So now we know with whom David Geffen has been negotiating all these many months. And the newest Hollywood mogul names to put on speed dial are Rajesh Sawhney and Anil Dhirubhai Ambani (one of the world's Top 10 richest men). I can confirm that DreamWorks has secured $500 million to $600 million from India's media and entertainment conglomerate Reliance ADA, specifically its Reliance Big Entertainment, and then will add $500 million to $600 million in debt for what will be a total $1.2 billion financing for its new independent film company. I'm told that DreamWorks 2.0 (yes, the principals get back the name) will make about 6 movies a year when it liberates Steven Spielberg from Viacom Inc's Paramount and all the acrimony of that relationship of the past few years. There's no need for DreamWorks to negotiate a distribution deal for a while, but I'm told that Fox, Universal and Disney would be in the running. Because of Spielberg's long history with Universal and the fact his office never moved off the lot, I've always assumed DreamWorks would return there. But DreamWorks has a lot of ties to Fox, including Geffen's close relationship with Rupert Murdoch and Spielberg's with Fox Filmed Entertainment chairman Tom Rothman.
Meanwhile, DreamWorks and Paramount will battle over Spielberg's exit and all that joint development. Unentangling could really cost Viacom Inc's movie studio. Here's why: Spielberg has the right to terminate his contract as soon as October (because of a key man clause involving David Geffen, who will be leaving in August), even though the famed director's pact on paper goes to 2010. Even Jeffrey Katzenberg's public company Dreamworks Animation has an "out" clause after 10 films. But what hardly anyone knows is that Spielberg has the right to elect to be involved in any project that DreamWorks has developed at Paramount. As an ex-Paramount business affairs source once told me, Steven's so-called "Amblin deal" would apply even if he chooses to leave and is no longer under contract. He'd still make 7.5% of the gross and 50% of the profits to cash break. And if Paramount decides the projects won't be made, they have to be offered to Spielberg in turnaround. So this means Paramount may have to fork over major moolah. Or the likeliest scenario is that Spielberg uses this huge leverage so that Paramount and DreamWorks wind up horse-trading some key development projects.
On Tuesday night, the Wall Street Journal was the first to break the story that DreamWorks SKG is "close to a deal" with one of India's biggest showbiz conglomerates to form a new movie venture. Citing people familiar with the situation, the newspaper says Mumbai-based Reliance ADA Group would provide Spielberg and company with $500 million to $600 million in equity. "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 newspape said. "Reliance's plunge into Hollywood is part of a broader push among India's corporate titans to take their place on the global corporate stage. The country has now produced global players in software, steel, autos and is building a growing powerhouse in telecommunications."
Reliance Big Entertainment used the recent Cannes Film Festival to announce several big deals, like providing financing to A-list talent with production houses, like Jim Carrey, George Clooney, Tom Hanks and Brad Pitt. It also has plans to spend more then $1 billion over the next 18 months building its entertainment empire in India and abroad.
Whoa! Didn’t see that coming.
Gosh! Paramount is no longer the paramour of SKG.
Wonder who will be inline to fill in the other half Dreamworks needs…CIC perhaps?
Comment by Armand — June 17, 2008 @ 8:59 pm
Did the deal include a profound apology from Spielberg for the second Indiana Jones Movie?
Comment by anotherWGAmember — June 17, 2008 @ 11:33 pm
Really tasteful with the turbans, Nikki. You’re a class act.
Comment by David R. — June 17, 2008 @ 11:36 pm
hope curry is on the dreamworks menu! Can’t wait when they serve us this on the lot, luvs it!
Comment by jacktheripper — June 18, 2008 @ 1:17 am
I like reading your posts, your info. I like to feel informed; but I agree with David R, what happened to a sense of class that you’ve brought in the past. Yes, I guess its okay to satirize SKG and Indians..Turbans are funny..or maybe you’re just trying to tie in that funny Mike Meyers movie. You’ve showed some true colors; I guess India is still perceived as a silly culture even though it is the largest democracy in the world.
