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Spielberg Wants DreamWorks On Its Own Again

Steven Spielberg is reportedly trying to raise more than $1 billion in third-party financing to reinvent DreamWorks as a separate company, once again owning the movies it makes, per THE HOLLYWOOD REPORTER.

For distribution, Spielberg wants to roost at Universal, which in turn wants to land Spielberg and DreamWorks after losing out to Paramount in that quest several years ago. However, on recommendation from his advisors, Spielberg has allowed a bidding war to begin among studios for the rights to distribute future DreamWorks movies. Those suitors include Paramount, Universal, Disney and Fox.

Warner Bros. has sat out so far despite previous expectations that the studio would seek a relationship with DreamWorks if Spielberg and company left Paramount.

The industry is betting Spielberg will flee Paramount, with the related question of whether where he and DreamWorks land is a simple matter of sufficiently attractive terms to get Spielberg, chief Stacey Snider and their brand.

"Stacey is the next generation, and Steven is very committed to her," said one participant in DreamWorks strategy meetings.

Spielberg's contract with Paramount runs until 2010, but he can terminate it by the end of this year. Snider and DreamWorks chairman David Geffen have similar escape clauses in their deals, while 100 other DreamWorks employees would theoretically be unaffected by departures among the top execs.

Spielberg wields considerable leverage in any exit negotiations with Paramount and could insist on taking additional execs with him as he reconstructs DreamWorks elsewhere. Paramount owns TRANSFORMERS and other films produced by DreamWorks while at the studio, Spielberg's rights regarding involvement on sequels could trigger negotiations over which films he brings with him and which would remain under Paramount.

A window in Spielberg's personal contract with Paramount opened up May 1, allowing him to discuss potential offers from rival studios. Since then, Spielberg, Geffen and attorney Skip Brittenham have held meetings with several prospective studios and financiers.

Still, there is the argument from Paramount executives that early ill-will between DreamWorks top brass and the Paramount overlords has since been smoothed over and Paramount has increased DreamWorks' production funding and credit on releases during the course of the former's residency on the lot.

Barring a complete revision of his current arrangement at Paramount, leaving is the only option Spielberg has to stake actual ownership in his future films. He participated in just that throught he original DreamWorks SKG, but Spielberg at Paramount is essentially a producer and director of films owned by others, backend deals on individual films notwithstanding.

Even the DreamWorks name is controlled by neither Spielberg nor Paramount but by Jeffrey Katzenberg's DreamWorks Animation. If Spielberg were to exit Paramount, DWA could withdraw the rights to the name from Paramount and presumably grant them to Spielberg. DWA's contract with Paramount runs through 2012.

Apparently, Spielberg's hunt for financing could lead to DreamWorks securing a bank facility to fund production as well as private-equity investment. But this time around, it's likely that the latter would be much more limited than the one-time majority stake in DreamWorks SKG by Microsoft co-founder Paul Allen.

DWA's going public in 2004 and DreamWorks' $1.6 billion sale to Paramount a year later were both prompted by Allen's desire to cash out his interest in DreamWorks.

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