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Looks like Paramount has an out clause


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#1 of 90 OFFLINE   Dan_Ohio

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Posted January 07 2008 - 01:34 PM

In this article they make refernce to a possible out clause based upon what Warner decided to do.
FT.com / Companies / Media & internet - Paramount in HD-DVD blow

#2 of 90 OFFLINE   Carlo Medina

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Posted January 07 2008 - 01:54 PM

The Financial Times is a well respected business source [I used to work in a top-25 U.S. Business School] so I expect they've done their due diligence, and not just grasping at internet rumors. Of course, we all know about the New York Times plagiarism case so anything is possible, but FT has pretty good journalistic quality and integrity.

And as one who has seen many business contracts, an out-clause [or several of them] is just S.O.P. in any contract, so this is unsurprising to me.

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#3 of 90 OFFLINE   ManW_TheUncool

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Posted January 07 2008 - 02:18 PM

Good to also see the article mentions the "olive branch" Sony is extending *and* their acknowledgement that there's still lots of work to do for wide acceptance of Blu-ray.

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#4 of 90 OFFLINE   nolesrule

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Posted January 07 2008 - 03:02 PM

I just posted this in the big WB threadafter reading about it on Engadget. I guess I should have scrolled down a little further. This could be an interesting development.

I wonder what Michael Bay has to say about this development. Posted Image

#5 of 90 OFFLINE   PeterMano

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Posted January 07 2008 - 03:14 PM

To a certain extent all these companies have an out clause. I don't think there is anything that could actually force a company to release films on a format. Paramount could simply reduce their output of films to hd dvd to such a miniscule meagre scale, that it would be pointless to hold them to an exclusivity agreement.

That's always been one of the problems with this format war, studios not delivering on titles. For a long while, the only exclusive bluray studios that mattered were Sony and Disney, Fox was off in their own little world, they might not as well have been part of bluray, for all it mattered.

#6 of 90 OFFLINE   Adam Gregorich

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Posted January 07 2008 - 03:54 PM

Quote:
Good to also see the article mentions the "olive branch" Sony is extending *and* their acknowledgement that there's still lots of work to do for wide acceptance of Blu-ray.

Sony needs to do this. Getting WB was just the first battle. HD DVD could still put up enough of a fight where BD has to still focus on them and not DVD. Beating DVD is going to be the real challange. They have invested way to much money in studios and the PS3 to have BD not reach mainstream sucess. It could still end up like LD (which i know is fine for all of us, but not for Sony).

#7 of 90 OFFLINE   ManW_TheUncool

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Posted January 07 2008 - 04:00 PM

Quote:
Originally Posted by Adam Gregorich
Sony needs to do this. Getting WB was just the first battle. HD DVD could still put up enough of a fight where BD has to still focus on them and not DVD. Beating DVD is going to be the real challange. They have invested way to much money in studios and the PS3 to have BD not reach mainstream sucess. It could still end up like LD (which i know is fine for all of us, but not for Sony).

Agreed. I figured as much anyway, but it's still good to see this stuff get mentioned in more mainstream news, not just here in enthusiast forums. Posted Image

_Man_
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#8 of 90 OFFLINE   Paul.S

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Posted January 07 2008 - 04:26 PM

"Sorry," but this piece is problematic. With all due, Carlo, just because a publication is well-regarded doesn't mean they can't/don't run dodgy pieces (which you acknowledge with your reference to the NYT/Jayson Blair scandal). Absolutely agreed re your comment on "out" clauses, commonly (at least by the lawyers) called escape provisions, being standard. Just because this language almost certainly exists doesn't mean that Par is "poised" to drop its HD DVD support. The article quotes NO ONE to support its opening premise (or "slug" as the journalists call it).

Re "It is unclear whether DreamWorks Animation has the same get-out clause in its contract with the HD-DVD camp." What writers Matthew Garrahan and Mariko Sanchanta really mean by "unclear" is that THEY don't know. It is quite clear to Jeffrey Katzenberg, senior Viacom management and some top lawyers in Viacom business affairs what their options are.

Re "However, Paramount and DreamWorks have a close relationship, with Paramount distributing DreamWorks Animation films." Just because Par distribs DWA's films doesn't mean there is anything necessarily close about that relationship. It's a business relationship. We can also say (Viacom director) Spielberg has an even "close[r] relationship" with Universal. His Amblin bugalows are still located on the U lot. The intimation is that as goes DW, so goes DWA when that may or very well may not be the case. DWA is a separate entity and a publically traded company. Especially given the federal scrutiny Jeffrey faced over Shrek 2 DVDs, he has his own calculus and his own p & l to worry about and his decisions and contracts may have different complexions because of that, wheras Par owns the DW library lock, stock and barrel.

The Stringer quote about having "a lot of work to do to grow the market" is indeed nice to see (although it comes after some other remarks that are patronizing and disingenuous), but the rest of the article is pointless.

#9 of 90 OFFLINE   FrancisP

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Posted January 07 2008 - 05:27 PM

Who really cares?

Having Paramount on your side doesn't mean much. Aside from Transformers and Star Trek, did Paramount ever release anything else on hd-dvd? Paramount won't release any movies on dvd or hd. What makes anyone think they will release anything on br? Regardless of what they do on blu-ray, bet
they try another bite of the ST apple on hd-dvd.

