Spielberg Extracting and Reinventing DreamWorks By Year's End
A very interesting set of articles hit Hollywood Reporter yesterday - both were focused on DreamWorks, Spielberg's production company currently nestled within Paramount Pictures. The first, DreamWorks Exit Could Hurt Paramount, nearly states outright that there is some turmoil between DreamWorks and Paramount Pictures and the less-than-expected performance of Indiana Jones and the Kingdom of the Crystal Skull might be the final straw. The second, Steven Spielberg has $1 Billion Dream, outlines Steven Spielberg's plan to reinvent DreamWorks as a completely new production company with a new distribution deal at a studio other than Paramount. However, there is a lot more to this situation than just that - there are contracts, relationships amongst executives, and of course the box office earnings.
As a recap, DreamWorks SKG was actually formed by Steven Spielberg, Jeffrey Katzenberg, and David Geffen, who make up the SKG at the end of the title. Paramount acquired DreamWorks in late 2005 for around $1.6 billion and has a contract with them that runs through 2010. However, Spielberg can apparently terminate the contract at the end of this year via an escape clause and it looks like he will. In preparation for this, Spielberg has not only begun the process of securing $1 billion in funding on his own, but has been shopping around DreamWorks. It was recommended he start a bidding war and now Universal, Disney, Fox and Paramount are all in the running.
This whole situation is a bit hazy and that's most likely because all of the bigwigs involved don't want to publicly discuss what's going on until it's all finished. In the first article, they focus on a separate question. "Spielberg and company now mulling their possible exit from Paramount, there's this more important question: What will Par do for film production if DreamWorks brass bolt the studio?" If Kingdom of the Crystal Skull doesn't hit $300 million, it's likely DreamWorks will have finally had enough. "A failure to reach that benchmark would be construed by many -- fairly or not -- as a significant disappointment and could further undermine the tenuous relationship between Spielberg and company and their current corporate bosses at Paramount."
In turn, Spielberg will leave Paramount entirely and possibly move DreamWorks to another major studio. Even I'm confused by the second article, because it presents two different scenarios. First: "Steven Spielberg aims to raise more than $1 billion in third-party financing to reinvent DreamWorks as a separate company that once again owns the movies it makes." Second: "As for distribution, Spielberg wants to bolt his roost at Paramount for Universal, which wants to land Spielberg and DreamWorks after losing out to Paramount in that quest a couple years ago." Unless I'm mistaken, it actually sounds like he's trying to achieve both of those. Meaning DreamWorks would be its own production company that would own all of its movies, but distribute them through Universal.
All of this is so confusing at the moment, that I'm not sure what else to say. There is even the bit about the name of DreamWorks, which is actually controlled by Jeffrey Katzenberg and DreamWorks Animation. But given he's on the side of Spielberg, he can withdraw rights to the name and give them to Spielberg instead. Either way, this DreamWorks situation will be interesting to follow as it develops over the rest of the year. Some of their biggest films include Saving Private Ryan, American Beauty, Galaxy Quest, Gladiator, Munich, War of the Worlds, Dreamgirls, Disturbia, and so on. DreamWorks is actually a powerful production company and one of the best in the world, considering Spielberg's involvement.
I'm sure Spielberg might not like to hear this, but I think Kingdom of the Crystal Skull is performing worse than expected because the movie itself was worse than expected. Everyone admits that it doesn't even come close to the level of the previous three and that's the problem. Paramount is typically fantastic at marketing successes - just look at Transformers or Iron Man. There are always bad apples that upset bigwigs and this time it was Indiana Jones. But unfortunately I can't say that moving to Universal is really going to help. Universal has recently been one of the most annoying with their marketing (The Incredible Hulk, Wanted) and their films haven't often performed phenomenally. So why move? Who knows what's going on in Spielberg's mind. However, I am very interested in seeing how it all turns out.