DreamWorks ends deal with ‘Flushed’ creators

updated 5:10 p.m. ET Jan. 30, 2007

LOS ANGELES - DreamWorks Animation SKG Inc. said Tuesday it had ended an exclusive production arrangement with the British maker of the award-winning claymation series “Wallace & Gromit,” which won critical acclaim but failed at the box office.

The decision regarding Aardman Animations came after DreamWorks said last year it would take a write-down in the fourth quarter to account for losses from the latest Aardman film, the computer-animated “Flushed Away.”

DreamWorks has not revealed the size of the write-down, but analysts have suggested it could be more than $100 million.

“While I will always be a fan and an admirer of Aardman’s work, our different business goals no longer support each other,” DreamWorks Animation chief executive Jeffrey Katzenberg said in a statement.

Aardman spokesman Arthur Sheriff said the split was amicable and the company was continuing to develop both computer-animated and stop-action projects. It intends to announce new distribution plans soon.

“We’re extremely optimistic about our future,” Sheriff said.

“Flushed Away,” which chronicles the adventures of a pampered rodent flushed into a world of tough sewer rats, cost DreamWorks $142.9 million and took in about $50 million at the box office.

The Glendale-based company also took a write-down on the previous Aardman film, “Wallace & Gromit in the Curse of the Were-Rabbit,” which won the Oscar for best animated film of 2005.

DreamWorks Animation began exclusive distribution of Aardman films in 1999. The companies entered into a five-picture deal that allowed DreamWorks to opt out after the second film, “Flushed Away,” was delivered.

The companies also collaborated in the 2000 stop-action animated movie “Chicken Run.”

DreamWorks had previously announced production of the third collaboration with Aardman, “Crood Awakening,” co-written by John Cleese.

DreamWorks is poised for box office success this year with the third installment in its popular “Shrek” series, plus a film written by comedian Jerry Seinfeld.

DreamWorks Animation led the pack at this year’s Annie Awards nominations for film, television and home video animation, garnering 17 nods for two features, “Flushed Away” and “Over the Hedge.”

The awards will be announced Feb. 11.

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