DreamWorks Closes $1.2 Billion Deal with Reliance

Published by Jeff Leins on September 20, 2008

Steven Spielberg and his DreamWorks partners David Geffen and CEO Stacey Snider have closed a funding deal with one of India’s largest entertainment conglomerates.

Mumbai-based Reliance ADA Group will invest $500 million and provide another $700 million in debt through J.P. Morgan Chase towards the venture.  The news has been circulating since June, but was only recently finalized this past Thursday.

DreamWorks is expected to split from parent company Paramount Pictures any day now and become a private company making about six films a year.  Paramount immediately released a statement saying they are waiving certain contractual obligations to allow DreamWorks execs to bring their employees with them.

Spielberg will retain creative control over the studio and Snider will remain CEO.  Geffen is expected to retire from the movie industry.

Distribution will likely be set up at Universal, where Spielberg’s office still remain even after the acquisition in February 2006.  There have already been meetings to discuss the rebuild of the fire-ravaged Universal lot for the return of DreamWorks.

This also comes at a strange time considering Universal just passed on funding the first of the Tintin trilogy, which was supposed to start production this month.  Spielberg is scheduled to direct the first motion-capture movie, Peter Jackson the second, and the third left open to a possible joint collaboration.

According to Empire Online, Spielberg submitted a budget of $130 million and an outrageous demand of 30% of the box office.  This means the movie would have to make $425 million before Universal saw any money.  Even stranger is Paramount might be the one backing the project.