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DreamWorks in talks with investors

The movie studio may seek a deal that leads to a split from Viacom.

June 18, 2008|Claudia Eller and Josh Friedman | Times Staff Writers

DreamWorks SKG, the movie studio founded by Steven Spielberg, David Geffen and Jeffrey Katzenberg that has been chafing under ownership of media giant Viacom Inc., is in talks with a number of potential investors, including one of India's biggest entertainment concerns, to raise financing to become an independent company once again.

But a person familiar with the situation cautioned that talks were fluid and no deal was imminent.

The Wall Street Journal reported online that DreamWorks was close to a deal with India's Reliance ADA Group to invest $500 million to $600 million in the studio.

Reliance has been reaching out to a number of Hollywood entities, including Metro-Goldwyn-Mayer Inc., said the person, who was not authorized to talk and spoke on condition of anonymity.

DreamWorks is looking to raise about $1 billion to secure its independence from Viacom and its movie studio, Paramount Pictures, the person said.

DreamWorks spokesman Chip Sullivan declined to comment.

Viacom bought DreamWorks in 2006 for $1.6 billion, starting a relationship that quickly soured.

Many thought a divorce was inevitable after Viacom Chief Executive Philippe Dauman said at an investor conference last fall that he was prepared for the possibility -- and that the financial effect on the company and Paramount would be "completely immaterial."

Spielberg, Katzenberg and Geffen founded DreamWorks as a private company in 1994. Under its current studio chief, Stacey Snider, the studio has had a series of hits for Paramount, including "Norbit," "Blades of Glory," "Dreamgirls" and "Transformers."

But the founders are said to feel slighted that they haven't gotten more credit for Viacom's success, even though the company tried to patch things up by creating a DreamWorks/Paramount distribution label and praising DreamWorks' box-office results.

Geffen is expected to exercise an exit clause in his contract later this year, a move that would open the door for Spielberg and Snider to follow.


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