Disney, DreamWorks set long-term distribution deal
LOS ANGELES (Reuters) - Walt Disney Studios confirmed that it had entered a long-term, exclusive film distribution agreement with DreamWorks Studios principals Steven Spielberg and Stacey Snider.
Disney said in a statement on Monday that it would distribute and market about six live-action films per year for DreamWorks as part of Spielberg and Snider's partnership with Reliance BIG Entertainment.
The company will release the DreamWorks movies under its adult-oriented Touchstone Pictures banner. The first such title is set to hit theaters in 2010.
Disney Studios posted double-digit percentage declines in revenue and operating profit last quarter due to global economic woes and difficult comparisons with year-earlier blockbusters "Pirates of the Caribbean: At World's End" and "Ratatouille."
Disney Studios Chairman Dick Cook told Reuters that the DreamWorks films represented "another series of arrows in our quiver that can only make us stronger and better."
Although Disney Studios cut a quarter of its staff and about half its film slate in 2006, the company will have to hire new workers to service the DreamWorks contract, Cook said.
"We will sit down and be putting together where we need to add personnel," he said.
Cook described the DreamWorks slate as "complimentary" to Disney's mainly family-focused, big budget fare, but added that DreamWorks would make "all kinds of different movies in all different genres and price points."
DreamWorks Studios will remain at its current quarters on the Universal Studios lot, he said.
Cook also refuted as "erroneous" and "ridiculous" reports that Disney was looking to sell its Miramax film production unit, which is known for making art-house critical favorites like the Oscar-winning "Shakespeare In Love."
The Wall Street Journal reported on Sunday that Disney would receive a distribution fee of at least 8 percent of the DreamWorks films box-office grosses. Disney also was likely to provide a loan or line of credit of up to $150 million to DreamWorks as part of the deal, the paper said.
Cook declined to discuss specific points of the deal, but said: "The ideas are right (in the Journal report); the numbers are wrong."
Spielberg and Snider formed a new studio last year with financing from Reliance BIG, which is part of the Reliance Anil Dhirubhai Ambani Group, after leaving Paramount Pictures.
Disney Studios is a unit of the Walt Disney Co. DreamWorks SKG is privately held.
(Reporting by Gina Keating; Editing by Lisa Von Ahn)