Spielberg divorces Paramount. Geffen Retires

Paramount And Dreamworks Finalize Separation And Future Joint Projects; David Geffen Ends DW Relationship

I'm told the decision as to the new distributor for DreamWorks 2.0 will be made at the beginning of the week by Steven Spielberg. (Of course, odds are it's going to be Universal.) Below is an advance look at the press release to be issued about the formal separation of Paramount and DreamWorks which was started by Steven Spielberg, David Geffen and Jeffrey Katzenberg. This ends David Geffen's 14 years as a DreamWorks partner and his retirement from the film business now that the DreamWorks principals' resignations were finalized with this agreement. Wow, end of an era! The deal now means that Geffen has engineered his most fervent wish: to give director Steven Spielberg and his studio chief Stacey Snider a big enough warchest of $1.5B worth of indie financing (half from India's Reliance ADA) so they could leave their rocky relationship with Paramount behind and answer only to themselves. As for Katzenberg, he is chief of the publicly traded DreamWorks Animation, and its distribution agreement with Paramount continues. He, too, will not be associated with the new Spielberg- and Snider-run DreamWorks.

After Paramount bought DreamWorks and merged development, the two studios still have 200 active joint projects. My sources tell me this about their status: some 15 to 20 of those projects will now have DreamWorks taking the lead in their development, with Paramount having an option to co-finance and co-distribute pic by pic. Then there are 15 to 20 projects where the situation is flipped so that Paramount will take the lead in their development, with DreamWorks having an option to co-finance and co-distribute pic by pic. The remainder of the new projects will stay at Paramount, and the new DreamWorks will have no continuing association with them. Regarding the Transformers franchise, Spielberg will be attached on a continuing and exclusive basis for Paramount on mutually agreeable terms. DreamWorks is expected to take the majority of their employees with it. One certainty is that DreamWorks COO Jeff Small will follow Snider. Not known is the status of Adam Goodman: I understand that there's a Paramount job for him if he wants it, but contrary to rumors it's not as the replacement for Brad Weston.

So where was all the drama predicted by everyone, including insiders? Deftly avoided. Geffen and Century City entertainment superlawyer Skip Brittenham hashed out all the terms with Viacom general counsel Michael Fricklas and Paramount vice chairman Rob Moore. Brittenham "steered this through pretty quick and calm and productive conversations", according to one source. "Think about it: this separation began two weeks ago, and now there's an actual signed contract." But also Paramount's strategy to tell the DreamWorks principals "to leave immediately" instead of contractually waiting until the end of the year was what facilitated this.

Hollywood, CA (October 5, 2008) -- Paramount Pictures and DreamWorks principals today announced the formalization of their transition agreements as Mr. Spielberg and Ms. Snider depart to form their previously announced new motion pictures company in partnership with Reliance BIG Entertainment. Mr. Geffen, who oversaw the transition for DreamWorks, will not be joining the new company.

As part of the separation agreement, the DreamWorks principals' new company will take the lead on a number of development projects, which Paramount will have the option to co-finance and co-distribute. The majority of existing DreamWorks staff is expected to be offered positions at the new company. All other projects currently in development will remain at Paramount with the opportunity for the Reliance-backed venture to co-finance several projects to which Mr. Spielberg is attached. In addition, Mr. Spielberg will continue to produce the Transformers franchise for Paramount and will also collaborate on three other Paramount films including, "When Worlds Collide."

Brad Grey, Chairman and CEO of Paramount Pictures said, "We have had a great run with the DreamWorks team both creatively and financially. In particular, it has been a true honor working closely with a storyteller of Steven's talent and stature. We are also grateful to David and Stacey for their exceptional leadership, creative talent and many contributions to our partnership over the past few years. We look forward to building on our joint successes as Paramount plans for the future."

Mr. Spielberg added, "Brad is a friend and I am pleased to be able to continue to work with him and his team with whom we have shared many past successes. We have enjoyed a productive creative and business collaboration with Brad, Paramount and Viacom over the past few years and are enthusiastic about extending the relationship for many years to come. And I have a very special thanks to David Geffen for his far reaching vision that has made it possible for me to steer this new course. His advice and wisdom have always been right on the money. He is a friend for life."

"We are grateful to Brad, Rob and the entire Paramount team for their generous support and constant creativity. We are very proud of the films we produced and marketed together. We're excited about this new venture which wouldn't have been possible without the business genius and loyalty of David Geffen," said Stacey Snider, Co-chairman and CEO of DreamWorks Studios.

Rob Moore, Vice Chairman Paramount Pictures added, "It has been rewarding to work with the DreamWorks team and I'm gratified we'll have the opportunity to continue to work together. We wish them the best as they launch their new venture."

About DreamWorks Studios
DreamWorks Studios was formed in 1994 by Steven Spielberg, Jeffrey Katzenberg, and David Geffen. The company won three consecutive Best Picture Academy Awards with "American Beauty," "Gladiator," and "A Beautiful Mind" (both co-produced with Universal). Among the company's other successes have been such films as "Saving Private Ryan" (co-produced with Paramount), "The Ring," "Minority Report" (co-produced with 20th Century Fox), "War of the Worlds," "Dreamgirls," and "Transformers" (all co-produced with Paramount). Stacey Snider joined the company in 2006 as Co-Chairman and CEO. Snider has overseen the company's business strategy as well as the creative and financial aspects of all film development and production. Among its upcoming productions are "The Soloist," "Revolutionary Road," "The Lovely Bones," and "Transformers: Revenge of the Fallen."

About Paramount Pictures Corporation
Paramount Pictures Corporation (PPC), a global producer and distributor of filmed entertainment, is a unit of Viacom (NYSE: VIA, VIA.B), a leading content company with prominent and respected film, television and digital entertainment brands. The company's labels include Paramount Pictures, Paramount Vantage, Paramount Classics, MTV Films, Nickelodeon Movies and DreamWorks Studios. PPC operations also include Paramount Digital Entertainment, Paramount Famous Productions, Paramount Home Entertainment, Paramount Pictures International, Paramount Licensing Inc., Paramount Studio Group, and Worldwide Television Distribution.

About Reliance BIG Entertainment
Reliance BIG Entertainment and its affiliates represent the largest integrated media and entertainment eco-system in India.

Key initiatives include: Movies (Hollywood and Indian), Animation, Music, Home Video/DVD, Multiplexes across, India, the US, and Asia, Broadcasting, Sports, Gaming, Internet and mobile portals, with direct opportunities in delivery across all emerging digital distribution platforms: digital cinema, IPTV, DTH and Mobile TV.

Reliance BIG Pictures, a division of Reliance BIG Entertainment, is the most prolific producer of Indian films in all major languages, with a slate of nearly 100 films to be completed in the next 3 years.

In May 2008, Reliance BIG Pictures announced separate development deals with Nicolas Cage's Saturn Productions, Jim Carrey's JC 23 Entertainment, George Clooney's Smokehouse Productions, Chris Columbus' 1492 Pictures, Tom Hanks' Playtone Productions, Brad Pitt's Plan B Entertainment, and Jay Roach's Everyman Pictures. More development deals are planned.