As DreamWorks continues to seek financing for its planned reincarnation as an independent company after its ties to Paramount end later this year, two scenarios for the company’s future are emerging.
One possibility is that DreamWorks will raise $500 million-$600 million in equity, as it has been negotiating with Indian conglom Reliance, plus another $500 million in debt from banks to finance an annual slate of four to six pics.
The other option, biz insiders say, is that it will try to raise $1 billion in equity and another $1 billion in debt to bankroll a slate of eight pics per year.
As of Wednesday, DreamWorks’ much buzzed-about negotiations with Reliance were not completed and, indeed, may have encountered a few sticking points. Some industry observers are wondering if wily negotiator David Geffen isn’t using Reliance as a bargaining chip in yet another high-stakes studio play.
The Associated Press reported this week out of India that DreamWorks is looking to raise as much as $2 billion in equity and debt from Reliance and other sources to fund its return to indie production. The AP said Universal, which has deep ties to DreamWorks principal Steven Spielberg, was among the four or five entities in talks with DreamWorks.
If it realizes the eight-picture scenario, DreamWorks may not contract with just one studio distributor. DreamWorks could allocate its pictures on a case-by-case basis via rent-a-system deals with a low distribution fee, in the manner of Marvel Entertainment or Lucasfilm, which produced Spielberg’s summer blockbuster “Indiana Jones and the Kingdom of the Crystal Skull.”
DreamWorks could arrange distribution on individual pics with both U and Paramount Pictures, its current home. DreamWorks has also talked with 20th Century Fox about distribution. Par insiders say there have been no discussions yet about a future distrib relationship with DreamWorks, which has had a famously rocky relationship with Par execs since Viacom acquired DreamWorks for $1.6 billion in early 2006.
Having its own financing in place would mean that its studio distrib partners would not need to advance coin to DreamWorks — such a need was a source of rancor during Joe Roth’s Revolution deal with Sony Pictures Entertainment.
DreamWorks co-chair and CEO Stacey Snider is understood to be pushing for the larger-slate scenario to ensure the imprint’s status as a major player with a range of projects. A bigger bankroll would also allow Snider and DreamWorks prexy Adam Goodman to continue shepherding the pics they have developed at Paramount for the past 2½ years, including the follow up to last year’s hit “Transformers.” Such an arrangement would avoid a nasty custody battle with Par over the projects.
DreamWorks had no comment on its future plans.