February
6The Disney-DreamWorks Dance
DreamWorks' scramble to come up with a workable distribution deal is an appropriate metaphor for Hollywood’s sorry economy. Unable to raise its anticipated capital, DreamWorks has been furtively renegotiating its Universal deal while at the same time talking with other interested parties, such as Disney. The objective: Raise additional funding and gain some pay TV slots.
Universal’s distribution deal, which most folks assumed was in place, called for DreamWorks to put up all the production and P&A funding. Given DreamWorks’ desire to make six films a year, this deal wasn’t working for the House of Spielberg.
Bob Iger had originally expressed interest in the Disney deal and reiterated in comments this week that he was searching for alternate structures whereby Disney could remain a player in the film business without fronting all the money.
If Iger can hammer out details of a DreamWorks deal, this would fulfill his aim. Banking sources suggest Disney could help DreamWorks with mezzanine financing and might also contribute toward P&A.
So who would start palpitating over such a deal? Among the candidates: Producers and execs at Disney, who would lose the several release slots that DreamWorks would gain. Also execs at Universal, who were used as a stalking horse in the Disney negotiations. Also execs at DreamWorks, who even this week have been giving out obfuscating information to eager reporters.
Earlier this week, Disney announced a 26% revenue slide in its film studio, with operating income plummeting 64%. In his remarks to analysts, Iger said, “The cost of the system needs to come down. We need to be even more selective in terms of what we make and distribute.”
DreamWorks product apparently will now come under Disney’s criteria of selectivity.
All this having been said, a DreamWorks-Disney deal represents two fascinating reversals of positions: First, Steven Spielberg’s undying loyalty to Universal, the studio that gave him his start, has apparently fallen victim to the money crunch. Once Steven started writing personal checks to cover overhead, he obviously became more pragmatic.
Second, Bob Iger’s repeated pledges that Disney films would hold fast to “the Disney brand.” Would he be happy with DreamWorks' first picture, "Dinner For Schmucks"?
Universal’s distribution deal, which most folks assumed was in place, called for DreamWorks to put up all the production and P&A funding. Given DreamWorks’ desire to make six films a year, this deal wasn’t working for the House of Spielberg.
Bob Iger had originally expressed interest in the Disney deal and reiterated in comments this week that he was searching for alternate structures whereby Disney could remain a player in the film business without fronting all the money.
If Iger can hammer out details of a DreamWorks deal, this would fulfill his aim. Banking sources suggest Disney could help DreamWorks with mezzanine financing and might also contribute toward P&A.
So who would start palpitating over such a deal? Among the candidates: Producers and execs at Disney, who would lose the several release slots that DreamWorks would gain. Also execs at Universal, who were used as a stalking horse in the Disney negotiations. Also execs at DreamWorks, who even this week have been giving out obfuscating information to eager reporters.
Earlier this week, Disney announced a 26% revenue slide in its film studio, with operating income plummeting 64%. In his remarks to analysts, Iger said, “The cost of the system needs to come down. We need to be even more selective in terms of what we make and distribute.”
DreamWorks product apparently will now come under Disney’s criteria of selectivity.
All this having been said, a DreamWorks-Disney deal represents two fascinating reversals of positions: First, Steven Spielberg’s undying loyalty to Universal, the studio that gave him his start, has apparently fallen victim to the money crunch. Once Steven started writing personal checks to cover overhead, he obviously became more pragmatic.
Second, Bob Iger’s repeated pledges that Disney films would hold fast to “the Disney brand.” Would he be happy with DreamWorks' first picture, "Dinner For Schmucks"?
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Good one
Posted by: Admirer | 2/9/2009 2:59:44 AM
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Posted by: hoolio | 2/6/2009 5:24:37 PM