Christopher Ahuja
Comment by Christopher — June 18, 2008 @ 2:17 am
interesting. nothing in the Indian press about this as of yet.
maybe this is just a way of getting Paramount to blink? Reliance, i dont know what they are trying to do. They are so cash rich that they are throwing it every which way they can.
the management team is a bunch of sycophants and muppets (very hollywood) but least the hollywood folk know the business somewhat…
Comment by Gaurav — June 18, 2008 @ 3:07 am
the turbans are funny, lighten up
Comment by M — June 18, 2008 @ 4:00 am
India is probably the fastest growing economy in the world, and it’s investing and building a lot of “brain-first” industries (engineering, medicine, aerospace, computers), and not just relying on cheap manufacturing and call centers. So I guess it’s natural that they’d start playing a bigger role in America’s economy. To quote Ned Beatty’s character in Network: “It is ebb and flow, tidal gravity, it is ecological balance.”
Maybe Dreamworks can hit up the new billionaires of Ireland’s booming economy for the rest of the money, and call the new company Dreamworks II. (The “i”s standing for India and Ireland as well as the number 2)
Comment by Furious D — June 18, 2008 @ 5:09 am
At least she didn’t put red dots on their foreheads.
Comment by andy — June 18, 2008 @ 6:13 am
I heard about this new deal just this morning. It should be interesting to see how DreamworksSKG and its Indian Partner can now come up with new films and new investments. As for Bollywood Indian film makers now have a release outlet for thier films.
Now with Dreamworks leaving Paramount/Viacom could this leave Paramount studios in a financial lurch? Eespecially with some films that bomb at the box office. Just speculating.
Comment by chuck — June 18, 2008 @ 7:37 am
This is not so shocking since another billionaire Paul Allen financed the original DreamWorks to the tune of $500 mm. Although just based on following this for the past few years Mr. Allen did not see much return from this investment and was lucky to get back his original $500 mm. Hollywood has a long history of taking other people’s money, rich dentists stories, and flushing it down the financial toilet.
Comment by Michael — June 18, 2008 @ 8:08 am
leave nikki alone…turbans are fine…how thin skinned are we gonna get? does this mean manoj shyamalan gets to make more pieces of shite movies?
to paraphrase the great ron howard classic GUNG HO: Brad Grey makes me RAFF!
Nikki, like my morning coffee and bagel….I can’t start the day off without you! you rock!
Comment by drew — June 18, 2008 @ 8:15 am
Would have been more tastful if you superimposed S. Redstone’s head on the poor chump whose heart is being ripped out by S. Spielberg, a la Temple of Doom.
Comment by P. Lee — June 18, 2008 @ 8:26 am
What a classless move with the turbans, Nikki.
What’s next, pictures of burning crosses when talking about making movies in the South?
Comment by Sanjaya — June 18, 2008 @ 9:39 am
Absolutely brilliant deal-making. A clever way to free DW’s blocked funds as well as spread the risk in a marketplace where grosses have shifted to 70 percent international and 30 percent domestic. Plus if DW’s computers crash, tech support will be a local call!
Comment by Santayana — June 18, 2008 @ 10:23 am
Yeah, I can see it already: George Clooney in a remake of Bollywood’s SHOLAY! The perfect place for his shit-eatin’ grin. I would pay triple to see that.
Indian cinema often produces high-quality movies with great value for moviegoers but I doubt Reliance will have the muscle to inject much curry into the projects of it’s new partners. But who knows? The whispering winds of change are breezing across H-town’s inbred landscape. Mr. Rajesh Sawhney sounds like a man with a vision who knows what squares to play at the roulette table.
Comment by Mark S. — June 18, 2008 @ 10:27 am
In the relative scheme of things, $500 million is a drop in the bucket. Google, Microsoft or Apple can gain or lose that much market cap in a few minutes of trading. Film investing is a ridiculous way to spend your money, but if you want to lessen the odds of a loss, an investment in Spielberg & Co. is certainly the way to go. One big new franchise (Jurassic Park, Indy, etc), and you’ll be in the black.