#10 of 90 OFFLINE   Carlo Medina

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Posted January 07 2008 - 05:35 PM

Quote:
Originally Posted by Paul.S
"Sorry," but this piece is problematic. With all due, Carlo, just because a publication is well-regarded doesn't mean they can't/don't run dodgy pieces (which you acknowledge with your reference to the NYT/Jayson Blair scandal). Absolutely agreed re your comment on "out" clauses, commonly (at least by the lawyers) called escape provisions, being standard. Just because this language almost certainly exists doesn't mean that Par is "poised" to drop its HD DVD support. The article quotes NO ONE to support its opening premise (or "slug" as the journalists call it).
Agreed on potentially dodgy pieces, as I admitted with the NYT position.

However, think about this: how many quotes did we get from official sources that Warner Brothers was about to drop HD-DVD? Or that Paramount was about to drop Blu-Ray?

The point about secret, back-door dealings is that a lot of times, people don't talk, or talk off-the-record. Not saying that Paramount is "poised" to do anything, but the fact that this out-clause has now leaked to the public (the assumption being that someone "in the know" leaked it) probably means the reporter has at least talked to someone off-the-record that is more in the know than the general public.

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#11 of 90 OFFLINE   Paul.S

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Posted January 07 2008 - 05:48 PM

My point is that the "out" clause is not a leak: you don't have to have taken Contracts 101 in law school to know that that is a "boilerplate" concept, the specifics of which then get negotiated. Whatever the language is it's NOT the result of "secret, back-door dealings." Of course Par has an "out"; it's not news. Whether they chose to exercise it or not is.

This story is like reporting that it is going to rain because there are clouds in the sky, and that it is "unclear" whether certain parts of town will get wet.

#12 of 90 OFFLINE   Carlo Medina

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Posted January 07 2008 - 05:51 PM

Hey, it's all cool. You have a problem with the piece. Others (including myself) don't. As they say: time will out all secrets.

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#13 of 90 OFFLINE   Paul.S

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Posted January 07 2008 - 06:37 PM

LOL--my point is that it's NOT a secret(/mystery). It's just closely-held information. And this piece is essentially reporters commenting on their lack of knowledge of closely-held corporate information, attempting to reify it into "news" ("news" that enthusiast blogosphere denizens amplify into "substance": 'I read that Par is gonna switch, man!')

#14 of 90 OFFLINE   Paul.S

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Posted January 07 2008 - 06:46 PM

LOL! I just received Sarah Hunt's e-mail quoting this "story" re Par having "an out clause in their contract with the HD-DVD camp and that they intend to exercise it soon." Blah blah blah.

#15 of 90 OFFLINE   Dave>h

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Posted January 08 2008 - 12:58 AM

Maybe no one is considering this but if Paramount has an out clause, then so do Warners, Fox Disney etc. What's good for the goose...

I suspect that Warner or anyone else can opt out of their Blu exclusivity clause if things don't go well. People seem to forget that being so busy speculating on the demise of HD DVD.

Lets not forget Sony's astounding capacity to screw things up.

Dave

#16 of 90 OFFLINE   Paul Arnette

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Posted January 08 2008 - 01:50 AM

From blu-ray.com

Quote:
Maxpower just confirmed on the Insider's Thread that two things have to happen for Paramount to get out of this contract.

(1) Warner needed to go Blu (done)
(2) They have to pay back money / buy out of the contract

The amount wasn't given, but he said they are weighing what they could make off of Blu-ray through the beginning of 2009 (when the contract ends) against what the buyout cost is to see if it's worth doing.

Universal Blu-ray Discs I will not be buying while they're offered only as Blu-ray + DVD 'flipper' discs:

The Jackal
, Out of Africa, and Traffic.

#17 of 90 OFFLINE   Kevin Grey

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Posted January 08 2008 - 02:53 AM

Quote:
Originally Posted by Paul Arnette
From blu-ray.com:


The amount wasn't given, but he said they are weighing what they could make off of Blu-ray through the beginning of 2009 (when the contract ends) against what the buyout cost is to see if it's worth doing.

I would expect that Sony might be willing to help them out with any buyout cost.

#18 of 90 OFFLINE   DaViD Boulet

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Posted January 08 2008 - 03:21 AM

More confirmation that Paramount is going to go Blu:

Game Over: HD DVD To Join Deadpool

"Paramount is said to be about to switch to Bluray according to CrunchGear, the final fatal blow in Microsoft’s and Toshiba’s effort to establish HD DVD as the Next Generation DVD standard."
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#19 of 90 OFFLINE   Ray Chuang

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Posted January 08 2008 - 03:21 AM

It will be interesting to see if Paramount (a Viacom subsidiary) can buy out its HD-DVD exclusive contract. The buyout could be huge--maybe over US$200 million.

Interestingly, I think it's more likely NBC Universal could buy out its HD-DVD exclusive contract because it can use the money from its corporate parent General Electric to pay for the buyout.
Raymond in Sacramento, CA USA

#20 of 90 OFFLINE   Carlo Medina

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Posted January 08 2008 - 04:41 AM

Wait a sec, I thought no money was given to Paramount... Posted Image

FWIW I doubt the payback is going to be larger than the actual initial payout. That doesn't make sense.

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