Paramount, DreamWorks split with no grief
Companies agree to divide up about 200 projectsDivorce proceedings between the DreamWorks principals and Paramount Pictures took an unexpectedly amicable turn Sunday as the two sides announced a separation agreement under which they are dividing up about 200 projects in the DreamWorks development pipeline.
With DreamWorks founder Steven Spielberg and co-chairman/CEO Stacey Snider in the process of forming a new company with $550 million in equity from India's Reliance BIG Entertainment and another $700 million that JPMorgan Chase & Co. is assembling, Paramount could have claimed for itself all of the DreamWorks projects in development, since the Viacom unit has owned DreamWorks since 2006.
Instead -- like divorcing parents who maintain civil relations for the sake of the kids -- DreamWorks and Paramount plan to remain partners on 30-40 projects, while, separately, Spielberg will be involved as producer in another four Paramount projects, including the "Transformers" sequel that will be released next summer.
The pact calls for DreamWorks to take the lead in developing 15-20 of those projects, which Paramount will have the option to co-finance and co-distribute. Such Spielberg passion projects as "Lincoln," "Trial of the Chicago Seven" and "The 39 Clues" are expected to fall within that group, although specific titles were not announced Sunday pending notification of the filmmakers involved.
Paramount, in turn, will take the lead in developing another 15-20 projects that DreamWorks could come aboard to co-finance and co-distribute.
In the case of the shared projects, DreamWorks' new distributor -- the betting is a deal with Universal could be announced as early as this week -- will take domestic release with Paramount handling international, or vice versa, with the decision made on a film-by-film basis.
Separately, Spielberg, an executive producer on the first "Transformers," will continue as a producer on that franchise as well as three other Paramount films, including the sci-fi movie "When Worlds Collide."
Additionally, Paramount has the option to come in as a co-financier on any movie that the new DreamWorks greenlights during its first year.
No decisions have been made regarding "Tintin," which Spielberg is planning to produce and direct. Paramount had put a $130 million offer, including unspecified financial terms, on the table, but that discussion was set aside while the new arrangement was worked out.
Two weeks ago, Paramount released current DreamWorks staffers, who number about 150, from their contracts, and about 90% of them are now expected to move over to the new company, which won't have to start up with a bare development cupboard.
One exception is production head Adam Goodman. Paramount is planning to offer him a position. Ongoing rumors to the contrary, he won't be asked to replace Paramount's own production president Brad Weston, but would play a role overseeing all the DreamWorks projects left behind at Paramount.
Most of the producers who currently have deals with old DreamWorks are likely to move to new DreamWorks, but Paramount wants to keep the Montecito Picture Co., run by Ivan Reitman and Tom Pollock, within its fold, since it has a number of upcoming films on the Paramount calendar -- "Hotel for Dogs," the horror-thriller "The Uninvited" and the comedy "I Love You, Man."
Although Hollywood's chattering class had predicted that dividing up the project stockpile would lead to prolonged and contentious negotiations, the actual resolution came relatively swiftly once the DreanWorks principals announced their departure.
During the past two weeks, Viacom's general counsel Michael Fricklas and Paramount vice chairman Rob Moore worked out the details with DreamWorks founder David Geffen and attorney Skip Brittenham, with a final sign-off coming Friday night.
The settlement jumpstarts the new DreamWorks' production efforts, while also assuring that Spielberg retains a number which he didn't want to surrender. It also keeps product flowing through Paramount's distribution pipeline and enables the studio to call upon Spielberg's services on select titles.
The deal marks something of a finale for Geffen in terms of his involvement in DreamWorks since he will not be part of the new company.
Although relations between Paramount and the DreamWorks team were frequently strained during their brief marriage, the official announcement was accompanied by a round of complimentary testimonials.
Lauding Spielberg's "talent and stature" and Snider and Geffen's "exceptional leadership, creative talent and many contributions to our partnership," Paramount chairman Brad Grey said he was looking "forward to building on our joint successes as Paramount plans for the future."
Spielberg said the DreamWorks execs had "enjoyed a productive creative and business collaboration with Brad, Paramount and Viacom over the past few years and are enthusiastic about extending the relationship for many years to come." He also acknowledged his debt to Geffen, thanking him "for his far reaching vision that has made it possible for me to steer this new course. His advice and wisdom have always been right on the money. He is a friend for life."