Par, Daewoo explore Korea theme park

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NEW YORK -- The licensing unit of Viacom Inc.'s Paramount Pictures unit has struck a deal with car distributor Daewoo Motor Sales to explore the development of a theme park in South Korea based on films and characters in the Paramount library, the companies said Thursday.

The news came as Viacom reported a 36% decline in its first-quarter profit due to higher film marketing expenses and a restructuring charge at its MTV Networks cable networks unit. The bottom-line figure exceeded Wall Street estimates though and.

In an earnings conference call, Viacom president and CEO Philippe Dauman emphasized that the Daewoo agreement is structured as a licensing deal with the entertainment powerhouse "not putting up any money" for the park. It will, however, get licensing fees for opening up its film library for Daewoo to develop the park and for helping in that endeavor.

Dauman said this is one of "many ways" that the Viacom film unit is looking at to boost its margins and create new revenue streams. Among others are a "more robust" made-for-DVD business and production for cable TV, he added.

Under the agreement, Daewoo Motor Sales must raise the funding for the park, estimated at $800 million, and develop it. Its location is Incheon, about a one-hour drive from capital Seoul. The park is expected to entertain more than five million visitors annually.

"We are thrilled to be involved in the development of South Korea's first international movie studio theme park," said Michael Bartok, executive vp of Paramount Licensing. "This new development will significantly add to South Korea's already growing tourism sector and complement all of the world-class developments in the rapidly growing Incheon region."

Viacom reported a first-quarter profit of $202.9 million, down from $317.2 million in the year-ago period. The figure for the latest quarter included a $35 million charge for the MTV restructuring. Revenue rose 16% to $2.75 billion.

Viacom's film operatings, which include Paramount and DreamWorks, saw profit being dragged down by the promotional costs for box office successes "Blades of Glory," which opened at the end of the quarter, and "Disturbia," which hit theaters just after the end of the period.
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