Universal Selling off Rogue Pictures

Just because people are still going to the movies in or near record numbers, that doesn't mean the people making those movies are safe. Just this year, we've seen the neutering of New Line, which has been gutted and repurposed within the smoking monolith of Time-Warner, and we've seen that same conglomerate do away with Picturehouse and Warner Independent, two indie darlings that otherwise had very promising futures.And now, Variety's Anne Thompson reports that Universal will likely sell off Rogue Pictures to Relativity Media for $150 million. However, I don't think this is economic panic but incredibly shrewd business sense.Rogue began as an off-shoot of another successful Universal boutique, Focus Features, and in the past few years has given American audiences Hot Fuzz and Shaun of the Dead, plus horror flicks like Seed of Chucky and The Hitcher. The move comes months after Rogue's biggest hit, The Strangers, one of the most profitable movies of the entire summer, which is out on DVD today, ironically enough.The new arrangement would give Relativity control of the catalog, four 2009 flicks, and a stack of movies in development. Universal would retain distribution rights through 2013, kicking in an estimated 10% in a distribution fee.Here's where I think this all gets really interesting, though. Thompson didn't expressly link these two stories in this way, but you know that $150 million Universal will put in its back pocket for this deal? That's the exact amount the studio promised in its recent pact with DreamWorks as a kind of emergency fund. Should DreamWorks need more money to produce movies, they'd dig into the $150 million. So in a way, Universal absorbed a much better-known movie brand - and got Steven Spielberg - for free.  Oh, but there's more: Universal will also be paid a healthy 8% distribution fee by Dreamworks, and if you don't think getting 8% for Kung Fu Panda 2 is greater than giving 10% for People Under the Stairs 2, you've got to learn the new math. So to recap: Universal dumps a baby brand, makes $150 million, can use that money to fund one of the most recognizable studio names in the industry, and get paid even more to distribute that company's films. That's a win-win.