Author: Ryan Ball

When Disney announced plans to acquire digital animation juggernaut Pixar, the studio also mentioned that it will be closing Circle 7, the CG facility it was building to produce its own sequels to Toy Story, Finding Nemo and other Pixar favorites. Now the Los Angeles Times reports that the Mouse House has officially closed the shop and dropped the axe on 32 employees.

The job cuts will be effective on May 26, but Disney says it will help laid-off employees find new work. The unit’s remaining 136 will apparently transition into roles at Walt Disney Feature Animation to work on such upcoming productions as Meet the Robinsons, Rapunzel: Unbraided and American Dog. Disney’s plans for Circle 7 head Andrew Millstein are not known at this time.

Former Disney CEO Michael Eisner set up Circle 7 (which got the nickname Pixaren’t) in Glendale when Pixar was looking elsewhere for a distribution partner. Since Disney owns rights to all of the Pixar productions, the studio was prepared to crank out sequels without the participation of Pixar CEO Steve Jobs and creative force John Lasseter.

Under the $7.4 billion acquisition deal, Disney has put its animation operation in the hands of Jobs, Lasseter and Pixar president Ed Catmull. Lasseter directed Cars, the seventh Disney/Pixar collaboration, which opens in theaters on June 9.

Warner Bros.’ vfx-laden, action-packed allegory, V for Vendetta, emerged triumphant at the North American box office over the weekend. Written and exec produced by The Matrix trilogy creators the Wachowski Brothers, the film took in an estimated $26 million to snatch the top spot from last week’s top debut, Paramount’s romantic comedy Failure to Launch.

V for Vendetta is directed by James McTeigue and based on a graphic novel written by Alan Moore and illustrated by David Lloyd. The film stars Natalie Portman as a young rebel fighting for freedom in an totalitarian London when she teams up with a masked terrorist who goes by the name of V (Hugo Weaving). The effects are provided by Double Negative under visual effects supervisor Richard Brisco.

Failure to Launch has begun its descent, slipping to No. 2 with around $15.8 million in its second week. Fueled by the appeal of stars Sarah Jessica Parker and Matthew McConaughey, the successful mission has generated nearly $50 million and should continue to draw a strong female audience in a frame dominated by movies for young males and kids.

Disney’s remake of The Shaggy Dog moves down to No. 3 with an additional $13.6 million, bringing its two-week take to more than $35 million. Meanwhile, DreamWorks’ Shakespeare-inspired, gender-bending tween comedy, She’s the Man, debuted in fourth place with around $11 million.

Rounding out this week’s top five performers is FoxSearchlight’s remake of the Wes Craven horror classic The Hills Have Eyes. The latest in a string of low-budget fright fests making tidy profits, the $15 million update has scared up more than $28 million since opening last week.

On the animation front, Universal’s big screen adaptation of children’s book favorite Curious George held onto the No. 11 spot in week 6 with an estimated $1.7 million. Made for around $50 million, the 2D toon has earned more than $55 million domestically so far and promises to be a kid favorite on home video. The monkey movie will get some competition for family audiences this weekend when Fox Animation/Blue Sky’s Ice Age 2: The Meltdown opens nationwide.

Fans of traditional animation got a glimmer of hope today as The Walt Disney Co. today held it’s annual shareholder meeting, which was focused in part on the pending acquisition of Emeryville, Calif. animation powerhouse Pixar. The meeting started with thunderous applause as Roy E. Disney was reintroduced as a member of the board, and as CEO Robert Iger trumpeted the reclamation of Oswald the Lucky Rabbit, a character Walt Disney created in 1927, before Mickey Mouse. Iger said getting the cartoon denizen back from rights holder NBC/Universal was exemplary of the company’s commitment to classic properties and honoring the heritage of Walt Disney.

‘To build up on the legacy of Walt Disney and to achieve the full potential of the company that bears his name, we have made animation our top priority,’ said Iger. ‘And we affirmed that the art of Disney animation is incredibly important when we made a decision to acquire Pixar Animation Studios.’

