Anil Ambani group close to deal with Spielberg's studio
New York, June 18, 2008 (IANS)

The Reliance Anil Dhirubhai Ambani Group is close to clinching a deal with the Steven Spielberg-founded Hollywood studio DreamWorks to invest $500-600 million towards equity, the Wall Street Journal reported. The agreement is expected to result in a new company that will make six-seven movies every year and give Ambani a foothold in Hollywood, which his group is strongly seeking.

The Wall Street Journal reported that the cash from the Indian group would allow Spielberg and his associates to end their existing pact with Paramount Pictures, which is owned by Viacom's Sumner Redstone. "I would not like to comment on this," an official with Reliance's entertainment division told IANS from Mumbai, when asked about the reported talks.

Ambani's Reliance Big Entertainment had announced in Cannes last month it would make a major foray into Hollywood and fund production houses run by actors like Brad Pitt, Tom Hanks, Nicolas Cage, Jim Carrey and George Clooney. This marked the biggest foray of an Indian entity in Hollywood's motion picture industry. Thirty films are likely to emanate from Reliance's co-financing and 10 will go into production, company officials had said.

Rajesh Sawhney, president of Reliance Big Entertainment, is leading the group's Hollywood foray. He was chief operating officer at Times Internet Ltd, part of the Times of India group. The Anil Ambani group, with interests in telecom, financial services, media and entertainment, is expected to get a large stake in the new company once the deal with Spielberg and associates is finalised.

DreamWorks, which made action films like "Blades of Glory" last year and "Dreamgirls" in 2006, would seek another $500 million in debt elsewhere to give its new venture enough operating money to make half a dozen films a year.

The Hollywood company was formed with great fanfare in 1994, but following an uneven run, was sold to Viacom in 2006, along with its storied founders, for $1.6 billion. Since then, Spielberg and David Geffen, who became a billionaire through the music industry, were eager to part ways with Paramount.

Spielberg is likely to be joined in the new venture by current DreamWorks chief executive Stacey Snider, who is the former head of Universal Pictures. "Snider gives Reliance a tested Hollywood manager for its biggest foray into the global movie business," the Journal said.

In place of Paramount, the new company would have to choose a studio to distribute its films. The contenders, according to the Journal, are General Electric's Universal Pictures, where Spielberg began his career, and News Corp.'s Twentieth Century Fox.

Calling DreamWorks team's possible partnership with an Indian group seem like an unlikely meeting of the minds, WSJ commented that it's "actually in line with Hollywood's current landscape, where a dearth of Wall Street financing has opened up the door to foreign investors".