Universal Pictures and The Lego Movie from Warner Bros. 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. Three of the six movies DreamWorks plans to release over 2016 to 2018, are sequels, which require less advertisement costs and almost guarantee strong ticket sales. 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. DreamWorks has worked to diversify its business in recent years, making a deal to supply more than 300 hours of programming for Netflix and purchasing YouTube network AwesomenessTV. The company, which had about 2,200 employees as of 2013, said the 500 job cuts will span all divisions of the studio. vice-chairman Lewis Coleman and COO Mark Zoradi will leave, the company said.

DreamWorks expects to complete most of the restructuring by the end of 2015, helping it save $30 million in pre-tax costs this year and about $60 million by 2017. On Jan. 4, the company named veteran producers Bonnie Arnold and Mireille Soria to lead feature animation. “We were top heavy and given this, we are really right-sizing the entire operation here and focusing the company into the businesses that we’re in today rather than businesses that we might imagine we might be in,” Katzenberg said. “This is the right thing for the company today.” In addition to the studio restructuring, DreamWorks Animation also plans at least $160 million in additional expenses.

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