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With Funding From Universal, Steven Spielberg’s Amblin Looks for Reinvention

Steven Spielberg cleared the way for the latest iteration of DreamWorks Studios a year ago, shifting distribution from Disney to Universal and announcing new investment from Jeff Skoll’s Participant Media, Reliance Entertainment of India, and Entertainment One of Canada.

That financing influx, along with Spielberg’s unusual move to chip in $50 million of his own money and the adoption of a new name, Amblin Partners, signaled the start of an attempted reinvention of the company the renowned director founded nearly a quarter century ago with David Geffen and Jeffrey Katzenberg.

With an additional equity investment last week from Universal (amounting to roughly a 4% stake in the new operation) Amblin Partners has its financial house in order. That makes 2017 the year the company needs to do the same with its creative house — delivering more hits more consistently than DreamWorks did in its spotty recent history.

The plan is for Amblin, which is run by CEO Michael Wright and president and co-CEO Jeff Small, to make movies under three labels: DreamWorks for adult-themed films; Amblin for family-friendly, PG-13-style fare; and Participant Media for films that speak to that company’s social-justice imperatives.

“This new Universal investment is a way to deepen the partnership and to leverage a little bit more the resources of the big studio, not only in film, but in television and digital,” says Tuna Amobi, an analyst with S&P Global. “It’s not inconceivable that their stake would grow over time … and you can’t even rule out an acquisition down the road. This step is very preliminary.”

DreamWorks has been remolded multiple times since its 1994 founding by Spielberg and his mogul pals. It once had ambitions of becoming a full-fledged studio with its own lot (originally planned for Playa Vista, Calif., near Marina del Rey) before its animation operation was spun off into a separate company (headed by Katzenberg) in 2004. The live-action operation was sold to Viacom in 2006.

By 2008, live-action DreamWorks used financing from Reliance to again strike out on its own — though Spielberg’s operation has struggled ever since to develop a distinct identity and a consistently winning slate of films. (In iteration 4.0, Katzenberg sold DreamWorks Animation last year to Comcast for $3.8 billion.)

The remaining, live-action DreamWorks hoped for a hit last summer with Spielberg’s “The BFG.” Though the sweet, deliberate Roald Dahl tale caught on with some critics, the public was not buying, at least in big numbers. The film brought in $183 million worldwide on an estimated production budget of $140 million, with untold marketing costs assuring that the giant project was a giant money-loser.

Return on investment improved for a pair of subsequent films: The psychological thriller “The Girl on the Train” took in enough worldwide, $173 million, to expect profitability. It was followed by the rompy, raunchy “Office Christmas Party,” which also could have a path into the black, with a $114 million worldwide take.

But the latest release, “A Dog’s Purpose,” hit an unexpected bump when the filmmakers were accused of mistreating a German shepherd that appeared in the film. A debunking of that report by humane officials got less attention, and the movie has made $58 million worldwide. One individual close to the company says Amblin had considered the film to be a “slam dunk” that was in position to do considerably more business. Though panned by many critics, audiences approved of the cuddly love-fest with man’s best friend, resulting in an “A” Cinemascore.

“It’s just one of those things,” says the source, who asked not to be named. An insider says the film continued to deliver solidly through its third weekend, and Amblin hopes to make up for lost ground.

Spielberg’s company places its next bet on “Ghost in the Shell,” with Scarlett Johansson as a cyborg policewoman on the hunt for a dangerous computer hacker. Directed by Rupert Sanders (“Snow White and the Huntsman”) the film predated the new Universal deal and is being released by Paramount.

The financial partnership with Universal had been discussed inside DreamWorks for some time, and the closing of that deal is a nice milestone for Amblin, says the source, who adds, “But there hasn’t been a big hit in a very long time. That’s what’s on everyone’s mind. That’s what everyone is waiting for.”

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