Will Dreamworks Animation Lose Paramount As A Distributor?

Jeffrey Katzenberg, Chief Executive at Dreamworks Animation, currently pays out 8% of Dreamworks Animation’s film revenues to Paramount Pictures, who act as the sole distributor of their films. Katzenberg’s 8% deal has just been extended through 2013, but Paramount is demanding a higher percentage of revenue after the end of the fiscal year. In the most ostensible opposition is Katzenberg himself who seeks to lower that amount. It seems that post-2013, DWA (Dreamworks Animation) is set to be up for grabs, but at what cost?

As noted in their recent press release, the studio is currently developing their own animation department. Chairman Brad Grey at Paramount should tip his hat to Rango, the studio’s most recent release. Though only a modest hit domestically, it has not only met its budget but also exceeded it. No word as to whether or not there will be a sequel, but if there is, it would likely be produced through their pending animation department.

The L.A. Times reports that Chief Executive Jeff Bewkes at Time Warner, the company purported as most likely to purchase distributing rights should Paramount part ways, has been quoted as saying that he will not overpay to bat away the competition. Does this spell a gloomy future for Katzenberg’s Dreamworks Animation?

While it’s too soon to tell, it doesn’t seem likely that Dreamworks’ will end off in a bad position. The studio is an absolute powerhouse in the animation department, exceeded only in quality by Pixar Studios. I can’t imagine Dreamworks not finding a new distributor. Can you?

What do you feel looms in Dreamworks Animation’s future?