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Rediff News  All News  » Business » Anil Ambani group, Spielberg ink $825 mn production deal

Anil Ambani group, Spielberg ink $825 mn production deal

July 16, 2009 09:52 IST

Anil Ambani's Reliance ADA Group formalised its association with DreamWorks Studios promoted by Hollywood director Steven Spielberg and his partner Stacey Snider.

As part of the deal finalised on Wednesday, the two players will have a 50 per cent stake in DreamWorks and will make movies with an initial funding of $825 million (around Rs 4,125 crore), which accounts for nearly one-third of India's movie industry turnover.

Talks for this deal began in 2008 after Spielberg's deal with Paramount fell through.

The initial outlay, which will be used to produce films for three years, will come from three sources - $325 million from equity infusion by the partners, $150 million from Disney and the rest through debt from a syndicate of banks.

Under the deal, DreamWorks will make five to six films a year for global audiences, with the first production to begin this year. Spielberg and Snider said the company is already working on films like Tintin and is also talking to Clint Eastwood for a movie.

According to the terms of the deal, Walt Disney will handle the marketing and distribution of the studio's films globally, except for India, where Reliance Big Entertainment will be the distributor. The ADAG group will be represented in the board by Amitabh Jhunjhunwala and Spielberg and Snider will also be part of the board.

Speaking on a conference call from New York, Spielberg said: "We will be working only on live action and general entertainment films for global audience and not art films. Animation films will not be part of this company."

On Reliance ADA Group's part, chairman Anil Ambani said: "We are delighted to partner with such uniquely talented individuals as Steven Spielberg and Stacey Snider. Considering the business situation, this is one of the largest outlays in film production in recent times. Revenues from Indian films is only one per cent of the US market and this will change."

Asked whether DreamWorks will take over the various production deals that the ADA Group had signed with Hollywood biggies like Brad Pitt, Tom Hanks and George Clooney, Ambani said these decisions depend on whether DreamWorks finds any merit in them.

Reliance ADA Group had started talks with Spielberg in early 2008, after it became clear that the maverick director would walk out of his tie-up with Paramount, which was an equity partner in the company promoted by him Dreamworks SKG.

Q and A

In a conference call from New York, Hollywood director Steven Spielberg explains the reasons for going ahead with Reliance ADA Group. He also shares his thoughts on the films his company DreamWorks will make in next three years. Excerpts:

What kind of movies can we expect from DreamWorks now?
We will make movies for the general audience that are commercial entertainers. We are not looking at large-budget movies right away. We will make up to six films per year for the purpose of entertainment. They will be for global audiences in genres like action-adventure, thrillers, family and comedy. 

Have you been to India recently? Will any of the new projects be based on an Indian story but for a global audience?

I came to India in 1977 to shoot for a film. Then I came back in 1978 on a personal visit. I am looking forward to coming to India later this year. I will urge Anil Ambani to introduce me to the writers and directors of the Indian film industry. For our projects, I will not exclude or preclude any story idea either set in India or otherwise. The stories should have the potential for a global audience. 

What projects should we look forward to?

I am working on Tintin currently, along with several other projects. We will be producing the films for sure, but I may not be directing the next project. We are in talks with top Hollywood directors, including Clint Eastwood, who will be directing films for us in the near future.

BS Reporters in New Delhi