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It was good melodrama. It was deft negotiating. It was also sweet revenge.

Now that DreamWorks has divorced Universal and hooked up with Paramount, however, certain questions present themselves.

  • Why wasn’t DreamWorks over the years able to build the independent distribution and production empire that its founders envisioned?

Arguably, their initial blueprint was too cosmic — an instant major with its own expansive physical studio. The upshot was enormous overhead, but confused priorities. After the initial hubris, it became clear that David Geffen would remain a master negotiator, not an operator; that Spielberg intended to pursue many of his own projects elsewhere and that the always animated Jeffrey Katzenberg’s key strength remained in animation.

All of which leaves open the question of who will eventually run DreamWorks day-to-day now that it is part of Paramount. Stay tuned.

  • Does General Electric feel pangs of parental neglect in letting the deal slip away from Universal?

    In backing off its initial offer for DreamWorks, GE underestimated the psychological value of the DreamWorks link and the level of petulance of David Geffen.

To be sure, GE’s hierarchs had become fretful about the box office performance of both DreamWorks’ and Universal’s recent releases. But, to put it in Vegas terms, GE wanted a seat at the table — it wasn’t forced on them. Owning a major studio requires not only deep pockets but also open pockets.

  • Will Paramount coalesce into a viable studio?

Clearly there have been start-up problems for the new regime . A studio without a Christmas release is not a happy studio. The instant demise of MTV’s “Aeon Flux” (did they really have to wave the red flag by canceling critics’ screenings?) signaled problems of inexperience.

But Viacom’s Tom Freston and Brad Grey now have some remarkable pieces to fit into their corporate puzzle (plus a new international sales operation to nurture in which Katzenberg will be a key strategist). Their vaunted people skills will surely be put to the test.

Spin game

GE’s balky decisionmaking focused attention once again on this question: Can mega-companies move with sufficient alacrity and focus? A rising number of voices are calling for split-ups of corporate monoliths. Sumner Redstone divvied up Viacom. Steve Case and Carl Icahn want to divide Time Warner.

My first instructor in corporate gamesmanship was Charles Bluhdorn, one of the early conglomerators who created Gulf & Western (which later bought Paramount and changed its name). Bluhdorn loved big companies because they could devour little ones (the only form of growth he understood). But he also liked spinning off little companies when his big entities got into trouble.

Thus when Paramount released a major turkey, the rights to that film would magically disappear into one of Bluhdorn’s instant offshoots. The splotch of red ink would vanish from Paramount’s books. Under this approach, “Aeon Flux” and “Elizabethtown” would already have vaporized and Paramount’s slate would be pristine.

Inevitably, the SEC began to frown on Bluhdorn’s mercurial machinations and the Austrian-born financier had to turn to yet a new arsenal of tactics.

Were he alive today, Bluhdorn would likely have approved of the Viacom split and would favor dividing up Time Warner. Smaller entities can move faster and are under less scrutiny, he would argue. And there are plenty of movies around today that Bluhdorn’s successors would like to see vanish from their books.