Viacom CEO cozies up to DreamWorks

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NEW YORK — Philippe Dauman, president and CEO of DreamWorks parent Viacom, can only hope his comments Tuesday regarding Steven Spielberg have the same impact his dismissive remarks of this summer did.

On Monday at the UBS Global Media & Communications Conference here, Dauman called Spielberg "one of the great filmmakers of our time and all time."

That's a far cry from September, when Dauman called the potential loss of Spielberg, who can leave DreamWorks when his contract expires next year, "completely immaterial" to the bottom line of Paramount and its parent Viacom. The comments, coming amid rumors that the director was increasingly unhappy over his relationship with Paramount chief Brad Grey, created a media firestorm and turned "whither Spielberg?" into a Hollywood parlor game.

Whether Dauman has had a change of heart, or is simply rolling out some new steps in a delicate dance of courtship, remains to be seen.

"We are very pleased with where we are with DreamWorks," Dauman said during his appearance when asked about the state of affairs amid continuing chatter that DreamWorks executives Spielberg and David Geffen have been mulling a move to Universal Pictures.

He also signaled that a DreamWorks relationship could even continue in a new form and touted his "very good personal relationship" with Spielberg. That led some to believe that Paramount is hoping it could retain the director's services even if his partners bailed.

Viacom's Paramount Pictures agreed to acquire DreamWorks in late 2005 in a deal that contained three-year contracts with its principals. However, Geffen has an option to announce a move elsewhere at the start of 2008. Observers have suggested the DreamWorks founders could choose Universal as their future partner given that NBC Uni was close to winning the company before Viacom beat it out in money terms and given that Spielberg has long-standing ties at Universal. His offices are still on the Universal lot.

"Our objective is to proceed with mutual respect," Dauman said Monday. "We're going to proceed with calm and deliberateness." He also said Spielberg and he have agreed not to follow any strict timelines in negotiations.

In recent months, Paramount has moved to address the unhappiness of the DreamWorks crew by such moves as clearly labeling DreamWorks-produced films as DreamWorks/Paramount releases.

But the Viacom CEO signaled that he expects at least some changes to the current setup. "I hope to continue our relationship long-term — one way or another," he said. He didn't elaborate.

If things don't work out, NBC Uni president and CEO Jeff Zucker said his company would look at moving DreamWorks under its own umbrella if it became available.

If DreamWorks decided to end its current partnership with Viacom, "we'd certainly look at it," Zucker said earlier in the day in a luncheon keynote interview. "We know them well" and have had strong relationships, he added.

Asked about Paramount's financial position in a challenging film business, Dauman acknowledged that film costs are rising, and "some revenue streams are flattening out," a reference to slowing DVD sales. But he expressed confidence in his film team's ability to boost margins and lower capital needs by working efficiently, creating new revenue opportunities and using branded product.

Looking into 2008, Dauman lauded Paramount's "well-balanced slate," touting, among others, J.J. Abrams' "Cloverfield" and a new take on the "Star Trek" franchise, which he said is leaning "more toward 'Star Wars,' not campy and not only for Trekkies."

Dauman also touted the success of recently launched music-based video game "Rock Band," saying the company expects to ship 1.3 million copies this quarter, as the game is "flying off the shelves." He added: "We're selling out everything we can make."

He also said Viacom would make a slew of content distribution announcements with digital partners in the coming weeks in the run-up to CES.
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