Iger eventually handed the podium over to Pixar creative head John Lasseter, who will become chief creative officer of Disney’s animation studios, as well as principal creative advisor at Walt Disney Imagineering. ‘All I ever wanted to do was be an animator,’ Lasseter stated. ‘All I ever wanted to do was work for Disney.’ He went on to note how his career with Disney has come full circle since he got his start as a ride operator at Disneyland’s Jungle Cruise attraction. In his new post, he will be involved in the design of new theme park attractions, and said the unit will focus on creating more new rides based on animated properties and getting them up and running while the films are still hot.

Recalling the ongoing, highly publicized negotiations, Lasseter commented, ‘When Bob Iger came to the three of us [(Ed Catmul, Steve Jobs and myself]) and said, ‘We’re interested in acquiring you,’ I was worried because we have built this incredibly wonderful culture at Pixar that’s about creativity and quality, and everyone there, 850 of us, believe in that single thing. So I was worried, until I got to know Bob Iger. Ladies and gentlemen, you are led by a great man. He’s amazing. And that’s why Pixar joined up with Disney.”

Lasseter didn’t address speculation that he will attempt to bring hand-drawn feature animation back into the Disney fold. Instead, he speculated that Walt Disney would have loved 3D animation and used the opportunity to hype the latest Pixar film, Cars, which opens on June 9. He also treated shareholders to a world premiere screening of the trailer for Ratatouille, the company’s eighth CG feature. Brad Bird, director of The Iron Giant and The Incrediles, is directing the film, which is slated for release in the summer of 2007. ‘You’ve never seen anything like this,’ Lasseter said enthusiastically.

Iger later fielded a question from a shareholder who asked if 2D would be employed for Disney’s Rapunzel: Unbraided, which is being directed by master traditional animator Glen Keane (supervising animator on Beauty and the Beast, Tarzan, and Treasure Planet). According to Iger, the film will be made with a revolutionary process, which Kean helped develop, that will allow the animators to draw by hand and have their drawings translated to computer models. Iger also prattled off the clich’ line about technology taking a back seat to good storytelling, but drew a round of applause by adding, ‘If we find that we have great characters and stories and believable worlds, and that it can be depicted in 2D animation, that’s also fine with us. It’s an art from that’s eternal in many respects and shouldn’t be ignored.’

Disney earnings are up double digits, driven mostly by the success of media networks such as ABC, ESPN and Disney Channel. But while Touchtone Television productions have yielded solid gains and are expected to contribute more than $1 billion in operating profits, Disney’s studio efforts are suffering from weak box office and home video performance. The company is hoping to turn the theatrical business around with the two upcoming Pirates of the Caribbean sequels, as well as new product from Pixar.

‘The combination of Pixar and animation represents a fundamental investment in Disney’s creative vibrancy in the future,’ noted Walt Disney Co. CFO Thomas Staggs. ‘We expect the transaction will actually dampen earnings per share for the next couple of years. However, we believe that the combination will add to our earnings after that, and it will extend our ability to develop properties that truly set Disney apart, while adding value across virtually all of our businesses.’

Staggs said that video games spending will also put pressure on near-term results, but it’s an investment the company is happy to make. ‘We believe this business provides us with and excellent opportunity to further leverage our characters, stories and creative strengths in an attractive and growing market.’

A re-play of the Walt Disney Co.’s annual shareholder meeting webcast will be provided through Friday, March 24, at www.disney.com/investors.

Despite having one of the best-selling home video titles of 2005 with Madagascar and winning the Oscar with Wallace & Gromit: The Curse of the Were-Rabbit, DreamWorks Animation SKG reports that net income for the fourth quarter is only a third of what it earned for the same quarter last year. This company netted $63.2 million this round, compared to $192 million for the fourth quarter of 2004. Yearly income was also way down from $333 million in 2004 to $104 million in 2005.

