Disney to axe Sydney studio

Australia's film industry has been dealt a blow with the decision by US entertainment giant Walt Disney Co to close its animation production studio in Sydney.

The closure of DisneyToon Studios Australia (DTSA) in mid-2006 will cost about 250 jobs, the company said.

"It is with regret that DisneyToon Studios has decided to close their animation production facility in Sydney in mid-2006," the company said in a statement today.

"This closure is a business decision due in large part to the changing creative climate and economic environment in which DisneyToon Studios requires more flexibility to choose the most appropriate and efficient animation process."

The demise of the Australian studio follows Disney's closure of other international facilities in recent years.

DisneyToon staff were told of the decision yesterday when all employees were briefed by general manager Philip Oakes.

"They just told us they wanted to finish up (films) Brother Bear and Cinderella III and the studio would shut down after that project," said a staff member who asked not to be named.

"They said primarily that they just can't guarantee getting enough constant work coming through to us here so that decision was made to close the studio.

"I think most people knew it was going to happen. You hear a few rumours.

"We are not covered by a union at all. They did hand us out some forms and are giving us a redundancy payout, which I think is pretty standard."

The DTSA began operations in Australia in 1988, taking over the old Hanna Barbera studios in Sydney's St Leonards.

Since then, the studio has grown rapidly and moved to the city with offices in Castlereagh Street in central Sydney.

DTSA started working mostly on television cartoons, such as Winnie the Pooh, Darkwing Duck, Goof Troop, Aladdin, Timon and Pumbaa, and Duck Daze.

However, as technologies advanced and Australian animation staff became more skilled, the studio began working on higher profile projects.

Its first feature film was the 1994 sequel to Aladdin, entitled The Return of Jafar, released direct to DVD.

Other films included the sequel to The Lion King, The Lion King II: Simba's Pride, An Extremely Goofy Movie and Lady and the Tramp II: Scamp's Adventure.

In 2002, the DTSA produced its first theatrical release feature, Return to Neverland, the sequel to the 1953 Disney classic Peter Pan.

That film grossed more than $100 million at the worldwide box office.

In recent years, DisneyToon's US parent company closed all its overseas operations bar Australia and a small office in the Philippines.

In March last year, DisneyToon said "virtually all" of Walt Disney Co's hand-drawn animation was being produced in Sydney.

"The studio thought it was better to boil it down to what the audience would accept and Sydney being so good still remained," senior Disney animator Andreas Deja said earlier this year.

This year, DisneyToon Studio has produced animated movies Tarzan 2, Lilo and Stitch 2 and Bambi 2.

"The many gifted and talented artists on the Australian team have made a tremendous contribution to Disney's animation endeavours," DisneyToon said in today's statement.

Disney said it would continue to employ 270 Australians around the country in other divisions.

AAP