October 6, 2008

Spielberg’s New Deal With Paramount

It may have sounded like saber-rattling. But the year-old war between Viacom's (VIAB) Paramount Pictures and superstar director Steven Spielberg ended pretty quickly with a truce about his impending departure. Only three weeks after Spielberg teamed up with India's Reliance BIG Entertainment to set up his own studio, he has agreed to make an as-yet-undetermined number of films for his old studio as well.

The deal, to be announced on Oct. 6, will finalize the separation agreement between Viacom, and Spielberg and Stacey Snider, his production partner and CEO of DreamWorks LLC. Dealmaker David Geffen, who served as DreamWorks' chairman during its time at Paramount, resigned from that job and is not joining the new company Spielberg and Snider are expected to establish with a studio other than Paramount.

As part of the separation agreement with Paramount, Spielberg is still doing some projects with the studio. Spielberg will continue to produce four films for Paramount, including a sequel to the blockbuster Transformers franchise and the upcoming sci-fi film When Worlds Collide. Other projects to which Spielberg is "attached" will be produced with others in his place, though his Reliance-funded company would have the option to co-finance them.

The "new" DreamWorks company that Spielberg and Snider will create with Reliance's money will make an unspecified number of non-Spielberg projects currently in development at Paramount. Paramount will have the option to co-finance and co-distribute these new films.

Spielberg's new company is expected to sign a new distribution deal with NBC Universal (GE), where Spielberg's offices have been for more than 30 years. Fox (NWS) is considered a long shot. A decision is expected within the month.