DreamWorks and Reliance close deal

Chris Forrester, on 21-09-2008

There may be troubles ahead for the freshly closed DreamWorks SKG and Reliance partnership deal, which saw Reliance put $500m into D-SKG. The problems will not come from India’s Reliance outfit, but from D-SKG’s former partner, Paramount.

Paramount is playing the hardest of hardball games with DreamWorks. According to trade newspaper Variety, the wrangling over joint assets is “ugly, even by Hollywood standards”. Indeed, this break-up of assets might see the two studio giants end up in the (divorce) courts with some predicting endless litigation ahead.

In essence Paramount is claiming the entire current production manifest, but is walking away from projects that will still need investment, but wants to hold onto everything that’s been made and more or less paid for. Spielberg-backed projects like Lincoln and 3D animated feature TinTin are very much the focus of the squabble.

Paramount was also underwriting many of D-SKG’s staff costs and overheads, said to be worth $1m a week. Now that the new partnership has to fund these costs some suggest that belts might have to be tightened and staff laid off.