Steven Spielberg has made the rare-for-him move of investing his own money in the latest iteration of his DreamWorks Studios, putting $50 million into the new multimedia company that he named after his first 35mm film, according to two sources familiar with the deal.
The new Amblin Partners represents not only the director’s re-commitment to making “more beautiful music” for the cinema, but to reinvigorating the old Amblin nameplate and, notably, to putting his first funds into DreamWorks since its founding more than two decades ago.
When they formed their “full service” studio in 1994, Spielberg, Jeffrey Katzenberg and David Geffen each tossed in $33 million, effectively seed money that attracted a $500 million investment from Microsoft co-founder Paul Allen. It felt somewhat symmetrical, then, that the new Amblin deal was sealed with the substantial Spielberg offering, along with the much larger $200 million investment from Participant Media. The socially-conscious entertainment company was founded by another tech billionaire, former eBay executive Jeff Skoll.
Skoll made it clear he was thrilled to be doing business with Spielberg, saying the two “share a passion for stories that can truly affect change.” Reliance Group of India, the previous equity partner for live-action DreamWorks (now essentially defunct as a studio, but living on as one of Amblin’s film labels) was pleased enough with the new combination to continue its seven-year-old relationship with Spielberg, one that many in Hollywood believed had run out of gas. And the trio picked up a fourth partner, Entertainment One (eOne) of Canada, which initially discussed a $50 million commitment and added international distribution heft. (eOne’s final contribution remains undisclosed.)
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A spokesperson for Amblin Partners declined to comment.
But two people close to the director said he had been energized by the entire deal, including a shift of the operation’s film distribution from Disney to Universal Pictures, where Spielberg launched some of his most beloved films, including “Jaws” and “Jurassic Park.” Spielberg has maintained offices on the Universal lot and now pushes ahead as part of Amblin Partners, which will release films, television shows and other content under the Amblin, DreamWorks Pictures and Participant Media banners.
“Amblin, the word, the banner, is an emotional thing to him and this whole deal meant a lot to him,” said one person close to the negotiations, who declined to be named while discussing confidential conversations. “He really wanted to be committed to this. And the investment showed that commitment to everyone. It was a great sign to the other partners.”
Another individual familiar with the deal confirmed that Spielberg intended his $50 million infusion to signal his resolve to re-energize DreamWorks as Amblin Partners. Both of those who discussed the investment said that it would have gone ahead, however, even if Spielberg had not made his investment. “He didn’t have to do it. The deal would have happened anyway,” said one.
The new equity investments also helped the partnership secure a new $500 million line of credit through at least half a dozen lenders, led by Comerica Bank and arranged by J.P. Morgan Chase.
Spielberg’s relationship with Disney apparently ended amicably, though there was little love between the partners through most of their seven-year marriage. When the entertainment conglomerate signed in 2009 with DreamWorks Studios, it expected to release half a dozen DreamWorks films a year. Spielberg’s studio ended up delivering as few as two movies a year. And Spielberg felt that the high-minded pics that have become his signature were getting lost, as Disney focused on the outsized productions pumped out by its powerhouse affiliates — Lucasfilm, Pixar and Marvel.
In another wrinkle to the new Amblin deal, not previously disclosed, Disney did not come away from DreamWorks’ departure empty-handed. The Mouse House will retain in its library the 13 films it released for Spielberg’s company, including “Lincoln,” “The Fifth Estate” and the upcoming “The BFG,” Spielberg’s fantasy film based on the book by Roald Dahl.
Disney loaned DreamWorks roughly $100 million, while also agreeing to pay some advertising and marketing costs for the Spielberg venture’s films, during the 2009 launch of the partnership. The total amount outstanding on those loans has not been reported, but two sources said Disney gets to keep the DreamWorks titles as compensation for the money owed. “The pictures they are keeping go to pay off the credit line,” said one of the individuals. While the final value of the films over time can’t be known, the source said: “Disney is not expecting to make money off this. All they are doing is attempting to recoup their debt.”
The Amblin deal seems to be a telling example of the tight finances gripping Hollywood. Even with his marquee name, Spielberg needed roughly 18 months to come to terms with his new partners. The arrangement also gives new life to a company, DreamWorks, that had been floundering in its old guise. It had put out a string of flops (though a hopeful exception could be October’s “Bridge of Spies,” which has grossed $138 million worldwide on a $40 million budget) and seemed to lose its focus. The company also didn’t seem to have a strategy for advancement, as a series of new competitors, including STX and Broad Green Pictures, crowded into the independent space.
One thing remains the same at Amblin Partners as it was at DreamWorks Studios: Founder and creative force Spielberg is free to direct films for either his own company, or other studios, as he sees fit. It remains to be seen whether parting with $50 million of his own funds makes him more likely to play close to home.