June
18DreamWorks Wants to Re-invent Itself Yet Again
UPDATED
The saga of DreamWorks is starting to remind me of one of those studio story meetings where everyone wanted to make the movie but no one could agree on the plot.
DreamWorks was originally formed as a multimedia enterprise built around its own physical studio. Now, DreamWorks will now become a relatively small but still prestigious production company principally funded by a Mumbai-based steelmaker – a venture that more resembles Amblin, Steven Spielberg’s old shingle. And it will say “bye-bye” to Paramount after what even DreamWorks admits were several of the smartest marketing campaigns in recent Hollywood history.
Further, it will look for a new distribution partner at a time when all the majors are desperate not for more product, but for reduced slates. Fully funded Spielberg pictures are tempting commodities, but for whom? Universal may shortly be sold by GE, whose stock is tumbling and Fox keeps saying it has more than enough product.
Of course, the “new” DreamWorks is lacking a few key elements. Jeffrey Katzenberg’s brilliant animation machine must stay at Paramount. However, Katzenberg has an escape clause, that he could trigger in two years, terminating the Paramount deal in return for a $150 million payoff. Spielberg and Stacey Snider’s development slate is also glued to Paramount unless their nimble attorney, Skip Brittenham, can carve out an imaginative exit treaty. David Geffen insists he’s leaving the film business. Spielberg has some powerful leverage on his development slate at Paramount; at his option, the projects he’s involved in could revert to his old Amblin deal. This would mean that Spielberg would have 7½% of the gross and 50% of the profits as the producer.
Hence, the new DreamWorks in its Mumbai phase will essentially be a movie company run by Spielberg and Snider that turns out six or so films a year, which will be partly financed by Reliance ADA and partly by debt. The DreamWorks staff and inventory of projects would remain at Paramount pending negotiations.
Spielberg is 61 and still hyper-active; and Snider is a fiercely ambitious operative who has no intention of cooling down. Their new partners certainly want action – the Indian company recently announced a series of Hollywood investments and would like to help finance projects by players like Jim Carrey, Tom Hanks and George Clooney.
At Cannes, Reliance execs said they wanted to fund development slates and co-finance production. A myriad of other foreign entities have announced similar ambitions; it’s hard to think of an example in which any of them came out ahead – or even.
Without DreamWorks, Paramount will now forge ahead with its own slate of hoped-for tentpoles, building on franchises like “Iron Man.” “Transformers II” is now in production, which, interestingly enough, is co-owned by DreamWorks. And there’s a possibility, hurt feelings aside, that Paramount could still emerge as the distributor of at least some of DreamWorks projects.
Hollywood has witnessed many divorces; in this case, the DreamWorks legal team set forth such a complex and punitive pre-nup agreement that it would seem impossible to implement.
So what becomes clear is that the Indians plan to spend a lot of money and the lawyers are set to make a lot of money.
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The devolution of Sir Steven has begun... from studios to Paul Allen to South Korea and now to Mumbay !!
Why doesn't he just reach into his own pocket and fund the damn thing already ?? !!
Posted by: santa monica beachboy | 6/18/2008 3:02:14 PM
It's an interesting time, as we see many of the mini-minis fall apart -- does that mean we are at the beginning of the mini-mediums? Dreamworks, CBS Films and such with their $50+ Million budgets vs. the less than $10M for the mini-minis. Interesting.
Posted by: SKG | 6/18/2008 2:40:33 PM
The Spielberg magic will drop somewhere and the $$$$ always follows.
Posted by: c | 6/18/2008 1:12:29 PM