DreamWorks Animation’s fourth quarter profits came mostly from home video sales of Madagascar, its latest CG-animated comic adventure movie, which accounted for approximately $152.3 million of the company’s $172.9 million gross.

“Together with our early 2005 release of Shark Tale, which according to industry sources finished in the top-four domestic selling home video titles of the year, our CG films remain among the leading products in this highly competitive home video market,” comments DreamWorks Animation CEO Jeffrey Katzenberg.

Clay didn’t quite pay off as well as pixels as DreamWorks took a $25 million write-off for Wallace & Gromit: The Curse of the Were-Rabbit, which was a big hit overseas but failed to make a splash at U.S. theaters and retail outlets.

“Despite achieving critical acclaim, commercially Wallace & Gromit: The Curse of the Were-Rabbit did not perform as well as expected in a highly competitive release period,” says Katzenberg. “While we remain cautious with the state of the overall home video market, we believe that this result was primarily a title-specific issue for a film that did not achieve the level of consumer awareness that we had hoped.”

The studio was also able to write off the abandoned productions Tortoise and the Hare and Tusker. Both films were written off for book purposes in 2003, but since DreamWorks Animation plans to abandon the rights to these films in 2006, it receives the tax benefit or this past quarter. This has resulted in a net income increase of approximately $28 million.

DreamWorks Animation expects revenues in 2006 to be driven by its next film, Over the Hedge, which will roll out in North America on May 19. While the company s hoping for a strong box-office performance, execs are looking at the possibility that the majority of the toon studio’s earnings for 2006 will come from the film’s home video sales. DreamWorks will also release the CG Aardman pic, Flushed Away, in November of 266, but doesn’t expect to see and revenue from the film until 2007.

Costs for 2006 will be negatively affected by the start of DreamWorks Animation’s new distribution pact with Paramount Pictures, which kicks off with Over the Hedge. DreamWorks Animation will be taking over several corporate functions previously provided by DreamWorks Studios, and will have to compensate new members of its senior management team. This will likely increase the company’s selling, general and administrative expenses by approximately 15% over the $76.5 million reported for 2005. These incremental expenses, however, will in part be offset by predetermined reimbursements from Paramount during periods when DreamWorks Animation is delivering new films.

Sony Pictures Animation’s flagship CG project, Open Season, is slated to get a day-and-date IMAX 3D release as it rolls into conventional theaters on Sept. 29. The animal comedy will be digitally converted to 3D and re-mastered via the patented IMAX DMR (Digital Re-mastering) technology. Sony Pictures Releasing will be the exclusive distributor to IMAX theatres worldwide.

Based on the humor of In the Bleachers cartoonist Steve Moore, Open Season follows a couple of unlikely forest friends as they rally all the other animals to turn the tables on unsuspecting hunters. Martin Lawrence lends his voice to a 900 lb. domesticated grizzly bear named Boog, while Ashton Kutcher plays a scrawny mule deer named Elliot. Debra Messing joins the voice cast as a forest ranger who raised Boog from a cub and Gary Sinise is a seasoned hunter who is in pursuit of the unlikely critter duo. Moore will serve as exec. producer along with John Carls.

Open Season is being helmed by The Lion King director Roger Allers, along with Jill Culton, whose credits include Toy Story 2 and Monsters Inc., and Anthony Stacchi, who counts ANTZ among his various credits.

Sony Pictures Entertainment and IMAX previously teamed up for the 2004 release of Spider-Man 2: The IMAX Experience, and Open Season is one of four IMAX 3D titles scheduled for release in 2006. Partnerng with IMAX has certainly paid off for competing studio Warner Bros., whose 3D version of the animated Polar Express has pulled more than $60 million in IMAX venues alone. Warner Bros.’ next CG feature, Happy Feet, will get a day-and-date IMAX 3D release on Nov. 17, 2006.

Established in may of 2002, Sony Pictures Animation is also currently in production on its second feature, the penguin surfing movie Surf’s Up!, for release in the summer of 2007.