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Spielberg gets funding from Reliance Entertainment

Last updated on: April 11, 2012 15:13 IST

Spielberg gets funding from Reliance Entertainment

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Yoshita Singh in New York

Reliance Entertainment, a unit of the Anil Ambani-led ADA Group, is expected to give $ 200 million to Hollywood director Steven Spielberg's DreamWorks Studios, a deal which will extend a new financial lease of life to the struggling California-based film company.

Reliance Entertainment has "agreed in principle" to continue financing the film studio Spielberg founded.

Under the arrangement, DreamWorks would make fewer movies in a year, down to about three from the six it had originally intended, reported the New York Times.

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Image: Director Steven Spielberg
Photographs: Mike Blake/Reuters

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The report said DreamWorks executives and representatives had been seeking since earlier this year to augment an initial round of financing under which Reliance contributed $325 million in equity, while banks led by J P Morgan Securities provided a matching amount in loans.

Amid financial woes, mainly due to poor performance by some of its movies, operations at DreamWorks have slowed down.

The financial assistance by Reliance will help the studio pick up pace in moviemaking, helping it continue to make studio-level pictures.

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Photographs: Peter Morgan/Reuters

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While Reliance has firmly committed to the new funding, J P Morgan and other lenders remain in place and may eventually be asked to extend or revise their own arrangements, the report quoted people briefed on the deal as saying.

Hollywood has been going through a rough patch in the past year or so. Moviegoing hit a 16-year low last year and DVD sales continue to remain unimpressive.

DreamWorks's movies science-fiction film 'I Am Number Four', 'Cowboys & Aliens' flopped. While Academy award nominee 'The Help' was a hit, movies like 'Fright Night', 'Real Steel' and Spielberg's own 'War Horse' either lost money or did not make much.

This year two DreamWorks movies will hit theaters -- drama 'People Like Us' is scheduled for release in June besides 'Lincoln.' So far only one movie sci-fi thriller 'Robopocalypse' is scheduled for release in 2013.

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Image: The Help
Photographs: Courtesy, DreamWorks

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DreamWorks was a successor to DreamWorks SKG, which was founded in 1994 by Hollywood bigwigs Spielberg, former Disney President Jeffrey Katzenberg and media mogul David Geffen.

The trio had intended to make DreamWorks SKG a multimedia giant among Hollywood's established studios. However, the company failed to make a mark and was sold to Paramount Pictures in 2005.

After Spielberg and DreamWorks Studios' Chief Executive Stacey Snider clashed with Paramount executives, they spun out the company in its current form. DreamWorks has about 80 employees.




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