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Spielberg’s studio nears funds deal with Ambani

Spielberg’s studio nears funds deal with Ambani
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First Published: Fri, Aug 08 2008. 11 46 PM IST

New deal: Steven Spielberg
New deal: Steven Spielberg
Updated: Fri, Aug 08 2008. 11 46 PM IST
Los Angeles: DreamWorks SKG is near an agreement to get $550 million (Rs2,321 crore) in funding from Indian billionaire Anil Ambani, allowing Steven Spielberg’s film studio to split from Viacom Inc., according to a person with knowledge of the talks.
New deal: Steven Spielberg
A deal may be reached as soon as next week, said the person, who declined to be identified because the agreement isn’t final. The studio will borrow $400 million and no additional outside equity will be required, the person said on Thursday.
The investment from Reliance-Anil Dhirubhai Ambani Group (R-Adag) would give Spielberg, 61, the backing he needs to leave Viacom, an entertainment content company, as soon as November.
DreamWorks partners Spielberg, David Geffen and Jeffrey Katzenberg sold the studio to Viacom for $1.6 billion in 2006. The Saving Private Ryan director has clashed with Brad Grey, who heads Viacom’s Paramount studio.
Kelly McAndrew, a spokeswoman for New York-based Viacom, declined to comment on Thursday. Paramount spokeswoman Patti Rockenwagner didn’t return messages seeking comment. DreamWorks spokesman Chip Sullivan said the studio had no comment.
“We have no comment,” Amit Khanna, chairman of R-Adag’s Reliance Entertainment Pvt. Ltd, said by telephone from Mumbai. “Nothing at all at the moment.”
Spielberg and Stacey Snider, DreamWorks SKG’s chief executive officer, can leave Paramount 60 days after Geffen resigns at the end of August, the person said.
A new distributor, possibly General Electric Co.’s Universal Pictures, will release films from DreamWorks, the person said.
Under Paramount, DreamWorks SKG produced Transformers, the third highest grossing movie in the US and Canada last year at $319.2 million, and Indiana Jones and the Kingdom of the Crystal Skull, third this year with $314.5 million in domestic ticket sales, according to Box Office Mojo Llc., which tracks industry data.
Movies that Spielberg already is developing at Viacom will remain at Paramount under pre-negotiated terms that compensate the director for each project, the person said.
Katzenberg is chief executive of publicly held DreamWorks Animation SKG Inc., a separate animation studio in Glendale, California, whose distribution agreement with Paramount wouldn’t be affected by a split between Viacom and DreamWorks SKG.
Shares of Viacom, controlled by Sumner Redstone, have declined 35% this year.
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First Published: Fri, Aug 08 2008. 11 46 PM IST