Indian Media Conglomerate to Fund Spielberg's New DreamWorks
Posted on June 18, 2008An Indian media conglomerate is stepping forward as a backer for Steven Spielberg's dream to re-start Dreamworks as an independent studio. It costs a lot of money to run a movie studio and finding backers in today's economy isn't easy. Except for Steven Spielberg, who is sort of a one-man hit machine who also knows how to win Oscars.
The principals of DreamWorks SKG are close to a deal with one of India's biggest entertainment conglomerates to form a new movie venture, according to people familiar with the situation, a move that would give director Steven Spielberg the cash to finance his DreamWorks team's departure from Viacom Inc.'s Paramount Pictures later this year.Spielberg and David Geffen have signaled that they are going to leave Paramount as soon as their contracts are up. With Wall Street financing drying up and the U.S. economy in a recession, foreign buyers are picking up all kinds of great deals: from landmark Manhattan skyscrapers to owning a piece of the legendary SKG DreamWorks (their deal with Paramount allows them to take their name back if they leave). The deal isn't done yet, but the negotiations alone prove that globalization is alive and well.
Mumbai-based Reliance ADA Group would provide Mr. Spielberg and company with $500 million to $600 million in equity, moving them one step closer to ending one of Hollywood's most contentious and closely watched battles. In Reliance, the DreamWorks team also would have an unusual and ambitious partner in the film business: an Indian firm with interests in telecommunications, financial services and entertainment that wants to build a media empire by financing Hollywood pictures.
The deal amounts to a marriage of some of the biggest names in the Hollywood and Indian business worlds, with Reliance getting a large stake in the new company. DreamWorks, which makes live-action films that have included last year's "Blades of Glory" and "Dreamgirls" in 2006, would likely seek another $500 million or so in debt financing elsewhere to give its new venture enough money to make a slate of about six films a year. The company would then choose a studio to distribute the films, which is still an open question. General Electric Co.'s Universal Pictures, where Mr. Spielberg began his career, is thought to be the director's preference to release his future works, but News Corp.'s Twentieth Century Fox also is thought to be a serious contender.