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The Morning Fix: Paramount gets animated. CNN shows Eliot Spitzer the door. Heat intensifies on News Corp.

July 7, 2011 |  7:36 am

After the coffee. Before deciding whether to see "Zookeeper" or just put something in a microwave and stare at it for two hours. 

The Skinny: News Corp. is taking a beating for getting caught doing what tabloid reporters do, which is really sleazy stuff. To borrow from "Casablanca," I'm shocked to find there's gambling going on. Elsewhere in media news, Paramount is starting its own animation studio and Charlie Sheen's comeback is inching forward.

Getting animated. Viacom's Paramount Pictures said it will create its own animation division, a move that indicates the studio will be severing its ties with DreamWorks Animation. Paramount's current distribution agreement with DreamWorks is up next year and tensions over a new deal have been on the rise as neither side can seemingly come to an agreement on terms. DreamWorks will now either have to find a new distributor or a buyer. Warner Bros. and Universal may kick the tires of DreamWorks but the animation studio's shareholders may get hosed as its stock price has dropped 25% in the last two years. Analysis from the Los Angeles Times, Wall Street Journal, Hollywood Reporter and Deadline Hollywood.

It's only a crime if you get caught. Controversy continues to swirl around Rupert Murdoch's News Corp. and its London tabloids over the hacking into voice mails of not only celebrities and members of the royal family, but random victims of crime and terrorism too. Of course, this sort of "reporting" has been going on among the British tabloids for years. In the old days, it was going through garbage and stealing mail. Now new technology requires new snooping methods but, to borrow from HBO's "The Wire," the game is the game. For now, Murdoch is standing by Rebekah Brooks, who oversees News International, the unit that houses the British tabloids. There are others at the company who should also be feeling heat, but some of them have the same last name as the big boss. Another who should be getting some more scrutiny is Les Hinton, the veteran News Corp. executive who now is overseeing the Wall Street Journal but also used to run News International when a lot of the hacking first took place. The latest from the New York Times, which is having a field day with this one, as well as coverage from the Los Angeles Times and the Guardian.

Revolving door. Christine Varney, the top antitrust lawyer at the Department of Justice, is exiting to join the powerhouse law firm of Cravath, Swaine & Moore. Varney not only oversaw the department's review of the Comcast-NBCUniversal merger, but was also guiding its work on the AT&T-T-Mobile deal. She is joining a firm that counts among its clients United Airlines, which last year got approval of its merger with Continental from the Varney-led DOJ division. More from Bloomberg.

Don't let the door hit you. CNN pulled the plug on former New York Gov. Eliot Spitzer's "In the Arena," which was the second version of his political talk show at the all-news channel after the first one, "Parker Spitzer," which also featured columnist Kathleen Parker, tanked. Details on CNN's new lineup from TV Newser. Hey, Anthony Weiner is out there if CNN wants to go in a new direction. 

Sending the very best. Hallmark is moving its movie franchise to ABC this fall. The Hallmark Hall of Fame brand has been associated with CBS for 16 years, but the two companies were unable to reach a new pact earlier this year. Details on the ABC-Hallmark deal from Variety.

Buyer beware. Charlie Sheen is looking to make a sitcom out of the movie "Anger Management," which starred Jack Nicholson and Adam Sandler and was produced by Joe Roth, who also has the rights to the screenplay and hence a say in the project. Lionsgate is the production company. I'll just say this: If you're hiring someone, don't you get nervous if he or she left the last job under less than ideal circumstances. The latest on Sheen from TMZ, of course.

Too close to home? MSNBC gave a thumbs-down on the idea of Chris Matthews doing a cameo in a pilot Aaron Sorkin is making for HBO about the cable news business. Vulture reports that the network's concern is the portrayal of cable news as "a land of egomaniacs working for wealthy drunks."

Inside the Los Angeles Times: John Horn on whether "Zookeeper" will have any bite. "It's Always Sunny in Philadelphia" costar Charlie Day is on a roll, thanks to his part in the upcoming "Horrible Bosses. "

-- Joe Flint

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