Eastman Kodak eased away from the Hollywood spotlight on Wednesday, asking to have its name removed from the theater that hosts the Oscars.
The once dominant photography company has asked a U.S. bankruptcy court to void an estimated $4 million-a-year contract and remove its name on the famous Kodak Theatre in central Hollywood as Kodak tries to preserve cash and restructure operations.
Kodak said in court documents it was filing a motion to reject the contract and that the theatre should take all steps necessary to remove Kodak's naming rights and the signage associated with it.
It was not immediately clear if Kodak's name will appear on the building during this month's upcoming Academy Awards on February 26, but a source familiar with the matter said several companies have approached building owner CIM Group about naming rights.
About 10 years ago, Kodak agreed to pay $74 million to CIM to see its name for some 20 years on the facade of the 3,400-plus seat theater.
A spokesperson for CIM was not immediately available to comment.
Kodak is proud of its important role in the entertainment industry and our long-standing relationship with film makers, the company said. Our motion today reflects our commitment to ensure that we are maximizing value for our entertainment customers, creditors and other stakeholders.
Branding experts say the value of any naming rights should rise.
I think there's so much media attention on Kodak and the circumstances of its bankruptcy that from a visibility point of view, the new company that puts its name there will get a lot of attention. And that has a lot of value, said Adam Hanft, CEO of Hanft Projects.
Hanft also believes the next naming rights deal for the property will likely be shorter.
Business changes so fast now. It's a high risk proposition for a vendor and a company to enter into such a long-term branding deal in this marketplace, he said. I think the building owner will get more money over a shorter period of time.
He noted that telecommunication companies have deep enough pockets for these kind of deals, while wealthy social media companies may view putting their name on a brick and mortar structure as too old school.
Kodak's bankruptcy on January 19 has been rippling through Hollywood in several ways. Yet even though its role in entertainment started to fade as digital technology began diluting its century-long hold on film distribution, Kodak still has a significant impact on Hollywood.
Among Kodak's top unsecured creditors are major studios, owed millions of dollars in film rebates, who fear they will not be repaid.
Major entertainment companies listed among Kodak's top 50 unsecured creditors include Sony Corp, owed $16.7 million; Time Warner Inc's Warner Brothers, due $14.2 million; Comcast Corp's NBC Universal, short $9.3 million; Viacom Inc's Paramount Studios, owed $6.8 million; and Walt Disney Studios, $4.2 million. [ID:nL1E8CJ3MF]
A lawyer representing the Kodak creditors was not immediately available for comment.
Sources have said most of those debts are related to film rebates owed to the studios who buy film from Kodak on a picture-by-picture basis. The price of film varies and often drops as a studio uses more, which is why they are often owed rebates.
The Academy of Motion Picture Arts and Sciences also has a 20 year deal with CIM Group to host the Oscars at the theatre, but has currently hit the 10-year point in the contract, which includes an option that allows it to explore new venues for Hollywood's biggest awards gala.
The film academy has said it has not begun venue negotiations for the Oscar telecast beyond 2013.
The Kodak is where the awards have been for the last 10 years. We don't have any big reasons to want to leave, Tom Sherak, president of the Academy of Motion Picture Arts and Sciences told Reuters. But we'll make that decision as we negotiate.
The case is in re: Eastman Kodak Co et al, U.S. Bankruptcy Court, Southern District of New York. No. 12-10202.