Division announced after 'Rango' pulled in more than $225 mil worldwide

Paramount Pictures is launching its own animation division, preempting negotiations with DreamWorks Animation over their distribution deal that’s set to expire at the end of 2012.

Studio’s Wednesday announcement comes just months after “Rango,” Par’s first CG-animated feature outside DWA, brought in more than $242 million worldwide.

Plan is for the new division, to be called Paramount Animation, to release one pic per year, beginning in 2014. Which film will be up first has not been decided, but several qualifying projects are in development, including the graphic novel-based “New Kid.”

“We have been thinking about doing this for some time prior to ‘Rango’s’ success going back six years ago when we began rebuilding the studio,” Paramount CEO Brad Grey told Daily Variety. “We want to develop pictures we believe in, and we see family movies as the sweet spot of the movie business.”

To run the venture, Par will now seek an exec who will report to Paramount Motion Picture Group prexy Adam Goodman.

Though Industrial Light and Magic did the animation on “Rango,” Paramount’s announcement is not an indication that a separate pact with ILM is in the offing. In fact, ILM wasn’t aware the announcement was coming, and Grey said the studio would use several companies to support Paramount Animation, in particular its Viacom-owned sister company Nickelodeon.

How this initiative affects Paramount’s distribution deal with DreamWorks Animation, in place since 2006, remains to be seen: Under the current pact, which runs through 2012, DreamWorks pays Paramount 8% of film revenues. Paramount has offered to extend those same terms through 2013, but DWA topper Jeffrey Katzenberg has repeatedly expressed the desire for a lower fee, and indicated that those talks need not start in earnest until February.

DreamWorks had no comment on the new division, which potentially gives Paramount additional leverage for negotiations. An outright split from Paramount would leave DWA with limited options, as Fox, Sony and Universal each have their own animation divisions, and Disney is a non-starter. That leaves Warner Bros., which has a production deal with Animal Logic (“Happy Feet”), but no animation division — despite its deep roots in toon franchises.

DWA stock fell about 3% Wednesday on the news, closing at $20.12 after dipping to $19.76 in earlier trading, its lowest point in a year.

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