Firms to Challenge Disney in Family Movies

Fox Filmed Entertainment struck a deal Tuesday with billionaire Philip Anschutz's movie company to take aim at the biggest name in family entertainment: Walt Disney Co.

News Corp., Fox's parent, hopes to capitalize on the lucrative family film business and plug a hole in its own lineup by teaming with Walden Media, the producer of the 2005 blockbuster "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe."

Walden executives said that after working with Disney on several projects, including "Narnia," they determined that they would be better off with Fox. That's because Fox lacked what its Burbank rival already had: an established family-oriented brand.

"Disney needed us less than other companies that are striving to get into that area," said David Weil, chief executive of Anschutz Film Group, Walden's parent company. "Fox recognized that their needs and our interests overlapped. It was a direction they were already pointing in."

The deal surprised some in the industry, who figured Disney would be a natural home for Walden. Disney, after all, had a so-called first-look deal that gave the studio dibs on Walden films. That pact expired in 2003. The remaining "Narnia" sequels, "Bridge to Terabithia" and "Prince Caspian," are slated to be released by Disney in 2007 and 2008, respectively.

The success of "Narnia," which grossed more than $744 million worldwide, put the 5-year-old Walden on the map. Over the last several months, Walden Media met with four major studios before striking a deal with Fox.

Eleven percent of films released this year have had "G" or "PG" ratings, and they have accounted for 28% of the box office, representing $1.6 billion of the $5.8 billion in tickets sold, according to boxofficemojo.com, an online tracking service.

"Certainly there is a lot of money to be tapped into by appealing to families," said Brandon Gray, president of boxofficemojo.com. "The ultimate brand on this front is Disney because they have decades of history in that genre."

Though Fox has had success in animation with such hits as "Ice Age: The Meltdown," the studio has not developed a big live-action franchise that resonates with younger audiences such as "Harry Potter" or "Pirates of the Caribbean." The studio is eager to marry its massive distribution machine with Walden's unconventional grass-roots marketing know-how. Walden typically targets librarians and schoolteachers nationwide to get the word out about upcoming movies.