Steven Spielberg secures Reliance funding
Paramount releasing DW employees from their contractsSteven Spielberg has finalized a deal to secure at least $500 million in funding from Mumbai-based Reliance Big Entertainment.
In a related transaction, JPMorgan Securities will lead a bank loan syndication giving Spielberg another $500 million or more for a total $1 billion-plus to re-create DreamWorks as a private company, allowing it to sever its current ties with Paramount. Documents were finalized Friday after representatives of the various parties reached a handshake agreement on deal terms Thursday night.
In a surprise move, Paramount issued a statement saying that the departing DreamWorks principals were also free to take their employees with them. While the DreamWorks brass had exit clauses in their current contracts, they needed permission to bring other execs or staff along to a reconstituted DreamWorks.
"To facilitate a timely and smooth transition, Paramount has waived certain provisions from the original deal to clear the way for the DreamWorks principals and their employees to join their new company without delay," the studio said.
Spielberg, DreamWorks partner David Geffen and CEO Stacey Snider are expected to quickly tender their resignations from Paramount. A DreamWorks spokesman declined comment on the developments.
The Par statement praised the soon-to-depart trio, saying: "We congratulate Steven, David and Stacey, and wish them well as they start their newest venture. Steven is one of the world's great storytellers and a legend in the motion picture business. It has been an honor working closely with him and the DreamWorks team over the last three years, and we expect to continue our successful collaboration with Steven in the future."
Par also appeared anxious to stress that the loss of the DW creative talent won't crimp its production pipeline too severely.
"The acquisition of DreamWorks has been beneficial both creatively and financially for Paramount and accelerated our strategy of focusing on our world-class franchises and brands," the studio said. "It gave us a solid slate of films to fill out our lineup, a valuable catalog we were able to monetize, and a development pipeline that will bear fruit for us for years to come. The acquisition jump-started our rebuilding plans, which are now well under way."
Par acquired DreamWorks in a $1.6 billion deal finalized in February 2006. Although Par still may distribute films for the new DreamWorks, most industryites believe it more likely that Spielberg and Snider will ink a deal with Universal, where they have maintained offices even while Par employees.