India's Reliance talking with DreamWorks - East Valley Tribune: Get Out

India's Reliance talking with DreamWorks

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Posted: Tuesday, June 24, 2008 2:53 pm | Updated: 9:00 pm, Fri Oct 7, 2011.

MUMBAI, India - India's Reliance Entertainment and other investors are in talks with Hollywood's DreamWorks SKG to raise up to $2 billion to create a movie venture, two people familiar with negotiations said Tuesday.

DreamWorks, the movie studio founded in 1994 by Hollywood moguls Steven Spielberg, David Geffen and Jeffrey Katzenberg, is looking to raise a total of $2 billion from investors - $1 billion in equity and another $1 billion for new movie projects, the two people with knowledge of the talks told The Associated Press. They said they could not be named because negotiations were ongoing.

There are four to five other parties involved in the talks, including Universal Pictures, one of the individuals said. It will be some time before the deal is signed, he said, without elaborating.

Reliance Entertainment - part of one of India's top conglomerates, Reliance ADA Group - plans to invest more than $500 million in equity, that same person said. The Wall Street Journal reported last week that Reliance was considering an investment of about that size in a deal with DreamWorks.

DreamWorks and General Electric Co. subsidiary NBC Universal, which owns Universal Pictures, had no immediate comment when contacted Tuesday by The Associated Press.

The Los Angeles Times reported last week that DreamWorks was in talks with investors to raise about $1 billion to break from Viacom Inc. and Viacom's movie studio, Paramount Pictures, and become an independent studio again.

Viacom bought DreamWorks SKG in 2006 for $1.6 billion, but the relationship has declined despite hits such as "Transformers" and "Dreamgirls." Viacom CEO Philippe Dauman said last year his company was planning for Spielberg's possible departure following reports that the Academy Award-winning director was unhappy at Paramount.

Spielberg has described Universal as his filmmaking home and says as much on a video shown during tram tours of the Universal Studios back lot. Attractions based on "Jaws," "Jurassic Park" and other Spielberg hits pepper the theme park, and his Amblin Entertainment production company still resides on the Universal lot.

The financing deal could allow DreamWorks to smooth frayed ties with Universal.

Meanwhile, India's movie industry - often called Bollywood - has expanded as several foreign studios such as Sony Corp., Viacom and Walt Disney Co. have signed co-production deals with Indian movie houses over the last two years.

A deal with DreamWorks would help realize the global ambitions of the Reliance group's chairman, Anil Ambani, one of the world's richest people. The conglomerate has interests in everything from power generation to financial services. It is currently in negotiations to buy MTN Group, South Africa's largest mobile phone network operator.

"It's a powerful mix: a top Indian business house with one of the world's finest filmmakers," said Neeraj Roy, managing director of Hungama Mobile, a leading digital entertainment company, referring to Spielberg. "It makes eminent sense for Hollywood to collaborate with Bollywood because there is capital available in India."

Reliance Entertainment has 100 films in production and development in India. During the Cannes Film Festival last month, Reliance Big Entertainment announced it would provide about $1 billion to develop and co-produce movies with top Hollywood stars George Clooney, Brad Pitt, Nicholas Cage, Tom Hanks and filmmaker Chris Columbus' 1492 Pictures.

Reliance Big Entertainment, which is part of Reliance Entertainment, is involved in strategy and striking collaborations between segments such as gaming, movies, online, animation and music.

Last month, Reliance Big Entertainment cut a co-financing and development deal with 1492 Pictures, the production company responsible for three of the "Harry Potter" movies.

Reliance agreed to pay the costs of developing movie ideas and has the right of first refusal on co-financing deals with distributors, said Mark Barnathan, president of 1492 Pictures.

"They have been fantastic so far," Barnathan said. "They have put no limit on the kinds of movies they are interested in getting involved with. It affords us a kind of freedom that you don't necessarily have at the studio."

Billionaire financier George Soros bought 3 percent of Reliance Big Entertainment for $100 million in February in a sign of growing interest in Indian entertainment companies.

The potential venture with DreamWorks has stirred interest within the Indian industry, with filmmakers believing the deal could help India learn how Hollywood does business.

"In the initial phase, this would help Reliance work out how Hollywood operates, get a sense of how it works there, and then use that to become a major player abroad," said movie director Feroz Abbas Khan, whose film on Indian peace leader Mahatma Gandhi last year won praise in overseas festivals. "This will broaden the base of Indian cinema."

Siddharth Dasgupta, former head of the entertainment division at the trade group Federation of Indian Chambers of Commerce and Industry, said a DreamWorks investment would be smart for Reliance because big Hollywood names balance the risk of investing overseas in the movie business.

"There is always a risk in the movie business, but when you invest in names like Clooney and Spielberg you are hedging your investment," he said. "The upside could also be huge."

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