DreamWorks breakup could get ugly

Once DreamWorks secures financing, Geffen will look to make a distribution deal with another studio, most likely General Electric Co.'s Universal Pictures, where Spielberg began his career and still maintains offices on the back lot. Spielberg has indicated that Universal -- where he made such hits as "Jaws," "E.T. The Extra-Terrestrial," "Jurassic Park" and "Schindler's List" -- would be his preferred home.

But landing a deal there will depend on the kind of financial terms DreamWorks will be able to extract. Universal Pictures chief Ron Meyer, who is close to Geffen, declined to comment Wednesday.

Geffen has also talked to other studios, including News Corp.'s 20th Century Fox, about distributing DreamWorks' movies. Fox declined to comment. But one person involved in the discussions said Spielberg would have to be "convinced" to go anywhere other than Universal.

As soon as DreamWorks secures financing, Geffen plans to exercise an out clause in his Paramount contract, which in turn will enable Spielberg and Stacey Snider, who has run DreamWorks for the last two years, to depart effective Nov. 1. Snider, the former movie chairwoman at Universal, has also clashed with Grey, whom she said never treated her with the respect she deserved.

Once Geffen finds a new home for DreamWorks, he has told associates that he plans to "retire" and Snider will be made a partner with Spielberg in the reconstituted company. The two have enjoyed a close relationship for many years, going back to when Snider was a young production executive at TriStar Pictures, where Spielberg developed the movie project "The Mask of Zorro."

The impending breakup will come as a relief to both sides given the rancor that has come to define their relationship. Executives at Paramount and Viacom, which bought DreamWorks in December 2005 for $1.6 billion, have tired of Geffen's complaints and have been bracing for the departure of DreamWorks over the last year.

Viacom and Paramount executives declined to comment Wednesday.

Not long after the acquisition, Geffen and Spielberg came down with a bad case of seller's remorse. In their view, Paramount's Grey and his colleagues began grabbing too much credit for the studio's success with such DreamWorks-produced movies as "Dreamgirls," "Blades of Glory" and "Norbit."