DreamWorks Is in Talks to Join NBC

[daman]

Discontented, DreamWorks Is in Talks to Join NBC
http://www.nytimes.com/2007/11/17/bu...reamworks.html

By SHARON WAXMAN and BROOKS BARNES
Published: November 17, 2007

LOS ANGELES, Nov. 16 — Seeking a way out of an acrimonious relationship at Paramount, the DreamWorks principals — two Hollywood heavyweights, David Geffen and Steven Spielberg — have been negotiating to move their operation to NBC Universal, according to people close to the talks. But negotiations have hit a wall over financing.

Discussions have been going on since late summer, according to these people, who asked not to be identified because of the delicate nature of the negotiations.

Mr. Geffen is set to meet next week with Jeffrey R. Immelt, the chairman of General Electric, which owns NBC Universal, these people said. Jeff Zucker, the president and chief executive of NBC Universal, and Ron Meyer, the president of Universal Studios, are also scheduled to attend.

Although NBC Universal is interested, it has countered by asking DreamWorks to find outside financing for its movies, which Universal could then distribute, according to people with knowledge of the talks. For its part, DreamWorks wants to be fully financed and based at a studio.

Any agreement would represent something of a homecoming: Mr. Spielberg spent three decades of his career on the Universal lot and still maintains his production office there, despite his company having been bought by Paramount. Universal also financed movies with DreamWorks before the Paramount deal.

Mr. Geffen is seeking $600 million to $700 million a year, these people said, to make eight movies a year and to cover overhead costs for Mr. Spielberg; Stacey Snider, the chief executive of DreamWorks; and other executives. But someone close to DreamWorks said that figure was far too high and that the partners were seeking the same money — $400 million — they receive from Paramount through a deal struck in late 2005.

In a flurry of contacts with Hollywood studios in the last couple of months, DreamWorks has sought an alternative to the visibly unhappy relationship with Paramount and its corporate owner, Viacom. But the dance partners may be few: DreamWorks is likely too expensive and too much of a headache for widespread interest, analysts say.

“These DreamWorks guys are the A-Rods of the movie business,” said Harold L. Vogel, an independent media analyst. “They have megawatt personalities and great track records, but almost nobody can afford to pay them.”

Mr. Geffen may have a narrow space in which to maneuver the future fortunes of DreamWorks. One other major studio, Warner Brothers, has already rebuffed the idea of working with the boutique studio, according to a senior executive at Time Warner. And an executive at Disney said that it was not interested.

Two senior executives at the News Corporation, which owns the Fox franchise, said there had been a meeting with DreamWorks but that no negotiations were in progress. And at Viacom, executives said that there were no current talks with DreamWorks. People close to DreamWorks said the company would consider a deal only with Fox or Universal.

Because of the stature and influence of the filmmakers involved, none of the company executives would speak on the record. In several e-mail messages, Mr. Geffen said he would not talk about any negotiations. Carl Folta, a spokesman for Viacom, also declined to comment.

Any move by DreamWorks holds the potential for a significant ripple effect through the entertainment industry because of the clout of Mr. Spielberg, who is finishing post-production work on “Indiana Jones and the Kingdom of the Crystal Skull” for Paramount. As Hollywood’s leading filmmaking talent, Mr. Spielberg has first pick of the best material on offer and draws other talent in his wake.

He has made clear that he would like to see a deal with NBC Universal, people involved in the negotiations say.

When Paramount snapped up DreamWorks almost two years ago for $1.6 billion, much of Hollywood was caught off-guard, having expected NBC Universal to win the bidding. But when G.E. lowered its offer by $100 million, Mr. Geffen cut a deal with Viacom.

As part of that agreement, DreamWorks principals agreed to three-year contracts. The contract for Mr. Spielberg is not up for another year, but Mr. Geffen has a clause that allows him to announce his departure on Jan. 1, 2008, according to Viacom executives.

(DreamWorks Animation, run by Jeffrey Katzenberg, is an independent company with a deal to have its movies distributed by Paramount until 2012. It would be unaffected by the current talks.) DreamWorks has been a crucial pillar of Paramount’s success this year. DreamWorks was a producer of both “Transformers,” which took in $702 million worldwide, and “Blades of Glory,” which took in $144 million.

Relations between DreamWorks and Paramount have been tense since this spring over the perception within DreamWorks that Paramount and Viacom, its corporate parent, have not been sufficiently appreciative. Seeking to smooth things over, the studio bowed to DreamWorks’ demand that its movies be labeled “DreamWorks-Paramount,” rather than just “Paramount.”

Matters do not appear to have improved, with the publication this month of a lengthy Vanity Fair article in which Mr. Geffen was critical of Viacom and its chief executive, Sumner M. Redstone.

“Redstone, he is accustomed to bullying people. And I will not be bullied,” Mr. Geffen said in the article. “There is no fight I will run from. I am absolutely unafraid of Sumner Redstone.” He added: “It is my job to look out for Steven Spielberg and Jeffrey Katzenberg and our employees and the people we are in business with. I chose to sell this company to Paramount. It has turned out to be a poor choice.”

Viacom appears to have had enough of the unruly DreamWorks unit. At a recent investment conference, Philippe P. Dauman, the chief executive, said Viacom would do just fine without Mr. Spielberg.

“The financial impact to Paramount first and especially to Viacom over all would be completely immaterial in the event somebody shows up to help them start a studio from scratch,” he said.

The comment was taken as an insult by the DreamWorks founders and prompted Mr. Katzenberg to defend Mr. Spielberg as a “national treasure.”

[The Guardian]

Interesting, but would there be anything about Blu-ray in the deal I wonder?

[m_tyson]

Originally Posted by The Guardian

Interesting, but would there be anything about Blu-ray in the deal I wonder?

C'mon Fox!

[nails]

If they join universal nothing will really change on the HD front because Universal is with HD-DVD. Of course they could make new rules for distribution as part of the deal. Or they could even force Universal to change sides as part of the deal.

[atomik kinder]

I don't know why I keep thinking it, but wouldn't Dreamworks and Disney be a good combination? I don't know why they never approached them.

[Toony]

Originally Posted by nails

Or they could even force Universal to change sides as part of the deal.

Thats not how these things work.

[glenn22]

While interesting, I don't think it affects Blu-ray in any way. All the movies made with Paramount would still be distributed by Paramount, including the new Indiana. Only his new movies would be affected by the move and Universal is HD-DVD exclusive too.

[blu-rayfan101]

Should Disney get in on this?

[savage1984]

Very interesting... Except Universal is still with HD DVD. Does anyone know when that contract runs up?

[MasterXeus]

Originally Posted by blu-rayfan101

Should Disney get in on this?

Both Warner Brothers and Disney are not interested.

Plus...

People close to DreamWorks said the company would consider a deal only with Fox or Universal.

[Evan702]

Git 'er done, Fox!

[w_tanoto]

don't get it. moving to another HD DVD supporter? or Spielberg know something that we don't (Uni's going neutral)

[sj001]

'twould be great if News Corporation would snap them up.