It took a while.
And it was humbling indeed for the most powerful filmmaker in Hollywood, Steven Spielberg, to put his lofty ambitions on hold for the millions he needed for his new indie-standalone, DreamWorks. At year’s end, the studio and Universal Pictures had negotiated a deal to distribute five to six movies for an 8% distribution fee a year. But that deal went by the wayside as the financial crisis worsened and DreamWorks struggled to acquire the bank portion of the leveraged deal with their global partner, India’s Reliance Big Entertainment. DreamWorks wound up closing their six-picture distribution deal at Walt Disney Studios, which expects to release their first DreamWorks film with a Touchstone label in 2010. Reliance Big Entertainment will retain distribution rights in India.
But finally J.P Morgan, amid the most severe global economic crisis since the Depression, raised the money that Reliance required in order to match funds. Reliance was originally planning to put up $500 million in equity for DreamWorks against an expected $750 million in loans with the ultimate aim of funding a slate of 36 movies over a period of seven years. Anil Dhirubhai Ambani, chairman of the Reliance Anil Dhirubhai Ambani Group, the parent company of Reliance Big Entertainment and Reliance BIG Pictures, finally announced–along with Spielberg and principal partner Stacey Snider–the completion of the first phase of funding, J.P. Morgan’s syndication of approximately $325 million of senior debt which Reliance Big Entertainment is matching with its equity commitment. As promised, distributor Disney will also extend a $175 million loan to DreamWorks. That’s a total of $825 million.
The first lenders in this fund include Bank of America, City National Bank, Wells Fargo, Comerica, Union Bank of California, SunTrust, California Bank & Trust, and Israel Discount Bank.
The first DreamWorks films expected to go out under the Disney Touchstone banner are Spielberg’s remake of Harvey, about a man and a six-foot rabbit, which starts filming at the beginning of the year–without Tom Hanks, who was leery of comparisons with the original’s James Stewart. (UPDATE: Fox is co-financing and will share distribution rights with Disney.) First to go into production this October for Paramount release will be the Paramount/Spyglass/Parkes-MacDonald co-production Dinner for Schmucks, a $75 million comedy to be directed by Jay Roach starring Steve Carell and Paul Rudd. Other films ramping up include 39 Clues, a possible family franchise based on a series of Scholastic books, and presidential thriller Motorcade, which has no elements yet attached.
The new DreamWorks is a smaller entity run by Snider and president and COO Jeff Small, who came over to the company soon after Snider did. Gone from the family are Montecito, which closed its deal with Paramount, Red Hour, which went to Fox (although Chicago Seven may involve Ben Stiller directing), and former production president Adam Goodman, who survived the managerial maelstrom at Paramount to come out on top. His former lieutenants Holly Bario and Mark Sourian are co-presidents of DreamWorks production. Producers Nina Jacobson and Parkes/MacDonald are still on board, as are writer-producers Alex Kurtzman and Roberto Orci, who are developing Cowboys and Aliens.
With the money situation cleared up for DreamWorks, it’s full steam ahead.
Joining Snider and Spielberg on DreamWorks’ Board of Directors on behalf of the Reliance ADA Group are Amitabh Jhunjhunwala, Vice Chairman, Reliance Capital, and J.P. Morgan Entertainment Advisor Alan J. Levine. Other key players in this deal were Reliance counsel Schuyler Moore (Stroock & Stroock & Lavan), DreamWorks lawyers Skip Brittenham (Ziffren Brittenham LLP, Bruce Ramer), Harold Brown (Gang, Tyre, Ramer & Brown) and Cravath, Swaine & Moore, and J.P. Morgan Securities’ John Miller and David Shaheen.