Anil Dhirubhai Ambani’s Reliance Big Entertainment and renowned film maker Steven Spielberg are are inching closer to signing a deal. The agreement may be signed as early as next week, Bloomberg quoting sources. The deal would involve Reliance making an investment of $550 million in Spielberg’s studio DreamWorks SKG, allowing the film studio to split from Viacom Inc.’s Paramount. It would also involve Anil Dhirubhai Ambani Group (ADAG) arranging a debt financing of $400 million for DreamWorks SKG. Spielberg is signing the deal with ADAG as he and other co-founders of DreamWorks, Jeffrey Katzenberg and David Geffen, have repeatedly clashed with Paramount Chief Executive Officer Brad Grey since selling the studio to Viacom for $1.6 billion in 2006. The deal with Anil Ambani would allow the trio to leave Viacom as early as November this year.
Earlier this year Reliance Big Entertainment had announced investments in a slew of Hollywood projects in the backdrop of Cannes Film Festival. The company had said it would invest $1 billion over next 18 months in several Hollywood projects which include that of Jim Carrey, George Clooney, Tom Hanks and Brad Pitt. With investment in Spielberg’s DreamWorks, Anil Ambani’s expected investments in Hollywood would reach around $2 billion. Reliance ADAG is looking at Hollywood as the size of the pie is much larger there. It has also bought or leased out more than 200 cinema theatres in America. Reliance Big Entertainment has also attracted investment from the likes of George Soros, invested $100 million for a 3 per cent stake, valuing the company above $3 billion. In May this year the Reliance Big Entertainment was also reportedly talking to Kohlberg Kravis Roberts & Company (KKR), billionaire investor Carl Icahn, Japan’s Softbank and Abu Dhabi Investment Authority for selling 10 per cent equity.
Movies that Spielberg already is developing at Viacom will remain at Paramount under pre-negotiated terms that compensate the director for each project. Some of these projects include Jurassic Park IV, a movie based on comic series Tintin and Transformers, among others. DreamWorks Animation SKG Inc’s distribution agreement with Paramount wouldn’t be affected by a split between Viacom and DreamWorks SKG.
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