Spielberg's company to leave Universal

DreamWorks close to Disney deal

 

By TATIANA SIEGEL

DreamWorks is scrambling to find another distribution partner to replace Universal Pictures, which abruptly severed its ties with DreamWorks just four months after hammering out a much-ballyhooed distribution deal with the company.The studio had been engaged in talks with DreamWorks for the past two weeks to renegotiate the deal, which had been agreed upon in terms but had never been finalized. DreamWorks recently approached Universal to modify the terms of the pact after it became clear that it was having problems raising the money necessary to finance six films a year.Universal was willing to make concessions considering how much the global economic climate has changed since the deal was originally struck in October. But the studio balked at DreamWorks' demands to reduce the distribution fee below 8%. What Universal didn't know is that DreamWorks was also engaged in negotiations with Disney to replace Universal as its studio partner moving forward.Instead, Universal was blindsided and privately called DreamWorks' behavior "despicable and deplorable." Publicly, the studio released a statement that said it "has ended discussions with DreamWorks for a distribution agreement. Over the past several weeks DreamWorks has demanded material changes to previously agreed upon terms. It is clear that DreamWorks' needs and Universal's business interests are no longer in alignment. We wish them luck in their pursuit of funding and distribution of their future endeavors."DreamWorks is now close to inking a deal with Disney, which would help DreamWorks raise mezzanine funding. Disney, which had been an original suitor to land a distribution deal with DreamWorks following DreamWorks' split with Paramount Pictures, would provide DreamWorks with P&A funds, pay cable slots and possible production co-financing for DreamWorks' intended six pictures.

DreamWorks, which declined comment, is hoping to cut a deal with Disney in the next 48 hours. Timing raised eyebrows given that Disney recently severed its ties with Walden Media and the Narnia franchise citing budget concerns.

Tekið af Variety