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NEW YORK – Viacom CEO Philippe Dauman said Friday that his company’s Paramount Pictures studio is “proceeding under the assumption” that its distribution deal with DreamWorks Animation will end next year, but said that he has a “very good, strong” relationship with DWA CEO Jeffrey Katzenberg.
While the relationship between Brad Grey at Paramount and Katzenberg has been known to be rocky, Dauman said on an earnings conference call that the studios have had a good working relationship. Instead, decisions about the future simply come down to whether the two companies’ strategic objectives align or not, he argued.
Dauman didn’t address DWA’s recent rejection of Paramount’s offer to continue distributing the animation studio’s releases for another year after their current agreement expires next year.
Instead, Dauman repeated that DWA has said publicly that it won’t address the Paramount deal until next year. While Viacom is “happy to be in business with them,” the conglomerate’s studio is moving ahead with the process of greenlighting and slotting 2013 releases rather than waiting for DWA, Dauman reiterated a previous comment. “Paramount will do just fine under any scenario,” and so will DWA, he said.
Importantly, he didn’t make any comments that would rule out a continuation of the partnership. Some observers have suggested that if DWA doesn’t find an alternative option, it may decide to continue the Paramount relationship – potentially even on less favorable financial terms.
Dauman said he feels that the DWA-Paramount issue has attracted a “surprising amount of attention” and mentioned that the two also work together in other areas, such as TV programming for Nickelodeon. Overall, their work relationship will “continue in one form or another,” he said.
Asked if the cost of advertising for DWA release is too high, which may delay their profitability, Dauman said there has been no tension with the DWA CEO about advertising spending. He argued that advertising does work and drives success in the film business.
“We have done a great job promoting DWA releases,” he concluded.
Discussing the recent launch of a Paramount’s animated film arm, Dauman said “the timing is ripe for this move.” He cited the company’s reinvigorated studio and “abundant creative vigor,” highlighting that the first animated release is expected in 2014 with budgets for the one animation film per year of up to $100 million.
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