Off-topic, but SAG is really in no position to win the negotiations with the producers. It’ll be too hot to strike this summer. Much of Hollywood will be on vacation. The other half will be too sick of it or not willing to spend the gas money to go to the strike locations. And with no cars on the road no one will see them anyway. Let’s get this nonsense over with and get everyone back to work.
Comment by Guru Pytka — June 18, 2008 @ 11:30 am
What’s so shocking? I predicted this, amongst friends, a looooong time ago. It’s simple: international financing from a foreign company with no Hollywood connects = instant entree into the Industry, especially with a crown jewel like DreamWorks. Let’s see who else jumps on board in other similar deals because there are lots of people with deep pockets wanting to buy in.
Comment by Dermott — June 18, 2008 @ 11:31 am
To Sanjaya:
Maybe Nikki will not paste the turbans on if India’s Untouchables, all 60-160 million, are able to transcend the caste system.
Comment by P. Lee — June 18, 2008 @ 11:40 am
It’s official.
The teenager who was inspired (and in all the right ways) by Bosley Crowther’s biography of Louis B. Mayer “Hollywood Rajah” - out-of-print and shouldn’t be; very instructive -
now literally IS one!
Hallelujah!
God Bless America!
Most especially - bravo!!!!
Comment by Sam Spiegel — June 18, 2008 @ 11:49 am
It’s just an investment for Dreamworks, it won’t impact Bollywood films being distributed in the States, and since India’s film distribution is pretty much mobbed up over there - Indian advances for North American pictures on an M.G. basis barely count. They’re just slightly larger than China.
Comment by RobertNotSoWise — June 18, 2008 @ 1:19 pm
“Really tasteful with the turbans, Nikki. You’re a class act.”
Sorry Nikki, I gotta agree…
Comment by Debsa — June 18, 2008 @ 3:38 pm
Peter Lee: Dont be a damn Clown. :)) As an indian immigrant, I dont find the turban offensive or anything. Who cares.
But what has that got to do with Caste?. As a response, an indian would invoke racism and lynchings and so on..its an ENDLESS cycle.
Are you chinese by any chance? stirring things up?
Comment by Raj — June 18, 2008 @ 4:08 pm
To Lee:
Well the untouchables in India have transcended the caste system, to become among other things President of India. One lower caste person (a woman at that) became the chief minister of the most populous state of India (akin to a black woman becoming the governor of California). Just so you know the Constitution of India was written by (rather the committee that put together the constitution of India was headed by) a much respected scholar from the lowest caste.
The current chief Justice of India is a low caste Hindu. His ancestors were once considered untouchables.
For being a hindu majority nation (80% Hindus), India has had several Muslim presidents, Muslim governors, Christian Chief ministers, Sikh president. There have been several Army/Navy/Airforce chiefs that were from minority groups.
Now, that is India, and how far it has travelled in 60 yrs of independence. So, dear Lee, how about recounting, for us humbler beings, how much America has helped the blacks transcend barriers. How many black / minority presidents / Vice presidents have you had. Just so you know you fare even worse than Saddam Hussein in this respect. Saddam, for all his stupidity, had a Chrstian has his prime minister. Yes, Tariq Aziz, is a Christian. Now even America’s best buddies from that part of the world - Saudi Arabia and Pakistan - would never have a Christian as head of state of Head of Government. So why dont you spare us Indians some of your preaching, Lee.
Is it true that you nobler Americans had slavery enshrined in your constitution (black person is only 3 parts human and 5 parts not, or some such). Is it true that your founding fathers, that drafted the ‘bill of rights’ and ‘declaration of independence’ were the biggest slave owners themselves and perpetuated it. Thomas Jefferson, bears special mention, for his penchant to fornicate with black slave women - and by some accounts siring illegitimate children through slaves, even while ruthlessly controlling a stable of slaves. Now that is some comparison between the the leading light of the US - Thomas Jefferson - and Mahatma Gandhi - father of the Nation, as Indians rever him!
