It looks like Santa, the Easter Bunny and the Tooth Fairy weren’t that nice to DreamWorks this year. The animation studio will take an $87 million write-down on its 2012 box-office misfire Rise of the Guardians, it was announced today. This marks the largest write-down the studio has taken for one of its projects. In 2007, DreamWorks took a $109 million write-down for Flushed Away.
The Thanksgiving release cost about $145 million to make and has made over $302 million in the global box office—but it hasn’t performed as well as the studio’s previous blockbusters such as Shrek, Kung Fu Panda and Madagascar 3.
“While Rise of the Guardians did not achieve the level of box-office success that we have come to expect from a DreamWorks Animation film, we have made several changes to our future slate that we believe will position us well for the next two years,” said Jeffrey Katzenberg, chief executive of DreamWorks Animation. “We are now looking ahead to our next release—and our first under our new distribution agreement with 20th Century Fox—The Croods on March 22, 2013.”
DreamWorks took a fourth-quarter charge of $54 million related to the company’s decision to return Me & My Shadow back to development, a write-off of a number of other development projects in the amount of $20 million and a charge of $4.6 million related to restructuring activities. As previously reported, the studio plans to lay off up to 20% of its workforce. DreamWorks shifted the release date for its movie Mr. Peabody & Sherman from Nov. 1 to March 7, 2014. The company reported a net loss of $82.7 million, or $.98 cents a share, in the fourth quarter, on revenues of $264.7 million. For the year, DreamWorks reported total revenue of $749.8 million and a net loss of $36.4 million.
In an interview with The Hollywood Reporter, Katzenberg confirmed the pending layoffs. “These things are very, very difficult to do,” he said. “I would say it’s the hardest thing I’ve had to do since we started DreamWorks. We’ve never had to lay anybody off. It was against our culture. But it’s the right thing for us today and it makes DWA strong going forward.”
“It’s been very hard,” he added. “We had 17 hits in a row and this (Rise of the Guardians ) is the first one that didn’t work for us. So it makes you go back and rethink everything, not just the fact that it didn’t work – certainly we spent a lot of time reflecting on that – but more importantly, saying, ‘let’s look at everything and say, what could we be doing better, smarter, more effectively to really position the company in the best possible way gong forward? And that’s what we’ve done, and that’s what restructuring is all about.”
Well there goes my hopes for seeing Flushed Away on Blu-ray anytime soon; I actually really liked that film but it looks like it’s the black sheep of the DreamWorks canon.
I wonder how The Croods will fare when released? I can’t say that I find the previews that appealing, but who knows. Maybe DreamWorks should try to stop pumping these films out as fast as they can. The market is already saturated with animated films in general, let alone the multiple DreamWorks releases each year.
I had trouble seeing the appeal of “Guardians” when I first saw the trailers. My 11-year-odl son wanted to check it out. We went and we both found it rather boring. Visually, it’s outstanding, but the story just doesn’t work. (Overload of magic, maybe? I don’t know.) Michael Woody, I agree with you. I don’t see “The Croods” faring a lot better than “Guardians,” other than perhaps the fact that there’s no family movie competition right now. DW needs to release 1-2 good movies instead of bucket-loads of these and hoping they stick.
Blame on Katzenberg for saying that there won’t be any sequels to Megamind and Monster vs. Aliens and possibly Rise of the Guardians.
I don’t see why this failed at the box office. Everyone I talked to who saw it thought it was awesome. I for one thought it was way more appealing than the string of sequels they’ve come out with over the last few years.