In a Securities and Exchange Commission filing this month, DreamWorks Animation acknowledged much is riding on whether its new movie — makes a splash.

"If 'Shark Tale' fails to achieve domestic box-office success,", "its international box-office and home video success will be in doubt and our … financial condition could be adversely affected in 2005 and beyond."

If "Shark Tale" were able to perform anywhere near the level of the "Shrek" franchise,
"Shrek 2," grossing $873 million, then potential investors in the Animation IPO will feel more comfortable.

DreamWorks Animation already suffers from inevitable comparisons with rival Pixar Animation Studios, that is five for five in animated hits that include "Toy Story," "Monsters, Inc." and "Finding Nemo."

"You look at Pixar — they bat a thousand," "Pixar has set the bar extremely high for Dreamworks."

"Shark Tale" is drawing decidedly mixed reviews, despite DreamWorks spending tens of million of dollars marketing the film aggressively around the world, with some critics contending that the film simply tried too hard to be funny.

"Shark Tale" represents the future for DreamWorks Animation, which has struggled to find the acceptance that Pixar enjoys.

DreamWorks' earlier hand-drawn efforts, such as last year's "Sinbad: Legend of the Seven Seas," flopped, grossing only $27 million in domestic box office and prompting DreamWorks to abandon the traditional animation style altogether.

The studio also went through another strategic shift, moving away from dramatic stories such as "The Prince of Egypt" and "Spirit: Stallion of the Cimarron" to comedies with the broad audience appeal of "Shrek." Two hand-drawn films already in the works, "Tortoise v. Hare," and "Tusker," were scrapped.

Spielberg,  I've got my Mojo and Evil Eye hard at work!! :)

The success of DreamWorks' upcoming animation studio spinoff hinges in part on how 'Shark Tale' fares

Los Angeles Times
By Lorenza Muñoz,
Times Staff Writer
October 1, 2004

Fresh off its blockbuster "Shrek 2," DreamWorks today will play to a whole new audience: Wall Street investors anxious to see whether its new film "Shark Tale" sinks or swims.

The computer-animated movie about a vegetarian shark and a fast-talking wrasse opens in theaters just as DreamWorks is poised to spin off its computer animation unit.

Although DreamWorks hit pay dirt with two "Shrek" films, the initial public stock offering has the studio under pressure to show it's no one-trick pony — or, in its case, donkey.

In a Securities and Exchange Commission filing this month, DreamWorks Animation acknowledged much is riding on whether its new movie — featuring the voices of Will Smith, Jack Black, Renee Zellweger, Robert De Niro and Angelina Jolie — makes a splash.

"If 'Shark Tale' fails to achieve domestic box-office success," the document says, "its international box-office and home video success will be in doubt and our … financial condition could be adversely affected in 2005 and beyond."

Although some of that passage reflects the boilerplate language of an SEC filing, it nonetheless underscores the stakes involved. The 10-year-old Glendale studio founded by moguls Jeffrey Katzenberg, Steven Spielberg and David Geffen is expected to raise as much as $650 million in the spinoff, now expected in late October. A successful offering also is a crucial step if billionaire Paul Allen is to eventually cash out as an investment partner.

Studio spokesman Andy Spahn declined to comment, citing SEC rules restricting companies from publicly discussing upcoming stock offerings.

Computer animation is one of the most competitive arenas in the entertainment industry; the public has shown a clear preference for its brilliant graphics over traditional hand-drawn animation. A digitally animated film typically takes three to four years to complete and costs more than $100 million.

DreamWorks Animation already suffers from inevitable comparisons among investors with rival Pixar Animation Studios. The publicly traded Emeryville, Calif., company is five for five in animated hits that include "Toy Story," "Monsters, Inc." and "Finding Nemo."

"You look at Pixar — they bat a thousand," said Tom Taulli, co-founder of Currentofferings.com, an IPO research firm based in Orange County. "Pixar has set the bar extremely high for a company like this."

But media analyst Anthony Valencia of major Pixar shareholder TCW Group said DreamWorks was hardly out of the game. Valencia said that if "Shark Tale" were able to perform anywhere near the level of the "Shrek" franchise, "then that will make investors feel that it is not a hit-or-miss or luck-type situation."

That, though, is a tall order. To date, "Shrek 2," starring Mike Myers as the cranky green ogre and Eddie Murphy as sidekick Donkey, has grossed $873 million worldwide and surpassed "Nemo" as the most successful animated film of all time.

Thanks largely to the film's success, DreamWorks Animation reported revenue of $119.4 million in the six months ended June 30, reversing a $115.5-million loss in the same period of 2003, according to SEC filings.

Huge sums are expected to flow into the company when "Shrek 2" is released on DVD in November.

Unlike the near-unanimous praise from critics for the "Shrek" films, however,
"Shark Tale" is drawing decidedly mixed reviews, with some critics contending that the film simply tried too hard to be funny.

DreamWorks has spent tens of million of dollars marketing the film aggressively around the world. In May, the world's press was invited to an afternoon publicity stunt at the Cannes Film Festival, where actors Jolie, Smith and Black rode around the bay of Cannes in an inflatable shark.

At the Venice Film Festival, 6,000 people watched the film on a 100-foot inflatable screen in the city's historic St. Mark's Square. Promotional partnerships include a "Kelpy Kreme" doughnut from Krispy Kreme, and "Oceans of Action" toys at Burger King.

"Shark Tale" represents the future for DreamWorks Animation, which has struggled to find the kind of clear identity and brand recognition that Pixar enjoys.

Once it is detached from its former parent, DreamWorks Animation will be led by former Disney studio chief Katzenberg. Its live-action DreamWorks sister will handle the marketing and distribution of its films.

DreamWorks' earlier hand-drawn efforts, such as last year's "Sinbad: Legend of the Seven Seas," flopped, grossing only $27 million in domestic box office and prompting DreamWorks to abandon the traditional animation style altogether.

The studio also went through another strategic shift, moving away from dramatic stories such as "The Prince of Egypt" and "Spirit: Stallion of the Cimarron" to comedies with the broad audience appeal of "Shrek." Two hand-drawn films already in the works, "Tortoise v. Hare," and "Tusker," were scrapped.

DreamWorks this year also branched out into television, introducing the first-ever computer animated television series, "Father of the Pride," a prime-time comedy about Siegfried & Roy lions in Las Vegas. Although not a breakout hit, the NBC show is drawing coveted younger viewers.

Next year the studio plans to release "Madagascar," a comedy about zoo animals shipwrecked on an island. DreamWorks also will release "Wallace & Gromit: Tale of the Were Rabbit," from the creators of the 2000 hit "Chicken Run." The 2006 slate includes three films, including "Shrek 3."

Investors would like to see more hits approaching the success of "Shrek."

David Davis, president of David Davis Inc., an entertainment consulting firm, believes that "Shark Tale" will be profitable when DVD sales and television receipts are tallied.

The question, he said, is whether it can navigate the treacherous box-office waters to become as big a success as DreamWorks hopes.

"It's important that ["Shark Tale"] opens strong," he said. "More important is that DreamWorks has the ability to make summer blockbusters like 'Shrek.' "

Trolling for Investors
http://www.latimes.com/business/
la-fi-dreamworks1oct01.story