Hollywood (CA) – Paramount Pictures and Dreamworks formally announced their separation and what is expected to be the beginning of a potential power shift in Hollywood. Steven Spielberg and Stacey Snider will form a new movie company in an alliance with India’s Reliance BIG Entertainment. David Geffen will not join the new movie company.
Under the terms of the agreement, Snider and Spielberg, who is the highest-grossing director in Hollywood history, will take the lead on a number of development projects, which Paramount will have the option to co-finance and co-distribute.
a move that allows the DreamWorks studio co-founded by director Steven Spielberg to tie up with Reliance ADA Group of India to start a new film company. All other projects currently in development will remain at Paramount with the opportunity for the Reliance-backed venture to co-finance several projects. Spielberg will also continue to produce the Transformers franchise for Paramount and will also collaborate on three other Paramount films including, “When Worlds Collide.”
While the separation talks between Paramount and especially David Geffen have been reported for some time, the actual separation comes somewhat as a surprise. Paramount acquired Dreamworks about two years ago for $1.6 billion. Financial deals of the separation were not disclosed, but Spielberg and Co. as well as Reliance are believed to have paid Paramount about $1.5 billion to buy Dreamworks.
Dreamworks was formed in 1994 by Steven Spielberg, Jeffrey Katzenberg, and David Geffen. The company won three Best Picture Academy Awards with “American Beauty,” “Gladiator,” and “A Beautiful Mind” (both co-produced with Universal). Other successes include “Saving Private Ryan”, “The Ring,” “Minority Report, “War of the Worlds,” “Dreamgirls,” and “Transformers”. Upcoming Dreamworks movies include “The Soloist,” “Revolutionary Road,” “The Lovely Bones,” and “Transformers: Revenge of the Fallen.”
Stacey Snider joined the company in 2006 as co-chairman and CEO. Snider has overseen the company’s business strategy and is expected to head the new movie production company as well.
Reliance BIG Entertainment claims to be the largest media and entertainment conglomerate in India. The company said it plans to complete “nearly 100 films” in the next three years. In May 2008, Reliance announced separate development deals with Nicolas Cage’s Saturn Productions, Jim Carrey’s JC 23 Entertainment, George Clooney’s Smokehouse Productions, Chris Columbus’ 1492 Pictures, Tom Hanks’ Playtone Productions, Brad Pitt’s Plan B Entertainment and Jay Roach’s Everyman Pictures.