Battered by the box-office failure of “Flushed Away,” DreamWorks Animation SKG Inc. said Tuesday that it had formally severed ties with the movie’s British maker, Aardman Animations.
The Glendale studio had been expected to end its relationship after the film flopped, resulting in a pending write-down that some analysts said would be as much as $105 million to $115 million. In addition, DreamWorks’ fast production pace and aggressive marketing never meshed with Aardman’s European, laid-back approach to moviemaking.
“While I will always be a fan and an admirer of Aardman’s work, our different business goals no longer support each other,” DreamWorks Chief Executive Jeffrey Katzenberg said in a statement.
Aardman’s dry British wit went over well with critics on such films as “Chicken Run” in 2000 and 2005’s “Wallace & Gromit: The Curse of the Were-Rabbit,” which won an Oscar for best animated feature.
But both “Wallace & Gromit” and “Flushed Away” were costly misfires, failing to resonate with American audiences. DreamWorks reported a $25-million loss on “Wallace & Gromit.”
Aardman co-owners Peter Lord and David Sproxton said they had enjoyed their partnership but that “our ambitions have moved apart, and it feels like the right time to move on.”
DreamWorks has had a rocky time since going public in October 2004. Despite the lucrative “Shrek” franchise and the 2005 hit “Madagascar,” investors have battered the company’s stock amid the Aardman disappointments and a shortfall in DVD sale projections.
The company hopes the release of “Shrek the Third” in May will boost its fortunes. Merrill Lynch & Co. analyst Jessica Reif Cohen noted in a recent report that this year looked to be strong with the “Shrek” film and comedian Jerry Seinfeld’s “Bee Movie” in the fall.
But analyst Lowell Singer of Cowen & Co. recently wrote, “While we think [DreamWorks Animation] shares will continue to be buoyed by the impending release of “Shrek the Third,” we remain concerned about the long-term average earnings power of [DreamWorks Animation] films.”