Dreamworks, Reliance ADAG in $1.5 billion marriage

It’s the biggest marriage of Bollywood and Hollywood in the history of cinema. Anil Ambani’s Reliance Big Entertainment and Steven Spielberg’s DreamWorks SKG have inked a $1.5 billion deal to set up the new DreamWorks.

“The new age studio will be based in Los Angeles and produce six films per year for the next six years. The rights for all these films across platforms — theatres, DTH, television, DVDs — will remain with Reliance for the territory of India,” a top official in the Reliance ADA Group said.

“Serious negotiations began a few months ago but the deal was finally signed in Los Angeles on Friday. The deal is in part equity and part debt. The debt will be syndicated by JP Morgan Chase. But we can’t talk about the exact debt-equity ratio now,” he said.

According to the deal, DreamWorks will become a 50:50 joint venture of Spielberg, current DreamWorks chief executive Stacey Snider and Anil Ambani’s Reliance Big Entertainment. Snider has also worked as chairman of Universal Pictures.

David Geffen, one of the co-founders of DreamWorks and its current principal, will exit. Spielberg retains the rights to the name DreamWorks and is expected to affix it to the new entity, a news agency report said.

Spielberg is Hollywood’s most successful director of all times. Some of his well-known films are Raiders of the Lost Ark , ET and Jurassic Park . In May at the Cannes Film Festival, Reliance Big Entertainment had announced production deals with some of the biggest names in Hollywood such as Brad Pitt, George Clooney, Tom Hanks, Jim Carrey and Nicholas Cage.

Earlier this year, the company bought over 230 cinemas in USA and another 50 in Malaysia. Some theatres were also taken over in Mauritius and Nepal.

“The company is looking for other opportunities in the movie exhibition sector around the world,” the company official said. At present, Reliance Big Entertainment is producing about 70 films in nine languages across India.

“The deal gives DreamWorks co-founder Steven Spielberg and DreamWorks Chief Executive Stacey Snider the financial support they need to leave Viacom Inc.’s Paramount Pictures and start a new venture. Dreamworks was sold to Viacom in 2006,” the Wall Street Journal website reported on Friday.

“The marriage between some of Hollywood’s biggest names and an Indian conglomerate is less surprising than it seems. The new deal comes in the wake of a financial drought in Hollywood, with the industry looking to foreign investors to replace some of billions of dollars that Wall Street poured into film financing in recent years but has since evaporated with the crumbling credit markets,” the newspaper said.

Above news courtesy: TimesofIndia

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