Is it true that you had segregation till as recently as the 1960s in the US. Is it true that white noble souls that came out of church after nourishing their souls, would still demand of a black woman to vacate the seat in the bus so the white person could sit - no transcending there. Is it true that while the (now disbanded) black regiment was being mobilized by trains for the onward journey to fight for the freedom of Jews in Europe, they had to wait for several train stations to pass to quench their thirst, hoping that the train would finally stop at one that didnt display “Whites only” next to rest areas and water taps?
Is it true that women in America were consitutionally disenfranchised till as recently as 90 or so years ago. Yes, women no allowed to vote!
Well, bad as we Indians are, atleast give us some credit, that the law of the land right from day one, doesnt disenfranchize the minority or a woman. Well we had a woman prime minister too.
Do you even know that doctors here in the US deliberatedly denied a bunch of black syphilis patients medicine (but fooled the patients into believing they were being treated) just to study how the disease spreads and eventually kills the person. Often times the doctors snickered about the black patients among themselves calling them “Ni–ers”!
I am not even talking about the public lynching, public castration that was the order of the day in independent USA - all enshrined by the law of the land prevalanet at the time.
I am not saying that all is fine and divine in India, but for a nation that climbs on the pulpit and preaches to the rest of the world about freedom and human rights at every conceivable and inconceivable opportunity, dont you Americans think you need to be a bit for compassionate, at least less scornful, about some legitimate progress that India has made.
—————-
To Sanjaya:
Maybe Nikki will not paste the turbans on if India’s Untouchables, all 60-160 million, are able to transcend the caste system.
Comment by P. Lee — June 18, 2008 @ 11:40 am
Comment by Anonymous — June 18, 2008 @ 4:59 pm
C’mon people. Read the post again, if anything Nikki is praising Reliance more than any of hollywood moguls (SKG)
Give us all a break and stop lecturing us about racism.
Comment by Armand — June 18, 2008 @ 5:10 pm
indian film industry is heavily financed by rich middle eastern mullahs. their film industry isnt as transparent as we are when it comes to financial dealings.
Comment by Anonymous — June 19, 2008 @ 5:31 am
Sounds like a great deal. Although it kind of reminds me of the Japanese in the 80’s. I guess its just part trend and its India’s turn now.
Comment by Dave Cambron — June 19, 2008 @ 7:33 am
In addition to that horrible Temple of Doom film, will Spielberg finally acknowledge that it was the Indian director Satyajit Ray’s 1967 script “The Alien” that he ripped off for E.T., his biggest film hit ever ?
http://en.wikipedia.org/wiki/The_Alien
Comment by RipoffArtist — June 19, 2008 @ 7:34 am
Those boys have seen their better days and are at the cusp of being totally obsolete. Thats why they had to sell and thats why Viacom is getting rid of them.
Comment by seven — June 19, 2008 @ 9:38 am
What’s with all the uptight people. C’mon, get those sticks out of your ass.
Comment by Chris — June 19, 2008 @ 10:13 am
enuff with the turbans already. they are funny in a lame sorta way. How bout a lill sense of humour my fellow brownies.
i had a chat with someone who is working on the big Telecom deal between Reliance and MTN. They said the Dreamworks chatter is one of the 20 or so deals they are working on at present.
So its just in the chatter stage. $500 million is pretty much nothing for someone with their war chest. MTN is a $40Billion wager.
Reliance is also fairly active in the entertainment space with content production for television, film production as well as multiplexes and animation. This seems like their way of getting critical mass on an international sale. They are launching a satellite service, the only thing missing is a newspaper and a tv channel.
Although UTV another Indian media player has made moves in the western space, they financed Chris Rock’s I love my wife, produced Mira Nair’s Namesake & n M.Night Shyamalan’s The Happening.
Comment by Gaurav — June 21, 2008 @ 9:00 pm
Hey anonymous, you have a lot of your so called facts wrong about Jefferson, and 3/5 of a person, and others. Maybe it is because you cannot read English to well. Maybe your turban is to tight. Lighten up or go back from where you came if we are so bad.
Comment by David — September 20, 2008 @ 10:02 am