DreamWorks Animation ends deal with 'Flushed Away' creators

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 writedown 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 writedown, 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 said in a statement it would announce its new production and distribution plans shortly.

"Flushed Away," which chronicles the adventures of a pampered rat who is 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 writedown 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 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.