Dream still works for Par

Studio believes it can keep Spielberg

Paramount execs believe they still have a shot at keeping Team Spielberg at Paramount.

Top insiders on the Melrose lot say they don't expect Steven Spielberg to decide whether to terminate his deal with Paramount until sometime in the summer, but a window opens May 1 on his ability to bargain with other studios about taking his services elsewhere. Talk around town already is heating up over ramifications of a prospective Spielberg departure.

Paramount execs insist they will retain all rights to dozens of DreamWorks development titles even if Spielberg bolts, though others suggest that Spielberg could make it difficult to see key projects to completion. Similarly, the DreamWorks library is not in immediate jeopardy, but that's only via a long-term licensing agreement after Par sold off actual ownership of the catalog assets to an investment group in March 2006, three months after acquiring them in the $1.6 billion acquisition of DreamWorks.

Meanwhile, DreamWorks chief Stacey Snider would be free to bolt Paramount in the event of a Spielberg exit under a "key man" provision in her contract; likewise DreamWorks chairman David Geffen, who could be key to any effort by Spielberg to create a DreamWorks II elsewhere. About 100 other DreamWorks employees working at Par would not be affected by such executive departures, but they no longer would be called DreamWorks employees.

Par didn't acquire the DreamWorks name in its pricey December 2005 acquisition of the then 11-year-old studio. DreamWorks Animation — which wasn't a part of the deal and remains a separate, publicly traded company — owns the DreamWorks name; its name-licensing agreement with Par would end the day Spielberg ends his stay there.

DWA's distribution deals with Par for theatrical and home video releases runs through 2012. Only a change in the animation studio's controlling interests would allow its early termination.

Insiders at all the companies with interests in the situation emphasize that Spielberg has yet to make his decision on whether to leave Par and suggest that he has yet even to focus in earnest on the matter. The filmmaker is involved in postproduction on "Indiana Jones and the Kingdom of the Crystal Skull," a Spielberg-helmed entry in Par's storied action franchise set for release May 22.

As for his supposed unhappiness at Par, there's also considerable consensus that while things might not have worked out as swimmingly as Spielberg hoped, much has been done to address his most serious misgivings.

His first six months with Par proved a rude awakening, confidants suggest. But issues of money and, well, respect have been dealt with sufficiently to characterize the current situation as not so much Spielberg feeling driven to leave the lot as simply his wanting to take stock of what might be on offer from others. He flirted with Universal and Warner Bros. before the marriage with Par.

Although regularly successful with such DW/Par film releases as "Transformers," "Blades of Glory" and "Disturbia," DreamWorks execs complained early on in their time at Par that the younger studio was being denied sufficient development funds or enough accolades for the projects they did get going.

At one point, Spielberg and company, unhappy with an annual production fund of $300 million, got Par to increase it to $400 million. Then there was the subsequent move that saw Par demand the press to acknowledge all DreamWorks-produced films as DreamWorks/Paramount releases.

Spielberg's contract actually runs until 2010, but he also has the right to terminate it at year's end. In the banking community, there's already talk that Spielberg might look for funding to begin rebuilding DreamWorks for life after Par.

Such a DreamWorks II would no doubt be a smaller business than its progenitor, with a smaller slate and maybe no animation — unless it were to merge with DWA. Insiders at DWA insist that there's been zero discussion of that latter possibility, which is just one of many scenarios spun by industryites on the periphery of the situation.

Handicapping who might offer the most appealing terms to Spielberg puts a lot of stock in the filmmaker's longtime association with Uni, where his personal offices still are located along with those of his Amblin Entertainment shingle. Uni also has a history of working with Spielberg to develop theme-park attractions at Universal Studios.

Of Spielberg-shepherded projects in development at Par, "Transformers 2" is the most important and also the most advanced. The sequel to Michael Bay's $319 million domestic grosser is in preproduction, getting a final script polish and readying for shooting in late spring.

Despite the prospect of an actors strike in the summer — a foreboding that has caused some productions to be put on hold on lots around town — "Transformers 2" is irrevocably scheduled to begin lensing, likely in early June. If actors were to strike, production would focus on the film's extravagant visual effects.

The DW-produced sequel is set for release June 26, 2009, and terms of Spielberg's contract stipulate that it can be marketed as a DW title regardless of his relationship with Par at that point. Yet if there should develop a "Transformers 3" for unspooling two years after that, it might have to go out as a Par release.

Dozens of other important DW development projects include "Lincoln," a film adaptation of Doris Kearns Goodwin's biography that has had Spielberg on board to direct. There's also "Cowboys and Aliens," a graphic novel adaptation being penned by "Transformer" scribes Alex Kurtzman and Robert Orci for a DW/Par/Uni co-production. And just this week, DW attached Ben Stiller to produce and possibly star in graphic novel adaptation "The Return of King Doug" (HR 4/2).