DreamWorks Animation Signs Five-Year Distribution Deal With Fox

Starting in 2013 and going through 2017, features from DreamWorks Animation will be distributed by 20th Century Fox. DreamWorks has had a distribution deal with Paramount, which concludes at the end of this year, and Fox "will assume marketing and distribution responsibilities for both domestic and international for features released in 2013 through 2017."

Technically, this doesn't change anything for Fox, which has its own animation arm distributing films such as the Ice Age series and Rio, a sequel to which is in development. Fox also has the animated film Epic coming up in the next year. But if Fox continues to expand its own animated output, balancing that and the interests of DreakWorks could get tricky.

Part of the nuts and bolts of the deal is the revenue percentage earned by Fox as the distributor of DA films. Fox will earn 8% for theatrical and DVD sales (the same paid to Paramount) but a lower fee for digital distribution, including VOD and download sales. DreamWorks also retains rights to domestic TV distribution, says the LA Times. The first DreamWorks film to be distributed by Fox will be The Croods, in March 2013.

Read other details from the press release below.

GLENDALE, Calif., Aug. 20, 2012 /PRNewswire/ – DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today announced that the Company has entered into a new five-year distribution agreement with Twentieth Century Fox.

Under the terms of the agreement, Fox will assume certain marketing and distribution responsibilities in both domestic and international markets for all animated feature films produced by DreamWorks Animation for release in 2013 through 2017.

"Fox has long been an industry leader in both theatrical and home video thanks in large part to its well-integrated approach to distribution across a wide range of platforms around the globe," said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. "Jim Gianopulos and Tom Rothman have built a world-class distribution team and we are excited to apply their expertise, robust infrastructure and global resources so that DreamWorks Animation's films can reach their fullest possible potential over the next five years."

"DreamWorks Animation is a great company that makes terrific films and everyone here feels privileged and honored to have been chosen to distribute their marvelous work throughout the world," stated Fox Filmed Entertainment CEOs and Chairmen, Jim Gianopulos and Tom Rothman. "We are particularly excited to add DreamWorks Animation's films to the strong and growing slate of movies from our outstanding Blue Sky Studios division, which is coming off another global blockbuster with Ice Age: Continental Drift, and has EPIC and RIO 2 in advanced production. Together we will be a dominant force in animated entertainment for years to come."

"Starting in 2013, DreamWorks Animation content will be distributed in the more traditional markets under a fee structure that is similar to our existing arrangement with our current distributor," continued Katzenberg. "However, our new agreement with Fox presents more favorable economics overall for DreamWorks Animation because we are taking advantage of lower costs associated with the emerging digital distribution landscape and managing domestic television distribution in-house."

Under the terms of the agreement, Fox will receive a distribution fee on worldwide theatrical and home video gross receipts as well as on international television, and on certain digital businesses, including rentals, SVOD and EST. DreamWorks Animation will retain the rights to distribute its product in the domestic television windows without paying a fee to Fox.