Steven Spielberg – Dreamworks close to deal with India Firm

As we previously reported here, Steven Speilberg wants the studio he helped build, Dreamworks, to once again be fully independent and own the films it puts out. However he needs $1 billion in third-party financing to make that dream a reality. Looks like one of India’s biggest entertainment conglomerates is going to come up with half of the $1 billion Steven Spielberg and his Dreamworks friends need for independence.

According to the Wall Street Journal, The Mumbai, India, based Reliance ADA Group is in ‘serious talks’ to provide Dreamworks with $500 million to $600 million in equity. The $1 billion would give the new venture enough money to make a slate of about six films a year. The company would then choose a studio to distribute the films, which is still an open question. General Electric Co.’s Universal Pictures, where Mr. Spielberg began his career, is thought to be the director’s preference to release his future works, but News Corp.’s Twentieth Century Fox also is thought to be a serious contender.

The story also seems to confirm the ill feelings that have brewed between Dreamworks and the big studio it’s basically trying to finance its freedom from, Paramount.

Spielberg reportedly complained privately about Paramount taking credit for DreamWorks movies. Speilberg and partners supposedly also felt they were not being afforded the appropriate level of respect from Paramount boss Brad Grey and the big guys at Paramount’s parent company, Viacom.

The Wall Street Journal says that tensions between the two sides came to a head at the end of 2006 over the flick Dreamgirls.

The other major Dreamworks partner, music man David Geffen, was heavily invested in the musical, having shepherded it from the stage to the big screen. Geffen supposedly took enormous offense because he felt Brad Grey seemed to take credit for the movie at several public events.

To top it all off the head of Viacom told an investor conference that Dreamworks’ departure would be “completely immaterial” to Viacom.

Caught in the middle is the third Dreamworks principal partner Jeffry Katzenberg who runs DreamWorks Animation SKG, (“Shrek” and “Kung Fu Panda) which also distributes its films through Paramount. In a deal that runs for several more years, Katzenberg would be bound to stay at Paramont after his partners Geffen and Speilberg leave.