GLENDALE, Calif., Aug. 20 (UPI) -- The U.S. animator behind the "Shrek," "Madagascar" and "Kung Fu Panda" franchises signed a deal with 20th Century Fox to distribute its movies, it said Monday.
The five-year deal between DreamWorks Animation SKG Inc. and Fox replaces the partnership DreamWorks has had with Paramount Pictures Corp. since 2006, DreamWorks said.
The DreamWorks-Paramount relationship started souring last year after DreamWorks Chief Executive Officer Jeffrey Katzenberg sought to pay a lower fee and Paramount Chairman Brad Grey formed a competitive animation unit at his studio, the Los Angeles Times reported.
Under the new agreement, DreamWorks will pay 8 percent of revenue from box-office and DVD sales to Fox, the same as it paid to Paramount. Katzenberg had told his company's shareholders he would seek a lower fee in a new distribution deal, the Times said.
But the new deal "presents more favorable economics overall for DreamWorks Animation because we are taking advantage of lower costs associated with the emerging digital distribution landscape and managing domestic television distribution in-house," Katzenberg said in a statement.
Digital distribution includes video-on-demand and download-to-own. DreamWorks has shared revenue from domestic TV distribution with Paramount.
A complicating factor in the new partnership is Fox's own animation unit, Blue Sky Studios, best known for the "Ice Age" franchise, the Times said.
The film -- about a caveman's "Leader of the Hunt" position threatened by a prehistoric genius who comes up with revolutionary new inventions like fire -- is set to hit theaters March 22, 2013.